There is more than one KPI to measure customer satisfaction and, yet, its importance is undeniable: only a satisfied customer returns again, and it’s only a satisfied customer who is willing to promote your company.
Measuring customer satisfaction is very important for any company operating in the market.
The consumer has become more demanding and is no longer content to buy a product that “just” has excellent technical features. On the contrary, what every customer is looking for is a memorable shopping experience that goes beyond the simple choice of a product to buy. Not surprisingly, all companies are beginning to invest resources, time, and attention to develop their customer experience in an appropriate way.
But, if investing in the customer shopping experience is a good move, practically obligatory, one can wonder how to be sure that such an experience is adequate for ensuring a high degree of customer satisfaction.
The answer is both simple and complex: you need to use objective statistical methods that allow you to understand the level of customer satisfaction, and what, if anything, annoys and frustrates him.
Since many of these considerations are qualitative and therefore difficult to represent in an objective way, the determination of customer satisfaction raises some critical issues. Also for this reason, as we will see, there are different what is the context or what is the most relevant for the company.
However, before we go any further, let’s make a premise.
Customer satisfaction: a definition
Let’s start by defining customer satisfaction.
Customer satisfaction is “Customer satisfaction (CSAT) is a metric used to quantify the degree to which a customer is happy with a product, service, or experience”.
From the definition, we can also see a link with the customer experience, which is the “tool” with which this satisfaction can be obtained. On the other hand, it is not only in the object but also in the purchasing experience that the customer sees his expectations and needs satisfied.
Among other things, this type of experience is by no means limited to physical aspects (the appearance of the stores, their accessibility, their cleanliness, or how long a customer must wait at checkout). On the contrary, the customer experience now extends to other “dimensions”, and that includes digital.
All of this, of course, is thanks to the digital transformation that has allowed companies to amplify the experience offered to consumers by going outside the physical store.
This means that a satisfied customer is not only the one who finds the store clean or who doesn’t have to wait long at the checkout, it’s also the one who lives an omnichannel shopping experience through his cell phone, who easily navigates the e-commerce website, or who can contact customer service and receive an answer at any time.
So, there are many things that contribute to customer satisfaction.
How to evaluate customer satisfaction?
First, you must distinguish the object of evaluation by the customer.
Customer satisfaction can be tied to the relationship with the enterprise or it can be around the expectations that a customer has towards the object purchased or the service they experienced. Obviously, the two aspects are not alternative; on the contrary, they are related. The better the customer’s relationship with the brand, the more likely it is for the customer to be satisfied with the product/service obtained.
Secondly, it is necessary to identify the most appropriate target audience to assess customer satisfaction. In this sense, the sample chosen must be as representative as possible, i.e. it must be able to express the entire community since it contains all the characteristics of the entire customer base, albeit in a proportional manner.
This means that the choice of the sample is particularly delicate, since you must make sure not to exclude anyone from the target population. This is why it can be particularly useful to take into account some characteristics in order to correctly sample the customer base, such as socio-demographic characteristics (age group, profession, gender, nationality), geographical-territorial characteristics (origin, family context) and temporal ones.
To these we must also add the merchandise variable: it does not make sense to evaluate customer satisfaction if we exclude the buyers of a certain type of product or service.
Another fundamental condition to analyze is optimal timing.
In order to verify the level of satisfaction, you need to know how a customer feels immediately after the moment of purchase so that the impression is clear and long lasting. This also depends on the quality of the answers obtained: for example, if the submission of a questionnaire occurs much later, you risk receiving inaccurate and unclear feedback, which are not useful.
How to evaluate customer satisfaction
To evaluate customer satisfaction, you need to choose a methodology (also because there is not a single or universally shared criteria for measuring customer satisfaction).
One of the most common is the so-called ServQual method, which is the abbreviation of Service Quality.
This method is based on the evaluation of the delta between customer expectations and perceptions. In particular, according to this method, customer satisfaction is understood as the “function of the discrepancies between the performance or characteristics expected for the ideal product and those perceived in the real product”.
Usually, this type of method is used to carry out market research aimed at monitoring the quality of a service or of a set of services provided by the company.
The main instrument of perceived quality is a questionnaire submitted at regular intervals to the customers in order to obtain an evaluation of the services provided.
An alternative to ServQual: the Kano model
Another method of detecting customer satisfaction is the Kano model, which originated in the 1980s and is based on the identification of five attributes that a customer expects from a product or service and on which his own satisfaction depends (source: infonotizia.it).
The first category of attributes is “Must be Quality”, which includes all the requirements that customers naturally expect, which are intrinsic to the product or service purchased (for example, the fact that by purchasing a plane ticket I am entitled to a seat on the plane).
Lacking these requirements, the customer is naturally disappointed and dissatisfied, while if these requirements are present, the customer will simply be neutral since they represent a sort of “base level” of the expected performance.
The second category is the “One-dimensional Quality”, which includes the set of attributes and qualities, that, if present in a positive way, generate a high level of satisfaction in the customer; however, if they are present in a negative way, they can inspire strong feelings of frustration. An example is the promise of a certain surprise: if it meets the expectations and the description given to the customer, the same will be satisfied, otherwise not.
The third category of attributes is the “Attractive Quality”, which indicates all those requirements that generate satisfaction in the consumer only when they are fully achieved.
The interesting thing about these attributes is that they have a purely reinforcing character, i.e. they greatly increase consumer satisfaction, but their absence does not necessarily have a negative impact.
The easiest example to understand is that of the restaurant: if an amuse bouche is offered at the beginning or liquor is offered at the end, the customer will feel more pampered, but if they are missing this, it would not necessarily have a negative impact on the perceived quality of the dinner.
The fourth category is “Indifferent Quality” and is used to indicate all those characteristics that have no impact on customer satisfaction, either positively or negatively. This, however, does not make them irrelevant: on the contrary, detecting them serves to make your business more efficient by filing and making the customer experience offered less expensive.
Finally, the Kano model also includes “Reverse Quality”, which is the category of attributes that, if implemented, risk satisfying some customers and frustrating others, since they “guard” conflicting expectations.
An alternative: the Net Promoter Score
Another KPI to measure customer satisfaction is the Net Promoter Score. It indicates how much the consumer would feel willing to recommend a product or experience to a friend or acquaintance.
Although this index is usually combined with the evaluation of the customer experience, on closer inspection it can be useful “by reflection”. The more satisfied a customer is with the shopping experience or the product they have purchased, the more likely they are to play an active role in promoting it – this is the famous “word of mouth.”
Incidentally, when this happens, it means that a special bond has been established between customer and brand, since the customer has stopped being a customer but has become a real brand ambassador who not only appreciates the products, but even adheres to the values of the brand, passing them on to others as if they were his own.
Retention rhymes with customer satisfaction
Another useful KPI to measure customer satisfaction is the customer retention rate (CCR), which indicates a company’s ability to keep the customers it has already acquired (source: glossariomarketing.it). It is calculated by dividing the difference between the number of customers at the end of a given period and the number of customers at the beginning of the period.
The measurement of CCR is fundamental and must be done constantly over time, because it allows you to understand if your business meets customer expectations and, if not, if you need to intervene.
Among other things, having a high level of customer retention is not only synonymous with a high level of customer satisfaction, but it also allows you to have a highly competitive and financially sustainable business, since it is much more expensive to buy a new customer than to keep an existing one.
Add to this the fact that a loyal customer tends to spend much more and much more often than a new customer: this makes it clear how important consumer satisfaction is in terms of customer loyalty.
The way you evaluate is also important
At the end, it is worthwhile to spend a few words on how to evaluate customer satisfaction.
The most widely used is the questionnaire, which can be submitted by the customer on site, sent by email, or conducted by phone. Also in this case, you need to know how to choose the right one and build it so that the consumer can fill it out quickly.
At the same time, however, it must be designed to gather exactly the information you need, as clearly and precisely as possible. Also because any improvement activities will be based on all the information you have obtained.
This is why it is good to include at least two sections of questions, one relating to importance and one relating to satisfaction. The first will be used to understand the priorities and expectations of the customers, which will help provide an indication for the future. Instead, the second will be used to verify the experience and indicate the main aspects for improvement next time.
Measuring customer satisfaction with the right tools offers many benefits to businesses, which will also be reflected in the quality of the product/service offered. The strategy is understanding how to provide value to the customer, to get to know the customer, and finally, to gain his trust. In today’s competitive climate, we must keep in mind that our customers have many options to choose from. The starting point is to have a measurement of the level of customer satisfaction, which is the real key to reaching your business objectives.