Happy Customers? 3 Key Customer Satisfaction Metrics to Measure

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Business is mainly about keeping your customers happy. Mastering this feat is only possible if you’re measuring your efforts and changing for the better.

These three customer satisfaction metrics are worth keeping an eye on:

  1. Customer Churn Rate
  2. Customer Satisfaction
  3. Customer Effort Score

We’re going to expose just why your business should pay attention to them, and how.

Customer Churn Rate (CCR)

Customer Churn Rate

Nothing reflects customer loyalty (and satisfaction) as accurately as how quickly they’d take off for your competition. CCR brings the number of unhappy customers into focus.

Measuring CCR

You already have all the data needed to calculate CCR – which means you could do this as you read along.

Gather the following variables:

  • Total number of customers at the start of the period you’re measuring (the starting point is up to you) …[S]
  • Total number of customers you had at the end of the period …[E]
  • Total number of new customers …[N]
  • Total customers who left in the period …[L]

CCR = [(L)/(S+N)]*100

The goal is keeping CCR a single digit. Most industries consider 8% the normal churn rate. You’ll have customers going out at some point, right?

The upsides of CCR

  • You can connect it to your business’ revenue
  • It’s a wake up call to how customers actually feel about your business
  • The CCR equation is a standard: You can benchmark results

The downsides of CCR

  • Blind attempts to reduce churn can be costly
  • It says nothing about the value of customers who leave
  • CCR is especially tough for companies with short customer life cycles to track

When a customer leaves, chances are high they’re signing up with your competitor. This reality makes it very important to keep a leash on your CCR. All of this matters if you’re planning to create a customer retention strategy in the long run.

Customer Satisfaction (CSat)

Customer Satisfaction

CSat is one of the first customer satisfaction metrics that comes to mind when talking about happy customers. It tells you how pleased everyone is about your products and services.

Measuring CSat

You’ll need customer feedback to test for CSat satisfactorily. You start off by sending out a scale for customers to rate and respond with.

Common scales for this are 1-3, or 1-5.

When you get responses, divide the positive feedback by the sum of replies, and multiply by 100 (for a %). The result is your percentage of customers we can safely consider as satisfied by your business.

Define positive feedback!

Filtering out sour feedback is easy – you can’t mistake the meaning of a frowning face. The low figures of your scale are frowns, basically.

If you send out a 1-3 scale, 3 is the only true positive response. Then 4 and 5 can be smiley faces on the 1-5 scale. It helps to set a key for the customer to pick out the number that reflects their feelings accurately.

The upsides of CSat

  • Customers find CSat surveys friendly and easy to understand
  • Expect a high response rate from the simple tests
  • Provides a direct area of improvement when you specify particular areas of your business

The downsides of CSat

  • Different scales make it impossible to standardize CSat
  • Generalizes the idea of being happy or displeased with services
  • Often leaves no space for customers to explain their feedback

Despite being a neat metric, it doesn’t give you the detailed picture of how customers feel.

Since you can’t compare different companies owing to the scale differences, focus on using the same scale throughout your business for consistency.

Customer Effort Score (CES)

Customer Effort Score

CES is another useful customer satisfaction metric as it tells you how hard you’re making customers work to get the services they need. You can decide to change right away and get quick results.

Patrons shouldn’t have to put in too much effort when trying to make a purchase or file a complaint.

Measuring CES

How ironic would it be if this process was hard? Simply ask customers how hard they felt a particular exercise was… that’s it.

The easiest way is to give customers three options: Easy, Neither, Difficult.

CES = % of ‘easy’ minus % difficult

A negative result confirms that fewer customers think you’re easy to deal with.

The upsides of CES

  • CES has a potent influence on CSat
  • CES establishes an obvious aim – effort reduction
  • Can measure effort for any specific business process

The downsides of CES

  • This metric doesn’t reflect other key factors like price and product affect them
  • ‘Hard’ is relative
  • Easy can still be unpleasant, while Difficult can yield satisfaction

CES helps create perfect experiences in an inbound call center.

The Importance of Managing Customer Satisfaction Metrics

Managing Customer Satisfaction

Managing these three customer satisfaction metrics improves a business’s chances of gaining competitive advantage. For this reason, routinely collecting data and running calculations is key.

About babelforce

babelforce is a global cloud communications platform focused on No-Code integration and automation. It allows non-technical people to build even the most complex integrated processes for customer-facing teams, particularly in the call center.

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