Measuring Customer Satisfaction
As with any area being managed, it’s critical to measure customer satisfaction on a continuous basis. Measurement forms the basis for identifying improvement activities and tells the IT leadership how well their organization is doing.
Most measurements of customer satisfaction come from the very subjective CSAT, or customer satisfaction survey, which is touted as the measure of importance. This is a short view however, due to the subjective and general nature of the survey. Objective measures should be combined with surveys to broaden the view. Thus, it’s important to develop a metrics program that aligns with critical success factors of the business or IT initiatives, and which provide opportunities to identify areas that need improvement.
Metrics of Importance in Customer Satisfaction
There are several ways customer satisfaction can be measured, combining key metrics to get this complete picture:
While some providers focus solely on customer satisfaction surveys, these alone don’t tell the entire story. They do provide a good overview however they don’t provide the detail needed to improve customer service. NPS and CES questions can be added to basic customer satisfaction surveys and drive metrics that broaden the scope of the survey.
CSAT Score:
Customer satisfaction is most commonly measured via the use of surveys. Surveys can and should be taken on a regular basis and there are several means of surveying customers:
Each of these provides a different set of information that the organization can use to improve performance:
- Routine, periodic surveys when conducted across all business units provides general information on customer satisfaction and may reveal areas which require improvement. Combined with internal demographic information (i.e. line of business, personal data), analysis can reveal whether these areas are specific to certain demographics or widespread throughout the business.
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Transaction surveys, taken after engagement with a customer provide two important customer satisfaction opportunities. The first is that they provide more detailed information with the customer’s satisfaction with the particular transaction and can help the IT spot weaknesses in their process. Secondly, when a poor survey results, it may be possible for the IT to step in with an offer or enhancement that helps prevent churn or loss of reputation. These surveys should include questions that support the analysis of customer effort to engage with IT.
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Surveying customers who support outsourcing functionals can also provide a wealth of information about the things the organization does poorly that can be used for improvement programs.
Most CSAT surveys will be analyzed by scoring each question, then totaling the scores or showing the percentage of each question considered to be a great result, good result, neutral, negative or very negative result. It’s important to look at the results of each question individually as they will indicate where improvement might be needed.
Net promoter score (NPS)
The net promoter score is a newer measure that has grown in importance because of social media and the Internet. This metric looks at the brand loyalty of a customer and whether they will continue to support IT or push for replacement. Thus, the net promoter score is a measure of an individual’s opinion and which of the following type of customers they have become:
The metric itself is expressed relies on specific questions in a survey (such as “how likely are you to do business with us again” and “how likely are you to recommend us”) as a percentage of positive responses versus the total number of responses. The metric is expressed as follows:
(Positive Responses – Negative Responses) / Total Responses
In this calculation, the passive or neutral responses are not considered. The final percentage shows the number of promoters, with the detractors removed, as compared against total responses. There may be other opportunities with passives and detractors, but these would fall into efforts for improving customer service.
Customer Effort Score (CES)
Ease of engagement can greatly impact the relationship between IT and its customers. Thus, the customer effort score, which measures how easy it is to do business or conduct a transaction is critical. This score can be subjective, via surveys but can also leverage web site metrics to notice when a customer fails to engage or gives up. Consider a scenario where an employee visits the service request catalog and puts several items into a shopping cart, moves around the checkout process, but fails to execute the submission. It is likely in a situation such as this that there was a design issue with the catalog making it difficult to finalize the checkout, causing the customer to abandon the purchase.
When surveying customer effort, a simple question asking how easy it was to obtain the desired outcome, with a sliding response scale enables a business to calculate the percentage of time it was easy or very easy vs. the percentage of time it was hard or too hard. The most important aspect of this measure compared to other methods of measuring customer satisfaction is that it is used as a means of churn prevention. Determining the aspects of engagement that are difficult enables IT to put improvements in place that improve the effort on the next transaction, helping with customer engagement. A customer may do things “the hard way” once or twice, but if it’s always difficult to do business with a particular company, adoption will suffer. This is why CES is so important to customer satisfaction measurement. It’s also worth noting that this is a critical measure for web site experiences like a service portal, where interaction with an employee may not happen. One way to avoid dissatisfaction in this scenario is to have a chat window pop up if the activity indicates a customer may be running into difficulty.
Customer Churn Rate (lost customer/total customers)
The customer churn rate measures customer retention expressed as the percentage of customers who have stopped doing business with a provider. This metric directly expresses or calculates the overall churn, but when combined with customer effort and net promoter metrics can help a business determine when a customer will leave (churn) and how to prevent it. This knowledge leads to taking positive steps to impact retention. The metric is calculated as follows:
Total # of Lost Customers / Total Customers
Looking at the power of this area, measuring and prevent churn demonstrates an intentional effort to satisfy their customers, who are already a captive audience and while it takes some effort, retention is an important activity in ensuring customer satisfaction and continuing to grow the relationship between IT and the business.