Article • 20 min read
What is customer satisfaction? Definition + importance
Customer satisfaction measures how happy your customers are with your products or services. For many businesses, it's the key to success—and the reason some fail.
By Alaina Franklin, Director, Customer Success
Last updated July 23, 2024
What is customer satisfaction?
Customer satisfaction (CSAT) is a measure of how well a company’s products, services, or overall experience meets customer expectations. Businesses often measure customer satisfaction with surveys, feedback analytics, and other tools. High customer satisfaction typically leads to customer loyalty, repeat business, and positive word-of-mouth, while low satisfaction can result in complaints, negative reviews, and loss of business.
If you asked a group of business leaders to define customer satisfaction, you’d likely get different answers. However, one thing is clear: High customer satisfaction means happy customers, leading to increased retention and a better bottom line.
In fact, our Zendesk Customer Experience Trends Report 2024 uncovered an eye-opening statistic: 57 percent of customers would switch to a competitor after just one bad experience—a figure that has risen by 5 percentage points year over year. With the risk of customer churn so high, it’s crucial for every business—from the mom-and-pop bakery down the street to a behemoth like Amazon—to meet customer expectations and achieve high customer satisfaction.
Discover what customer satisfaction is, why it’s vital for businesses of all sizes, and actionable strategies for improving it to drive long-term success.
More in this guide:
- What does it take to achieve customer satisfaction?
- The importance of customer satisfaction
- How to measure customer satisfaction
- How to improve customer satisfaction
- Customer satisfaction examples
- Frequently asked questions
- Boost customer satisfaction with Zendesk
What does it take to achieve customer satisfaction?
Customer satisfaction is the difference between customer needs and expectations. If you meet or exceed expectations, your customers will be satisfied. If not, they will be dissatisfied. This sounds simple enough, but it requires a company-wide commitment to putting the customer first and relentlessly focusing on delivering a fantastic end-to-end customer experience (CX).
From the quality of your products or services to the speed and helpfulness of your support team to the ease of your sales process—you must optimize every touchpoint to deliver a positive, frictionless experience. Anything less, and you risk unsatisfied customers seeking greener pastures with your competitors.
However, many companies struggle to meet rising customer expectations. Common gaps between customers’ expectations and the service they receive include:
Lack of communication channel options
Slow resolution times
Difficulty interacting with businesses
To achieve high customer satisfaction, you have to close these gaps. Understand what your specific customers expect, then align your people, processes, and technology to consistently meet and exceed those expectations.
The importance of customer satisfaction
Customer satisfaction is important because it offers insight into if your CX is resonating with your customer base.
Even low customer satisfaction scores can be an opportunity for your business. They can reveal customer pain points and provide data-backed insights on improving your product, service, and overall customer experience.
When you take a data-centric approach to customer satisfaction, you can:
Save an unhappy customer from leaving your brand for a competitor.
Discover customer pain points and learn how to improve your product, service, or overall customer experience.
Drive repeat purchases by ensuring customer happiness.
Monitor and improve brand reputation by discovering how likely customers are to recommend your company to a friend.
- Build customer trust by showing customers that their feedback matters.
By leveraging insights from customer satisfaction data, you can unlock a range of benefits that extend far beyond addressing individual customer concerns. Let’s explore some of the key advantages.
Drives customer loyalty
It’s a universally acknowledged truth: an unhappy customer is more likely to tell others about their negative experience than a happy customer is to share a positive one.
And considering 70 percent of people in the United States use social media, sharing is easier than ever before. If a customer has a bad experience with your company, they can broadcast it to millions of people before they’re even out the door.
Prioritizing customer satisfaction and making changes based on negative feedback can help your business get better reviews, improve customer loyalty, and, in turn, attract more customers.
Example: A customer makes an X (formerly Twitter) thread about their poor experience with your company, leading their followers to also distrust your brand. To help save the interaction, respond to the customer as quickly as possible. Apologize for the error and ask them to send you a message so you can get more information and remedy the situation.
Helps improve agent performance
Customer satisfaction highlights areas where your support team may need additional training, allowing you to develop their skills effectively. It can also help you identify inefficiencies that may be impacting agent performance.
The following metrics can be useful in understanding customer service satisfaction levels:
- Initial response time: Few things are more frustrating than long wait times. This metric can help you identify pain points in your team’s ability to respond promptly.
- Resolution time: If it’s taking your support agents hours to resolve issues that could be dealt with swiftly, it might be time to tweak your internal processes. Don’t just strive to respond quickly—resolve quickly, too.
- Number of transfers: In our CX Trends Report, 60 percent of consumers report being frequently transferred to another agent or department during phone calls. If transfer occurrence drops, client satisfaction should rise.
Your team’s efficiency in those three areas directly impacts customer satisfaction.
Example: If your negative reviews mainly revolve around response time, you may want to consider training employees on how to deliver quicker support—or consider leveraging an AI agent to offer 24/7 service.
Provides valuable feedback
Beyond just reflecting your support team’s efforts, customer satisfaction data provides valuable feedback that can inform virtually every aspect of your business. By analyzing trends in customer feedback, you can uncover pain points, identify new opportunities, and make more informed decisions across the entire CX.
Even negative feedback, while never pleasant to receive, is crucial in improving the customer experience. Those disgruntled customers are letting you know where you’ve fallen short, giving you a chance to address their concerns and turn them into loyal advocates. Pay close attention to the common issues they raise, as these are likely areas that need your immediate attention.
Example: If you see a pattern of customer complaints about long wait times or unhelpful responses, you know exactly where to focus your training and improvement efforts. Unsolicited customer feedback is often your best source of ideas for improvement.
Increases customer lifetime value
Highly satisfied customers buy more, stay longer, and tell their friends. Consistently delighted customers tend to make more frequent purchases, are less price-sensitive, and become brand evangelists who organically attract new business through word-of-mouth recommendations and positive reviews.
Ultimately, the lifetime value of retained, satisfied customers significantly outweighs the high cost of acquiring new ones.
Example: Even if a coffee shop around the corner is more convenient, customers will be more likely to walk to (and spend money at) a shop that gives them better, more personalized customer service.
Boosts customer acquisition
Great customer service isn’t just important for supporting existing customers—it’s key to attracting new ones, too. Nowadays, consumers expect premium service to be built-in throughout the customer journey—from the first sales or marketing interaction to any support they need down the road.
To position themselves for success, businesses must integrate high-quality customer service into every interaction point.
Example: If a customer receives top-notch support whenever they need help, they’re likely to recommend your brand to friends and family.
How to measure customer satisfaction
The first step in improving customer satisfaction is understanding where you currently stand. And that means implementing the right customer experience strategy.
One of the most widely used metrics is the customer satisfaction score (CSAT). Use the formula below to calculate it:
CSAT = (number of satisfied customers ÷ total number of responses) x 100
A common way to collect this score is through simple post-interaction CSAT surveys. A classic question is, “How satisfied are you with X product?” with answers ranging from “very satisfied” to “very unsatisfied.”
Essentially, the higher the ratio of satisfied customers, the better. To see an example of how this works, try out our customer satisfaction calculator below.
CSAT calculator
CSAT score: 0%
Customers surveyed: 0
It’s important to note that CSAT is a specific, immediate measure of satisfaction related to a particular interaction or transaction. For instance, you might send a CSAT survey after a customer makes a purchase or interacts with your support team. This approach helps you identify specific areas that need improvement and allows you to take prompt action to address any issues.
Additionally, while CSAT surveys are a great starting point, it’s also worth considering other customer experience metrics like Net Promoter Score (NPS) and Customer Effort Score (CES). These give you a more holistic view of customer happiness and the ease of interacting with your company.
Try our CSAT survey templates
Download our free CSAT survey templates to see if you're meeting customer expectations.
How to improve customer satisfaction
Customer satisfaction isn’t a responsibility that falls on any single department to achieve on behalf of the entire organization, though the CX team plays a pivotal role. Here are a few simple yet effective ways CX teams can improve customer satisfaction scores.
1. Leverage AI
When implemented effectively, artificial intelligence (AI) can enhance the customer experience and drive satisfaction.
For example, AI-powered bots can deliver fast and personalized support 24/7. And according to our CX Trends Report, 43 percent of CX leaders believe that these kinds of instant, personalized experiences will increase customer satisfaction and loyalty. In fact, Zendesk AI agents are pre-trained on billions of real customer interactions, so they automatically understand what customers want. They also connect to your backend systems to personalize replies based on customer data.
Tip: Consider implementing a hybrid approach, combining AI agents for initial inquiries with seamless escalation to human agents for more complex issues, ensuring both efficiency and personalized support.
2. Become obsessed with customer feedback
Become a student of your customer feedback. Don’t just collect it—analyze it and apply it to improve your CX. Commit to learning about buyers’ pain points, and then make a plan to alleviate them in ways that set you apart from competitors.
Tip: Use customer feedback software. This tool includes feedback analytics so you can track trends and quickly identify actionable opportunities.
3. Meet customers where they are
If you need Advil in the middle of the night, you’ll be relieved by the glowing neon sign of a 24-hour drugstore. That’s why customers enjoy places with flexible hours and at-will availability.
To build the same sense of convenience as a brick-and-mortar store online, you must have a digital presence on the platforms your customers already use. Make it easy for buyers to reach out and ask support questions on their channels of choice.
Tip: Offering support via messaging apps (like WhatsApp and Messenger) enables helps businesses to support customers over the same channels they use to interact with friends and family, creating a more convenient CX.
4. Deliver fast responses
In a constantly connected world, customers don’t want to have to wait a day—or even more than a few hours—for a response. However, our CX Trends Report found that nearly two-thirds of CX leaders admit they are struggling to deliver more instant experiences than consumers expect.
Here are some ways AI tools can help you deliver faster responses:
AI agents can intercept would-be tickets when agents are off the clock.
Intelligent routing ensures customer requests are directed to the right agent or department right away.
AI can assist agents by surfacing similar tickets, summarizing customer requests, and suggesting macros (pre-written responses).
Tip: Communication is key. If a customer sends a request when your team isn’t available, they should get an auto-reply saying an agent received their message. Providing an approximate response time is also beneficial so the customer isn’t left wondering when someone might get back to them.
5. Make customer satisfaction a company-wide focus
To improve overall customer satisfaction that goes beyond the customer service organization, you must develop a customer-centric business strategy. Incorporate customer satisfaction into your company mission and value proposition, keeping it top-of-mind for every employee, regardless of their role.
Tip: Regularly share customer feedback and success stories across departments to inspire and motivate employees. Additionally, create cross-functional teams to tackle customer satisfaction initiatives, fostering a shared sense of responsibility for delivering exceptional experiences.
6. Invest in agent training
Supporting customers begins with supporting your team. Customer service agents are the heart of any service team, and investing in their professional development and well-being is key to boosting customer satisfaction scores.
Many agents feel they need more training. According to our CX Trends Report, 65 percent believe additional training would improve their performance. Providing ongoing education in areas like new product features, advanced troubleshooting, customer service techniques, and leveraging emerging technologies like AI enables agents to handle issues efficiently. This leads to faster resolutions, fewer escalations, and higher customer satisfaction.
Tip: Build a mentorship program for new employees, so they can learn from the best. Reevaluate your customer service training, too, to see what you can improve or add.
7. Enable customers to help themselves
Consumers today have adopted a “Google-it” mantra. For basic queries, they prefer to find answers themselves online rather than contact a support agent.
That’s why investing in comprehensive self-service options, like an AI-powered knowledge base, community forum, or customer self-service portal, is essential. Empowering customers to find solutions independently can dramatically improve response times, reduce support costs, and enhance overall satisfaction.
Of course, self-service shouldn’t completely replace human interaction. The key is seamlessly blending automated and live support, using AI to handle routine inquiries while reserving your agents for more complex or sensitive issues. This omnichannel approach ensures customers get the right level of support, no matter how they choose to engage.
Tip: You can use an AI-powered chatbot or AI agent to point customers to help center or knowledge base articles. Customers are increasingly willing to turn to chatbots for simple problems. More tickets that bots solve means more time for agents to focus on complex problems.
8. Lead with empathy
Empathy is an essential skill for support professionals—it’s even more valuable than customer service experience. Support leaders can provide empathy training, but hiring support reps who already possess this soft skill is also a good idea.
Tip: Businesses might also consider allowing agents to make exceptions to certain policies in situations that require customer empathy.
9. Personalize the customer experience
Personalization is a powerful tool for boosting customer satisfaction. When you offer individualized recommendations, content, and interactions, you demonstrate that you truly understand your customers and are committed to meeting their unique requirements. This makes them feel valued, building trust and loyalty in the process.
Give agents access to valuable customer information that they can use to improve experiences. With important customer context—such as the previous issue the customer reached out about, how long they’ve been a customer, and what products they’ve purchased—agents can anticipate customer needs and deliver more tailored support.
AI can take personalization to the next level. By leveraging customer data, a generative AI agent can perform sentiment analysis and speak most languages down to regional dialects, all without training.
Tip: Match repeat customers with a dedicated support agent who can help them every time they reach out. This will strengthen their connection to your brand.
10. Provide proactive support
Reactive support used to be the standard: You wait for a customer to contact your business with an inquiry or issue.
Proactive customer service is now a crucial type of customer service. It means anticipating issues and addressing them before your customers do. For example, an Internet provider may text customers about upcoming service disruptions. Or, a software company might add new resources to its help center before a product update.
Tip: Collect customers’ phone numbers to immediately alert them of changes or updates.
11. Monitor interactions with QA best practices
Continuous customer service quality assurance is essential for maintaining high customer satisfaction. Regularly monitor customer interactions, both automated and human-led, to identify areas for improvement.
This could involve:
Analyzing chat transcripts and call recordings to spot opportunities for agent training or process optimization
Conducting customer surveys to gather customer feedback on specific interactions
Implementing QA scorecards and audits to ensure consistent, high-quality support
By monitoring performance and proactively addressing issues, you can quickly resolve problems, enhance the overall customer experience, and keep satisfaction levels high.
Tip: Establish clear quality standards. Define what “good” customer service looks like in terms of response time, resolution rate, and customer sentiment. Use these metrics to track progress and identify areas that need attention.
12. Build a customer community
A customer community is a space, online or physical, where buyers can connect, answer questions, and share ideas and information. A robust customer community fosters increased trust and brand loyalty. By building such a community, you offer customers more opportunities to succeed with your product, creating goodwill and strengthening their connection to your brand.
Tip: Leverage community forum software to give community managers the tools to create safe and on-brand forums.
Customer satisfaction examples
Looking for more ways to boost customer satisfaction? Check out these examples of businesses that excel in keeping their customers happy.
1. Trustpilot
Trustpilot, one of the world’s largest sources of user-generated business reviews, increased its CSAT by 20 percent by making customer interactions more effortless. “We wanted to make every interaction with customers an effortless experience so they could maximize their value using our services through their preferred channel in their native language,” said Tonni Buur, Vice President Global Support.
To maintain high customer satisfaction amid rapid growth, Trustpilot invested in a self-service support center. This center provides relevant help articles based on users’ submitted requests, helping to control costs and improve efficiency.
2. MOO
MOO, an online print and design company, maintains a 95 percent CSAT with the help of robust customer data. 360 degree customer views give agents context to personalize interactions across channels. Having access to customer data also enables the support team to identify issues in product or process and share that customer feedback with stakeholders across the business.
“We might know that we have a product issue because customers email us, but now we can actually see when the issue occurred and where there is a spike in contacts,” said Doreen Berard, Director, Global Customer Service, MOO.
3. Squarespace
Squarespace, a website building and hosting company, maintains high customer satisfaction by delivering fast, multilingual support across channels. “An omnichannel approach is best for the customer because they can choose how they want to reach out,” Raphael Fontes, Vice President of Customer Operations at Squarespace, said. “We can flex to their needs. We try and create the frame, and then the customer can select the channel they prefer.”
Offering swift support through these channels is key to the team’s service strategy. Squarespace offers 24/7 support, responding to chat inquiries within minutes and email queries within a few hours.
4. Pet Lovers Centre
Pet Lovers Centre, Singapore’s top online pet store and retail chain, leveraged AI and automation to improve team efficiency, which led to a 32 percent increase in customer satisfaction.
Pet Lovers Centre deployed an AI agent to offer 24/7 support and allow its human agents to focus on more nuanced customer issues. Additionally, the team automated manual processes to streamline workflows, reducing response times and enhancing the overall customer experience.
Frequently asked questions
Boost customer satisfaction with Zendesk
Improving customer satisfaction ultimately comes down to delivering fast, personalized, and seamless experiences. Zendesk offers AI-powered customer service software that empowers teams to do exactly that, providing everything teams need to deliver a great CX.
Download our free CSAT survey templates below to start measuring your customer experience. Also, see how Zendesk can help your team improve customer satisfaction at every touchpoint.
Net Promoter, Net Promoter Score, and NPS are trademarks of NICE Satmetrix, Inc., Bain & Company, Inc., and Fred Reichheld.
