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Best practices 12 min read

What is customer satisfaction? (And how to achieve it)

Customer satisfaction can make or break your business. Use this quick guide to learn what you need to do to keep customers happy.

By Courtney Gupta, Customer Service Enthusiast

Last updated September 16, 2022

In our Customer Experience Trends Report 2021, we uncovered a startling statistic: about 50 percent of respondents said they would switch to a competing brand after just one bad customer experience.

Fifty-percent customer churn is a death sentence for almost any business—which means it is time to prioritise customer satisfaction.

It does not matter if you are a Fortune 500 company or a mom-and-pop shop up the road. Consumers will compare your business’ support and customer experience to the biggest and best competitors. To keep your buyers happy and compete with mass retailers, you have to deliver like Amazon with all the charm of Etsy.

Customer satisfaction can be the difference between your business failing or thriving. If you want your business to succeed, especially in these uncertain times, you have to maintain high satisfaction levels throughout the customer journey. This guide gives you everything you need to start putting your customers first.

To keep your buyers happy and compete with mass retailers, you have to deliver like Amazon with all the charm of Etsy.

Your guide to customer satisfaction

  1. What is customer satisfaction?
  2. The importance of customer satisfaction
  3. How to do you achieve customer satisfaction?
  4. Customer satisfaction tools and software

What is customer satisfaction?

Customer satisfaction (CSAT) is a measure of how well a company’s products and services meet customers’ expectations. It reflects your business’ health by showing how well your products are resonating with buyers.

How to measure customer satisfaction

Customer satisfaction can seem like a vague concept, but there are concrete ways to measure it. You can source a customer satisfaction score by conducting CSAT surveys, for example. These are typically short, one- to two-question surveys offered at the end of a business transaction. A classic question is “How satisfied are you with the product?” with answers ranging from “very satisfied” to “very unsatisfied.”

Although CSAT is one part of customer satisfaction, it is far from the only measure. Businesses also use Net Promoter Score (NPS) surveys to determine whether their customers are promoters, detractors, or passives.

Get started with CSAT surveys

Ready to write your own CSAT surveys? Check out the customer satisfaction survey questions you should be asking.

Customer satisfaction vs. customer loyalty

Warning: Do not confuse customer satisfaction with customer loyalty. They are intimately linked, but there is a difference between the two concepts.

Customer satisfaction measures how happy a customer was with a support interaction or a purchase. Customer loyalty, on the other hand, is an ongoing state. Loyal customers give a company their repeat business over time. It’s not a short-term measure, but rather a long-term understanding of the health of your customer relationship.

When you create and maintain a customer experience that resonates with buyers, customers return again and again. Ensuring high customer satisfaction in the short term is a key component of gaining that long-term customer loyalty.

Why is customer satisfaction important?

Customer satisfaction is important because it means your customer base likes what you are doing. Research shows that customer satisfaction leads to greater customer retention, higher lifetime value and a stronger brand reputation.

5 reasons customer satisfaction is important
  1. Customer loyalty

  2. Customer satisfaction measurement

  3. Repeat purchases

  4. Customer lifetime value

  5. New customer acquisition

1. It drives customer loyalty

Satisfied customers tend to share their positive experiences with friends and family. But the opposite is also true: An unhappy customer tells more people about their negative experiences than a happy customer does.

Social media makes social proof more powerful than ever before, with 79 percent of people in the United States using social media to connect and share their experiences. Today, a customer can easily share feedback on a bad experience with millions of people with a single click (so make sure that review is going to be a positive one).

You are more likely to gain positive referrals if you use customer feedback to prioritise top-of-the-line service. For example, our report found that 89 percent of people think quick responses are important when deciding which company to buy from. If you want to improve your company’s response time to support that data, you might incorporate AI technology, like our AI-powered Answer Bot, to send prompt responses.

Research customer satisfaction

Can not get enough customer satisfaction research? Download our customer satisfaction research fact sheet.

2. Customer satisfaction metrics reflect your support team's performance

Customer satisfaction benchmarks and metrics do not just help you gauge how happy your audience is—they also tell you how your support team is doing. Use a variety of team metrics to understand customer satisfaction levels:

  • Your support team’s initial response time: In our customer experience report, the #1 most frustrating part of bad service was long wait times. Faster support team response times not only lower customer frustration, but also give you a measure of your team’s speed and efficiency.
  • The length of time it takes your team to resolve a customer issue: If it is taking your team hours to resolve issues that could be dealt with quickly, it might be time to tweak your internal processes. Do not just strive to respond quickly—resolve quickly, too.
  • How many times a ticket or call required a transfer to find a resolution: Few things are more frustrating than having to wait to be transferred to a new agent and repeat your issue to get your request completed. If transfer occurrence drops, customer satisfaction should rise.

Considering our study found that the #1 aspect for good customer service was quick issue resolution, your team’s efficiency in these areas says a lot about customer satisfaction. Our built-in analytics function is a great way to observe how well your support team serves customers historically and in real time. With the help of AI, teams can even predict customer satisfaction during a conversation—before a customer takes a survey.

Find the right tools to measure customer satisfaction

Want to learn what tools industry experts use to understand customer satisfaction? Read our article on how to measure customer satisfaction (based on advice from industry leaders).

3. It encourages repeat purchases

A satisfied customer is a loyal customer, who will stick with your company year after year. So, how do you get those repeat customers? By hitting your customer support efforts out of the park. Our trends report agrees: 57 percent of consumers say excellent customer service is a factor in their brand loyalty.

customer satisfaction

How do you know if your customer service is driving customer loyalty? There are two different ways to answer this question. The first is to directly poll customers using a net promoter score survey, or to ask questions like:

  • “Would you speak to your friend about our brand?”

  • “How often do you speak to your friends about our brand?”

These questions can shed some light on customers’ likelihood of being brand ambassadors.

The second method is to observe customer behavior. For example, you can track repeat purchases with loyalty programs and referral posts for your business on social media. Reading conversations in your community forum can also give you insight into how customers feel about their experience with your product or service.

Learn about satisfaction prediction methods

Understanding customer satisfaction is a nuanced concept with many facets. But there is a science behind satisfaction prediction—check out our article for more details.

4. It increases customer lifetime value

75 percent of customers are willing to spend more to buy from companies that give them a good customer experience, according to our Trends Report. Satisfied customers are not only more likely to remain loyal and less likely to churn, they are also more likely to spend more money with your business. customer satisfaction In fact, during the first 6 months of the COVID-19 pandemic, those companies that had the highest CSAT scores were 8.7x more likely to have significantly grown customer spend.

5. It boosts new customer acquisition

At the onset of the pandemic, companies with the most satisfied customers were also 3.3x more likely to have grown their customer bases. Customer service is not just important for supporting existing customers, it is also key to bringing in potential customers and supporting them when they reach out. If a prospect does not have a positive experience when they interact with your support team, they will be less likely to purchase. The main difference between service today and service 10 years ago is that customers expect premium service to be built-in from the first sales or marketing interaction and carry through to the moment they ask for help, post-purchase and back again. To position themselves for success, businesses must integrate service into the journey at every interaction point.

How do you achieve customer satisfaction?

The benefits of focusing on customer satisfaction are clear. But actually making customers happy can take some trial and error. The key is persistence. Always aim to go above and beyond for customers, and lean on other departments to help boost your customer experience.

How to improve customer satisfaction
  1. Customer feedback

  2. Convenience

  3. Speed.

  4. Build a customer-focused culture

  5. Empathy

1. Become obsessed with customer feedback

Become a student of your customer feedback. Do not just collect it: Analyse it and apply it to what your customers are saying. Commit to learning about buyers’ pain points and then make a plan to alleviate them in ways that set you apart from competitors.

A great way to do this is to use Zendesk’s feedback feature. The tool includes analytics for agent performance and customer surveys, so you can study complaints and compliments regarding your services.

Even without a CRM like Zendesk, you can still keep close tabs on customer feedback. Social media and online review boards are especially good places to monitor buyer attitudes. Search for mentions of your brand name or your dedicated hashtags on social sites to see what people are saying.

2. Create a sense of convenience

The most successful physical stores are all about buyer convenience. Customers enjoy places with flexible hours that fit their schedules. Think of the success Walmart, 24-hour drug stores and gas stations have with that model. We are also more likely to shop at places close to us.

To build the same sense of convenience as a brick-and-mortar store online, you need to have a digital presence on the platforms and services your customers already use. Use SEO-optimised blog posts and social content to be front and centre in Google searches and social media feeds. And make a point to be easily accessible for support questions on your customers’ channels of choice.

Offering support via messaging apps (like WhatsApp, Twitter and Facebook) helps businesses create that same sense of 24-hour availability. These are the same channels customers use to interact with friends and family, so it gives you a chance to meet them where they already are.

You should also offer opportunities for customers to help themselves. Many customers prefer the hands-off convenience of a knowledge base, where they can search for information without having to interact with customer support reps.

3. Deliver fast responses

In our Trends Report, we asked customers what matters most to them when resolving an issue with a company. 73 percent said "they resolve my issue quickly" and 59 percent said "they respond quickly." 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. Here are some tips for delivering faster responses:

  • Pre-written responses ensure agents do not have to write common answers repeatedly

  • Messaging channels enable agents to help more customers at once because they are asynchronous. In fact, support teams that have the fastest resolution times are 42 percent more likely to be messaging with their customers.
  • AI-powered bots can intercept would-be tickets when agents are off the clock

  • Bots can also gather details upfront, such as city or account type, before an agent takes over

4. Make customer satisfaction a company-wide focus

To improve overall customer satisfaction, you have to put time and effort into a business strategy that puts customers first.

Using a tool like the balanced scorecard is a great first step. The balanced scorecard guides companies in thinking about their operations from four different perspectives:

  • Financial

  • Internal business

  • Customer

  • Innovation and learning

It also helps companies consider how all their activities are working toward the goal of high customer satisfaction.

The balanced scorecard is just one way to incorporate customer satisfaction into company goals. You can (and should) incorporate customer satisfaction into your company mission and value proposition, too. That keeps it top-of-mind with every employee, regardless of their position.

Tips for improving customer satisfaction

When employees can see the impact of their work and all stakeholders feel committed to a goal, they can achieve high customer satisfaction levels. But do not take our word for it. Check out our CSAT expert roundup to learn what experts say is the easiest way to improve customer satisfaction.

5. Lead with empathy

If there is one thing the pandemic taught us, it’s that empathy is an essential skill for support professionals— it is even more valuable than customer service experience. In fact, nearly half of customers want to interact with an empathetic customer service representative. Support leaders can provide empathy training, but it is also a good idea to hire support reps who can already put themselves in an angry customer’s shoes and communicate that understanding to the customer. Businesses might also consider allowing agents to make exceptions to certain policies in situations that require empathy. customer satisfaction

Customer satisfaction tools and software

While agents interact with customers directly, the company has to provide them with tools to do their jobs well. Customer satisfaction requires a mix of both customer service skills and the right software. Here is a list of customer satisfaction tools and software:

  • Customer service software that makes it easy for customers to reach you on the channels of their choice
  • A ticketing system that makes it easy to manage customer requests and respond to customers quickly and effectively
  • CSAT surveys: With customer service software these can be sent automatically after every customer service interaction

  • Survey tools that integrate with your customer service software, such as SurveyMonkey

  • Robust customer analytics tools that track customer engagement and support performance across channels

An investment in customer satisfaction is an investment in your company’s future

Today’s customers have very high expectations of the companies they choose to do business with. Facing such high standards, your best shot at growth is to deliver an exceptional customer experience. But a commitment to customer satisfaction has to go beyond mere good intentions; you need the right tools to assess your current practices, figure out what your customers need and chart a path for the future.

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