CSAT (Customer Satisfaction)

CSAT, an acronym for Customer Satisfaction, serves as a vital metric for gauging the level of contentment customers experience with a product, service, or overall brand.

This glossary term definition delves into the intricacies of CSAT, providing a comprehensive overview that will empower businesses to enhance customer experiences and drive growth.

Table of Contents:

• What is CSAT
• History of CSAT
• Pros and Cons of CSAT
• Examples and Methodologies
• Calculating CSAT – Step by Step Guide
• When do you measure CSAT?
• Tips for Effective Measurement
• Conclusion & Support Information

What is CSAT?

Customer Satisfaction (CSAT) is a metric used to evaluate how content and pleased customers are with a specific product, service, or interaction with a brand.

Typically measured through surveys, CSAT aims to quantify customer feelings and perceptions on a numerical scale.

This metric plays a crucial role in understanding customer loyalty, brand advocacy, and future purchasing behaviours.

History of CSAT

The concept of formally measuring customer satisfaction dates back to the 1970s when researchers began to explore the link between customer contentment and business success.

Informally, ensuring your customers were satisfied dates back to the first known history of humans trading for goods – trading/selling poor seeds or grains, for example, was not the way to ensure you were going to get repeat business!

Over the years, CSAT has evolved to include diverse methodologies such as Net Promoter Score (NPS) and Customer Effort Score (CES), each offering unique insights into customer perceptions.

Pros and Cons of CSAT

PROs of CSAT Measurement

1. Insight into Customer Perception

CSAT surveys provide direct insight into how customers perceive a company’s offerings, highlighting areas of excellence and areas that require improvement.

2. Actionable Feedback

The open-ended nature of CSAT surveys often allows customers to provide specific feedback, which can be used to make tangible improvements in products, services, or processes.

3. Benchmarking and Trend Analysis

Tracking CSAT over time enables businesses to identify trends, measure the impact of changes, and benchmark their performance against industry standards.

Cons of CSAT Measurement

1. Limited Context

CSAT scores, while valuable, might not offer a complete understanding of why customers feel a certain way. Add to that, “Satisfaction” is a subjective word, and “satisfied” may mean different things to different people.

To take it one step further, there is a limited correlation to a customer being ‘satisfied’ and them remaining to be a customer with your business which is why metrics such as NPS have emerged.

2. Survey Fatigue

It seems like it’s almost impossible to complete a transaction anywhere on the internet without being asked for feedback, whether it’s a $2 purchase or purchasing a new car.

Frequent surveying can lead to customer survey fatigue, potentially affecting response rates and the accuracy of results.

3. Cultural Bias

If your business operates globally or across different countries, CSAT data has shown that ratings can differ between cultures.

For example, people in individualistic countries (e.g., the United States, Germany, Ireland, South Africa and Australia) choose the more extreme ratings more frequently than those in collectivistic countries (e.g., China, Korea, Japan and Mexico).

This means that an Australian is more likely to rate service as “amazing” or “terrible” than someone from Japan, who is more likely to select “fine” or “not satisfactory’.

Measuring CSAT: Examples and Methodology

Measuring CSAT often involves distributing post-interaction surveys to customers.

These surveys usually include a single question, such as “How satisfied are you with [product/service/interaction]?”

The respondents then provide ratings, usually on a csat scale of 1 to 5 or 1 to 10, indicating their level of satisfaction, or you can use emojis to represent the scores as an alternative.

You can also use CSAT to obtain more specific information on various ‘departments’ or elements of your business.

This can provide you with insights into areas that are performing well and those that need more attention.

Calculating Customer Satisfaction (CSAT): A Step-by-Step Guide

Step 1: Define Your Survey Question

To calculate CSAT, you need a specific question that asks customers to rate their satisfaction with a product, service, or interaction.

Common csat survey questions include:

• “How satisfied are you with [product/service/interaction]?”
• “On a scale of 1 to 5, how would you rate your experience with [product/service/interaction]?”

Step 2: Collect Responses

Distribute the CSAT survey question to your customers after they’ve interacted with your business.

This could be post-purchase, after customer support interactions, or following the use of a service.

Responses can be collected through various channels, such as email, web pop-ups, or within your mobile app.

Step 3: Calculate CSAT Score

Once you’ve collected a sufficient number of responses, it’s time to calculate the CSAT score.

The CSAT score is typically presented as a percentage and is derived from the number of positive responses (usually 4 or 5 on the rating scale) out of the total responses.

CSAT Score (%) = (Number of Positive Responses / Total Number of Responses) * 100

For example, the CSAT calculation if you received 200 responses and 150 of them were positive (rated 4 or 5), would be:

CSAT Score = (150 / 200) * 100 = 75%

Step 4: Interpret the Results

Interpreting the CSAT score is crucial to understanding customer satisfaction levels. Here’s a general guide:

• 0-49%: Low Satisfaction
• 50-74%: Moderate Satisfaction
• 75-100%: High Satisfaction

Step 5: Continuous Improvement

A single CSAT score provides a snapshot of customer satisfaction at a particular time.

However, to drive continuous improvement, it’s essential to track CSAT scores over time.

By comparing scores from different periods, you can identify trends and assess the impact of changes you’ve made to your products, services, or processes.

When do you measure CSAT?

The most common approach is to use CSAT at specific points in the Customer Journey rather than an overall indicator, which can be better served by other metrics like Net Promoter Score (NPS) or Customer Effort Score (CES).

Using Customer Journey Mapping to identify key ‘moments that matter’ in your customer lifecycle can provide you with valuable intel on what areas/stages of your business need to be improved.

This could be at:

• Support interactions
• Sales interactions
• Check out process
• Onboarding

Popular methods of asking your CSAT question include:

• Automatic after-call surveys
• Emails
• SMS
• In-person (using touchscreens/iPads, push buttons etc).

5 Tips for Effective CSAT Measurement

1. Adequate Sample Size

Ensure your sample size is representative of your customer base for accurate insights.

2. Timeliness

Send surveys soon after the interaction to capture fresh feedback while the experience is still vivid.

3. Clear Rating Scale

Use a clear and easy-to-understand rating scale to minimise confusion and improve response accuracy.

4. Segmentation

Analyse CSAT scores based on different customer segments to uncover insights specific to each group.

5. Combine with Qualitative Data

Use CSAT scores in conjunction with qualitative feedback to gain a deeper understanding of the “why” behind the scores.

Conclusion & Additional Information

There is no doubt that Customer Satisfaction (CSAT) is a foundational pillar of capturing customer feedback that is one of the ‘big three’ along with NPS and Customer Effort Score (CES).

By capturing customer sentiment and feedback, companies can refine their offerings, foster loyalty, and drive growth.

While CSAT comes with its own set of limitations as we’ve outlined, its benefits far outweigh the drawbacks.

As businesses continue to navigate the ever-evolving landscape of customer expectations, embracing CSAT as a guiding metric is not just a choice, but a necessity!

ACXPA contains many resources for people looking to elevate their customer experience with all our content designed to educate, not sell.

We’ve included some links below for further information.