What is CSAT? Customer Satisfaction Score explained

Customer Analytics

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Your Customer Satisfaction Score (CSAT) is a critical business metric that all CS leaders should know. It’s how you manage overall satisfaction with your company and better understand which areas of the customer experience are lacking—from your customers’ perspective. With this deeper knowledge of your customers’ expectations, you can improve customer satisfaction by giving them what they need, when they need it.  

Collecting CSAT surveys is easy. Understanding how to use the data to inform the right business decisions, with the goal of maximizing satisfaction, is more complex. 

In this article, we’ll look at how CSAT scores can help you create more satisfied customers. We’ll explore how to collect and use customer satisfaction score data, including:

  • What is a Customer Satisfaction Score?
  • How do you do CSAT Surveys?
  • How do you calculate CSAT scores?
  • Benefits of knowing your CSAT score
  • What is a good CSAT score?
  • Using customer feedback to improve CSAT scores
  • Other ways to identify satisfied customers
  • CSAT Analysis: What issues are driving your scores?

What is a Customer Satisfaction Score?

A Customer Satisfaction Score (CSAT) is a metric used to determine how happy customers are with a business’s brand, offerings, and interactions. It is defined as a percentage, where 100% is a “perfect score,” and 0% means none of your customers (or those surveyed) are happy with your business. 

Your score is derived from one simple question: “How satisfied are you with [insert company name, offering, or interaction]?” Then the respondent answers from a rating scale of, usually, 1-5. This question is usually asked in product surveys or after the customer has an interaction with a member of your team, like a salesperson or help desk staff member. 

How do you do CSAT Surveys?

CSAT surveys are usually short, often just one question. But, some surveys go more in-depth to measure customer satisfaction for a series of business aspects in the same survey. 

For example, if you’re a coffee shop, you could conduct one survey with the following customer experience questions:  

How satisfied are you with the following aspects of [Business Name]:

1 (Poor)   2 (Fair)    3 (Average)    4 (Good)    5 (excellent)
Ease of ordering
Cleanliness of store
Friendliness of staff
Taste of your food/beverage
The price you paid

How to distribute CSAT surveys

There are many ways and places to collect CSAT survey responses. These include:

  • To new customers during their onboarding
  • When customers renew or make a repeat purchase
  • When customers contact your customer support team
  • After engaging with a VIP sales rep
  • On specific customer anniversaries (e.g., after their first anniversary as a subscriber of your SaaS platform) 

How do you calculate CSAT scores?

Measuring customer satisfaction by calculating your CSAT score is one of the simplest customer satisfaction scores to calculate. You divide all positive responses by the total number of responses and multiply by 100 to get a percentage. 

Here’s your CSAT Score Formula: 

[# of positive responses] / [Total responses] * 100 = Your CSAT score

Example CSAT survey calculation

You have a survey question at the end of a help desk chat conversation that says, “How satisfied were you with your support rep today?” You ask users to rate it on a scale from 1-5. You can group answers of 1 or 2 as a negative sentiment, 3 as neutral, and 4 or 5 as positive. Based on this logic, you count the total number of people who ranked their customer service interaction as a positive experience (4 or 5). 

In this example, assume you had 100 people who completed the survey and 75 people who selected a 4 or 5 for their response. Your CSAT survey score calculation would be as follows:

[# of positive responses] / [Total responses] * 100 = Your CSAT score

[75] / [100] * 100 = 75%

Is CSAT score a percentage?

The goal is to find the average rating and convert it into a percentage to gain a clear picture of what portion of your customers are satisfied. 

Taking it further, you can generate greater insights by asking the same question to people in different stages of the customer journey to see how this percentage changes depending on how long they’ve been a customer. From this, you may uncover that your customer sentiment and satisfaction peaks at a specific time. This knowledge helps you determine which stages of the customer lifecycle are best to focus on to improve the customer experience.

Benefits of knowing your CSAT score

Knowing your CSAT score, and breaking it down to get customer feedback from various aspects of your business over time, can be highly beneficial for customer retention. Here are a few benefits of knowing your CSAT score:

  • You can identify bottlenecks or struggles: Knowing what areas of the customer journey are not positive experiences for your customers can help you focus on those areas to improve their experience. 
  • You can boost customer loyalty: When you take positive action to improve the customer experience, you earn customer loyalty, increase customer lifetime value, and earn referrals. Unhappy customers are likely to give you bad reviews online and talk negatively about you to their friends. 
  • You can better meet customer expectations: Your customers expect you to know their pain points and meet their needs. Every customer interaction is a chance to gain valuable insights so you can increase customer success and happiness.
  • You learn about your customers: The more you can infer about your customers based on their responses at different stages, the better you can position your offerings and customer service to best meet their needs and expectations. 

What is a good CSAT score?

A good CSAT score will differ depending on your industry and business. Aim for a positive score as close to 100% as possible, but note that an average score of 75-85% is generally considered a good goal. With a 75% satisfaction rating, you have roughly 4 happy customers for every 5. 

A more useful metric for a “good” score is measuring how your score changes over time. This is why we recommend continually collecting customer feedback and analyzing trends in the data.

Industry CSAT benchmarks

To compare your company to benchmarks in your niche, look to the American Customer Satisfaction Index (ACSI), considered the gold standard for customer satisfaction benchmarking. 

Here are some sample industry benchmarks according to the American Customer Satisfaction Index: 

How Instacart increased CSAT scores by 35%

A great example of how collecting, analyzing, and actioning on customer feedback can have a positive effect on CSAT scores is Instacart. This company offers a peer-sourced network of personal shoppers who will pick up your grocery order and deliver it to your home. 

With over 4 million customer contacts, user self-selection when creating support tickets lacked precision leading to inefficient categorization and slow response time. Idiomatic’s machine learning algorithm was able to analyze support tickets in real-time, streamlining support workflows with ticket routing, agent specialization, and spike notifications. 

Analyzing key drivers of negative support experiences led to a 35% increase in positive CSAT scores, as well. 

This also saved them hundreds in annual support costs by proactively addressing common customer complaints before they became a problem and driving down contact volume. 

Using customer feedback to improve CSAT scores 

The goal of doing CSAT customer surveys is to better understand your customers so you can make improvements to turn consistent negative feedback into happy customers and repeat business. The only way your customer satisfaction score leads to success is if you act on the right data and make the business changes in the best interest of your customers. 

Here are a few examples of how to use CSAT survey results to improve your scores:

  • If you notice many customers with the same issue, it’s likely an issue that needs realignment from a business perspective. 
  • If you see a specific help desk rep getting lower-than-average reviews, you can provide them with additional skills training.
  • If you notice customer success drops after a particular period, look at what you can change in the customer journey before that point to reduce customer churn. 
  • If your CSAT feedback indicates customer issues with logging into your SaaS platform, have your technology or IT team look for ways to make login easier. This might include integrating a Google sign-in option for your platform, so users don’t need to make another username and password for your app.    

Other ways to identify and measure satisfied customers 

CSAT scores are just one metric to measure customer satisfaction to see if your company is meeting customer expectations and needs. Here are three other standard metrics to measure customer satisfaction:  

Net Promoter Score (NPS)

Your NPS score measures customers’ likelihood of referring your company, product, or service to a friend, family member, or colleague. This score collects data from various sources, a key data source being customer satisfaction surveys. You take your survey data and organize it into three groups: detractors (customers with negative sentiments), passives, and promoters (customers with overwhelmingly positive sentiments). Then you calculate your NPS score.  

A good NPS score is between 0 and 30. Anything above 0 is technically considered “good,” while scores above 50 are considered “excellent,” and above 75 is categorized as “world-class.” 

Learn more about NPS surveys and scores

Customer Churn and Retention Rates (CRR)

In addition to knowing how happy your customers are, it’s also helpful to know how long they stay loyal customers. Customer churn is the percentage of customers who leave after a specific time. Customer Retention Rate (CRR) is the percentage of loyal customers over a particular period. 

You can use your customer retention rate to measure the success of other customer experience enhancements you’re making to boost customer satisfaction. Measure your CRR and churn before you make any changes and again a short period after making changes. If your CRR is higher (you’re retaining more customers), it means your business changes are likely having an impact on your customers.  

Customer Effort Score (CES)

Your CES measures how much effort your customer must use to solve their problem or issue. This helps you understand how much customers are willing to do to get what they need from your brand. Customers can answer a single-question customer satisfaction survey question like, “How easy was it to get your customer support problem solved today.” 

This metric only provides high-level data and is best analyzed with other data and metrics to get deeper customer insights.  

Learn more about analyzing survey data

CSAT Analysis: What issues are driving your scores?

The secret to using your CSAT scores to provide a better customer experience is to uncover the exact issues affecting your scores. Generating tangible and actionable insights from CSAT data is a chore that can be automated and perfected with Machine Learning. 

Knowing people are unhappy around renewal time isn’t enough to inform the right business changes. Instead, having the right data to understand that the renewal form isn’t user-friendly, for example, will help you update the form to meet your customers’ needs.  

This is when Idiomatic comes in handy. Idiomatic is an AI-driven customer intelligence platform that takes your CSAT data and processes them with machine learning models to generate easily understandable insights. These are the insights which tell you which actions you need to take to increase your CSAT score and provide  a better overall customer experience. 

Idiomatic makes customer feedback analysis automatic. Curious to see how easy it is? Request a free demo today, and you’ll be one step closer to increasing your customer satisfaction.

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