September 8, 2021
CSAT: What It Is, Why It Matters, and How You Can Optimize
These days, there’s one thing that has as big of an impact on your customers as your product and service: that’s their customer experience, especially when dealing with support needs.
But how can you tell whether customers are satisfied with that journey enough to stay engaged with your business and tell you what they think of the provided experience?
What you’re looking to measure is CSAT, or your Customer Satisfaction Score.
By tracking customer satisfaction you’ll be able to figure out how you can improve services for your customers and find gaps in what might be missing.
Did you know that a satisfied customer is more likely to stay a loyal customer? Depending on your industry, the cost of gaining a customer may be 5 to 25 times higher than the cost to retain one.
In this blog we will detail everything you need to know about CSAT, as well as a few ways you can work on optimizing it for your organization and how you can work to keep customers happy and loyal to your organization.
What Is CSAT?
Your CSAT is a fundamental key performance indicator. This customer experience metric is a measurement used to quantify how happy or satisfied your customers are with a service, product, or support interaction you have provided.
There are two ways to think of CSAT: there is the general idea of CSAT and the overall experience that makes for high customer satisfaction. And there is also your CSAT score which ties a direct number to customer satisfaction.
With CSAT, companies are aiming for a percentage; 100% is phenomenal and closer to 0% would be bad. According to the American Customer Satisfaction Index, most industry averages range from the mid 60s to mid 70s while those performing poorly will range below 40.
But your CSAT score is only part of the equation. There are many other metrics and KPIs that you’ll want to consider tracking along with your CSAT score such as Net Promoter Score (NPS), First Contact Resolution (FCR), Customer Effort Score (CES), and others, which we’ll discuss later on.
Why Is CSAT Important?
Working to measure and improve your customers’ satisfaction shows dedication to your customers and organization.
CSAT can tell you many things, so we sat down and asked Forethought’s own Head of Customer Experience, Rose Wang, to tell us why CSAT is important.
Customer satisfaction is a signal to the health of your business because it measures the individual data points of how your customers are feeling at a moment in time. CSAT taken in aggregate and measured over time is loosely correlated with customer retention. That said, the metric only captures 10-12% happiest and unhappiest customers, since CSAT scores carry survey bias.
Because customers no longer base their loyalty on price or product, you now have to work to improve their customer experience and keep them coming back. Just one bad experience with your organization sends 50% of customers to a competitor. Without a seamless process they can follow, you’ll lose customers to those who can offer them one.
And that’s just the effect on your customers. You also need to consider the impact on your support center; with unsatisfied customers, agents may feel helpless in aiding them and you’ll lose them. After all, the average turnover rate in the support industry is 30-45%.
But you should keep in mind Rose’s last statement, “the metric only captures 10-12% happiest and unhappiest customers,” meaning there’s more to great CSAT than just this survey.
How Is CSAT Score Measured?
We mentioned that there are two ways to think of CSAT. First, let’s talk about calculating your CSAT score.
You’ve likely engaged in a CSAT survey in the past. Typically, these types of surveys ask close-ended questions with predetermined responses, such as the following:
Question: How satisfied are you with X Company?
Answer: On a scale of of 1-5
Question: Did we help you with your issue?
Answer: Yes or No
Question: How happy are you with your experience today?
Answer: On a scale of of 1-10
Question: Did our service meet your goals?
Answer: Yes or No
Question: How satisfied are you with your resolution?
Answer: Dissatisfied, satisfied, extremely satisfied
Since your CSAT survey will offer these preset answers, it’s easy to track and measure a score for how happy or unhappy your customers may be feeling after any given interaction.
CSAT surveys measure customer satisfaction and are usually sent immediately after a customer interaction such as specific customer journey touchpoints, after in-person interactions, or after support interactions.
CSAT scores give you a number out of 100 that tells you how happy or unhappy your customers are with the service you have provided. To calculate your CSAT score, take the number of satisfied customers (defined ratings of 4 or 5), and divide by the total number of responses.
For example, if 80 of your 100 responses have a rating of 4 or 5 or a Yes to being satisfied, your CSAT score would be 80%.
This is what your equation should look like when measuring scores for CSAT surveys that offer simple satisfaction scales:
And that’ll tell you what percentage of customers are happy with the interaction you have provided for them.
But a CSAT score isn’t always enough to tell you about the health of your customers. If that’s the case you might be wondering…
What Else Goes Into CSAT?
If a CSAT score closer to 100 tells you that your customers are loving you, then that must be enough information.
What people get wrong is thinking that their CSAT score is the only important metric that tells you about the health of your customers when in reality, good overall customer satisfaction (not just your score) takes into account many other factors and metrics.
CSAT scores are great because they’re the result of just one question that people answer and because CSAT benchmarks are readily available online for you to take a look at how you measure up within your industry.
CSAT scores being easily asked could also be seen as a negative.
The reality of the CSAT survey (or any customer metric survey) is that it doesn't get responses from everyone, meaning your results could be skewed.
Studies show that those who respond to customer surveys either had very bad experiences and want to be vocal about it or had very positive feedback to give.
It’s sometimes hard to get feedback from those who land in the middle. And since these results can heavily lean one way, there’s more you want to take into account to truly see the health of all of your customers.
Overall Customer Experience
Customer experience is the journey and experience you put your customers through every time they interact with your organization. You want to offer a seamless experience from the first time a customer finds you to when they make a purchase and through any support interactions they may require.
In relation to customer satisfaction, you need to remember that CSAT scores tell you about a customers’ happiness with an interaction at a specific point in time, such as a sales or support interaction. Customer experience is important to that score because those experiences are what allows for you to send out CSAT surveys.
Improving customer experience and customer satisfaction requires an ongoing and deliberate effort in order to figure out what keeps customers loyal to your service or product.
You should be constantly analyzing your customer metrics in order to have a solid footing for understanding what is delighting your customers one day and what is no longer doing it for them the next.
We’ll cover a little more about what you can do to improve your CX and CSAT further below.
More Customer Metrics
Keeping your customers satisfied means analyzing and figuring out where or what they’re struggling with regarding the product or service you offer them. You’re likely already tracking a myriad of customer metrics but we want to hit on a few that when combined with measuring CSAT scores can paint a better picture of the health of your customers.
Net Promoter Score (NPS)
Your Net Promoter Score is a customer loyalty and satisfaction metric that you can find by asking customers how likely they are to recommend you, your product, or service to others based on their interactions.
If customers are satisfied with your services or product they’re more likely to share that information with you in a CSAT survey.
Customer Effort Score (CES)
Did you know that customer loyalty is directly related to the amount of effort customers need to put in when interacting with your organization?
CES measures how easy it is for your customers to interact with your company and helps you figure out where you can make things better. Whether it’s effort in trying to communicate with you for support or the effort required to obtain your product or service, the amount needed to put in affects how often someone wants to come back to you.
Customer Retention Rate (CRR)
One other key performance indicator that you should measure in conjunction with CSAT scores is your Customer Retention Rate.
CRR tells you the rate at which you’re retaining customers. This metric is unique because by itself it only tells you a number, not why you are obtaining that number. So when combined with CSAT, NPS, and CES, you’ll be able to make educated guesses as to what affects it.
Now that we’ve gone over what CSAT is, why it matters, and what else you should be measuring alongside it, let’s discuss how you can work to optimize your organization’s CSAT. And you may have guessed, but it all goes back to your customer experience.
5 Ways To Optimize CSAT
Working to optimize your customer’s satisfaction means implementing change at every step of their journey and improving their overall experience as well as the experience for those who are interacting with your customers.
According to the Temkin Group, companies that invest in customer experience can expect to double revenue within 36 months. It pays to improve things for everyone. Plus, a Walker study found that by the end of this year CX will overtake the importance of price and value of produce or service.
If you’re looking to improve CSAT and CX, here are a few ways you can work towards this.
Put Customers At The Center
Think of your last negative customer experience. (We hope it wasn’t too recent.)
What made it negative?
Was it a lack of empathy from the person you interacted with? An inability to self-serve to resolve whatever issue you had? Or maybe there was just no seamlessness to whatever you were trying to do.
Customers tend to have negative customer experiences because they feel like they are not at the center of the interaction. You can improve your CX and ultimately CSAT score by making customers feel like they are important.
Training employees and customer support agents to interact with agents in a customer-focused manner may mean implementing new training programs or using a customer support tool that can interact with customers with the same sentiment your agents would.
Work On Your Employee Experience
Many organizations miss out on simple ways to improve their CX when they ignore their employees and how they may be feeling.
It makes sense that employees who are happier at work will interact better with your customers. Working to enhance your employee’s experience can have an impact on employee engagement and your bottom line. Did you know that companies who invest in EX are four times as profitable as those that don’t?
Putting employees first means constantly asking questions like, “Do my employees have the tools and resources necessary to succeed?” and “Are my employees empowered to do their jobs well?”
One of the biggest assets for your team can be having the right tools in place that can help them serve customers better. Using tools that can assist in bringing up the most accurate information for a support answer can greatly reduce employee stress and help them succeed.
Your employees are the lifeblood of your organization and can influence your customers greatly.
Engage With Other Metrics
What all CX metrics is your organization tracking?
You can work on improving your CSAT scores by analyzing them in conjunction with other customer metrics. These days, the metrics that matter most to those building great experiences that lead to great customer satisfaction include Customer Effort Score (CES), First Contact Resolution (FCR), and Net Promoter Score (NPS).
These key performance indicators are important when analyzing customer interactions because when looked at in conjunction with each other can help paint a better picture of the health of your customers’ sentiment towards your organization.
Build Better Processes
Is customer interaction within your organization seamless?
Are customers able to get a demo, make a purchase, ask for support, find their own answers, or interact with your company in easy ways that make for happy customers?
Think about the last time you tried contacting support for a big online retailer. Did you start by Googling, “Amazon contact support?” I know most searches usually begin that way. By the time you actually find where you need to go, you’re already frustrated that no matter how helpful of support you get, you’ll more than likely leave a poor CSAT review.
If you answered no to having a seamless process within your own org, then you need to build better processes for your customers so they don’t experience what you did.
This also goes back to giving your employees the proper tools to do their jobs. Without the tools to provide simple-to-follow processes in place, both your employees and customers will be frustrated and ultimately customer satisfaction will suffer.
Making things easier for customers might mean automating certain interactions or creating new ways for customers to get the help they need.
Leveraging Technology to Improve CSAT
You might not be aware but the future of your business’s customer interactions is rooted in AI.
Artificial intelligence is no longer a daunting buzzword but a reality for many. These days, AI is available for sales and support interactions and can actually enable you to increase customer satisfaction by making those support interactions better for customers.
AI Improves Self-service
AI can help increase CSAT by improving the way customers go about finding the support they need from your organization. AI helps improve your self-service offering making it so customers don’t need to interact with a human to find the information they are seeking. They can simply ask a question via web widget and have the best answer automatically served to them. This can in turn help reduce First Contact Resolution times since AI provides faster answers than humans can.
AI Relieves Customer Frustration
Another issue AI can help solve within customer support is the frustration that customers are put through when they are routed to the wrong person, sent the wrong information, are made to wait for their answers, or can’t find what they are looking for.
AI can make it so customer queries are seamlessly triaged and sent to the right person the first time and don’t get lost and forgotten about. Your customers expect speed and accuracy when seeking support and AI can make the process better for everyone involved.
CX & CSAT Go Hand In Hand
It’s not just about your CSAT score. Your score doesn’t tell you everything you want to know and you’ll need to dig deeper if you’re looking for gaps between why customers aren’t satisfied with what you need to do to fix it.
What we do know for sure is that customer satisfaction takes into account the whole picture of what you’re doing to provide customers with the positive experiences they’re looking for.
If you want to improve customer metrics then you’ll need to improve your customer experience.
At Forethought, we can help you do just that! Our customers love our dedication to their organizations and with our expertise we can help change the way you’re doing business within your support center.
With the use of the right tools, you can start to make waves towards improving your CX and your CSAT.
If you’re interested in learning more, check out what we’ve done so far for our customers here. We’re also available to chat in case you have any questions.