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Introduction

To know if you’re on the right track to provide the best Customer experience, it is crucial to measure your efforts and optimize your performance.

We found 5 Customer satisfaction metrics which you should apply to your strategy to deliver the best results for your Customer service, especially in SaaS companies.

Why to even bother?

There are various reasons for that. First, and foremost, because happy Customers are loyal Customers. Customers tend to return when the service or a product they purchased was satisfactory.

In fact, when it’s unsatisfactory almost 13% of unhappy clients spread the bad word about the company to over 20 people (according to McKinsey study).

Developing a Customer Satisfaction process will help you to find those unhappy ones and discover what went wrong in their experience. Also, it is crucial for any business to interact and communicate with their clients on a regular basis.

This way you can make sure that your clients will get the experience they expect. Moreover, when using Customer satisfaction metrics, you have your finger on the pulse.

Furthermore, taking care of your Customer Satisfaction is… trendy! Last year, a study by Spigit showed that 75% of companies said that their objective was to improve Customer Experience (which includes Customer Satisfaction).

There is now a higher than ever level of awareness of this subject, and people noticed that investment in this area is eventually a low-cost opportunity to generate high income.

Below are the crucial Customer Satisfaction metrics to ensure the success of such an undertaking.

Customer Satisfaction Metrics

1. Net Promoter Score®

One of the most important metrics regarding measuring your efforts for Customer service is the Net Promoter ScoreNPS stands for an index that ranges from -100 to 100 reflecting the willingness of clients to recommend a particular service or product further.

To measure that, it is essential to ask Customers a simple question about the likelihood of recommending your product and rate it using the 11-point scale (from 0 to 10).

Example of NPS question: On a scale from 0 to 10, how probable it is that you would recommend our service to a friend?

By using this kind of scale, it is possible to classify Customers into 3 categories:

  • Detractors – those who rated their likelihood of 6 or lower. You can tell they are not particularly interested in spreading positive words about your services.
  • Passives – those who gave a score of 7 or 8. They could be willing to recommend your products, but also wouldn’t hesitate to switch a brand.
  • Promoters – those who gave a score of 9 or 10. Are your brand’s evangelists, as they repeat some interaction with your product or service and would happily recommend it further.

To measure NPS, you have to simply subtract the percentage of detractors from the percentage of promoters.

Why measure NPS?

Many studies and examples have already shown that NPS results have a significant impact on the business. In the case of American Express, the management started to evaluate its service reps by their NPS results.

The insights received and later implemented led to a 10-15% increase in customer spending and 4 to 5 times higher retention rate. In an interview published in 2012 by Fortune magazine, the Managing director of AmEx, Jim Bush, said: “We’ve been able to show that increased satisfaction drives increased engagement with American Express products, and that drives shareholder value.”

Another example comes from British Gas Services. A few years ago the company had issues with its home heating installation units and was losing money. To remedy that, they introduced NPS and implemented a feedback process of daily NPS rating of the individual installers. In two years, the NPS overall results increased from 45 to 75.

The customer complaints reduced by 75% and profit increased greatly. At the beginning of 2018, the NPS score of this company is 69.

The above examples prove that monitoring NPS is beneficial for the business. While in itself it is just a snapshot of Customer’s sentiment, this metric facilitates adding more in-depth feedback by adding a follow-up, open-ended question.

That is the source of the best feedback that may be quickly introduced in the day-to-day work.

2. Customer Acquisition Cost

CAC is another Customer satisfaction metric that you should consider when it comes to measuring your Customer service quality and overall Customer satisfaction. While it is more used in sales and marketing, it can also be crucial for Customer satisfaction.

To calculate CAC, divide all of the marketing expenses by the number of Customers gained in a particular period. If the costs are too high, maybe your marketing strategy and Customer satisfaction factors are worth rethinking.

Why measure CAC?

It is one of the main KPIs analyzed while the company is scaling up; it is used for A/B tests of acquisition channels, and it is also useful in the customer segmentation. 

Sometimes it doesn’t take a lot to change some details which can affect the whole experience too, eventually, decrease the costs of acquisition and keep Customers loyal and happy.

How to reduce CAC?

Experts have many ideas on this matter, but they all agree on five: improving the website conversion, implementing buyer personas, using marketing automation, investing in customer retention and reducing churn.

3. Churn

Churn is definitely one of the metrics every company should measure to predict ups and downs – and prevent negative effects. It can also show you the condition of the company and its ability to handle the difficult situation of Customers canceling their regular subscriptions.

It is also one of the very first indicators of Customer dissatisfaction.

Thankfully, many companies successfully reduced their Churn rate, and you can always follow their example.

There is the case of SaaS startup Groove that decided to research the reasons their Customers were quitting the company, and this allowed them to use data-driven tactics that eventually led to reducing their churn rate by 71%.

Another example of successful churn reduction is Mention, which managed to reduce its churn by improving and increasing communication with their Customers. One of the tools they used was Intercom.io for customer support and to help with user segmentation.

Their goal was 20%, but they managed to achieve 22% churn reduction. If you would like to know more about using this app for improving customer communication, check our team’s article here.

There are many ways you can use to measure churn and whichever you choose the right one is the one you use. Collect necessary data to keep your Customers or to make them happy enough to stay and not willing to switch.

4. Customer Satisfaction Score

CSAT is used to measure whether your product or service meet your clients’ expectations. Customers assess their experience by answering the following question: “How would you rate your experience with your … (e.g., recent support requirement)?”. 

On a 5-point scale from “Very Unsatisfied” to “Very Satisfied.” Its versatile applicability allows asking a vast variety of questions. However, the focus falls only on a specific interaction. So you can ask about the support, quality of the delivery or overall service experience.

This way you will be able to find the points which need improvements or immediate attention. To measure your score simply sum the responders who answered “Satisfied” and “Very Satisfied.” The higher the number, the happier your clients are.

Various strategies can be implemented to achieve higher CAS. Call Centre Helper offers as an example offering proactive customer service: “The key here is to contact your customers before they need to pick up the phone and contact you!

To be effective, these contacts should be timely, personalized and relevant to the consumer.”

Nonorep advises setting clear expectations and exceeding them: “Nothing is more frustrating for a consumer than wandering around in a digital world unsure of what to expect from a business, or when.

Let customers know up front what your standards and practices are. (…) Removing the customers’ uncertainty about such common issues in customer service lets them know that a company is committed to their success and satisfaction.”

5. Customer Effort Score

Otherwise called CES, it’s a combined NPS and CSAT. It is used to measure how much effort Customers have to put into a certain interaction with a company. The survey asks only one question: “Did the company make it easy for you to handle your issue?” which can be modified according to the company and situation.

Customers need to choose one of the seven answers from the scale. Beginning with “Strongly Disagree” through “Neutral” and ending with ”Strongly Agree.” To measure the score, count the average of all the collected answers.

When the number is low, it means that your Customers are putting too much effort to interact with your business. Remember that the results are only indicators of your Customers’ effortlessness, and do not delve into the reasons why some of them answered below “Neutral.”

In the study “Stop Trying to Delight Your Customers” published in the Harvard Business Review, the researchers state that they evaluated the predictive power of CSAT, NPS, and CES on the customer loyalty and it resulted in Customer Effort Score outperforming the others.

In this case, the CES power seems to be caused by two factors: “its ability to capture customer impressions at the transactional level (as opposed to NPS, which captures more-holistic impressions of a company) and its ability to capture negative experiences as well as positive ones.”

Authors of the Forbes-published article, “Reducing Customer Effort Is Your Best Investment” argument their statement: “Today’s customers are busy and don’t want to have to jump through hoops to get the help they need, especially if a product breaks or they have issues with service.

Reducing customer effort makes life easier for customers and improves their impression of the brand and their overall customer experience.”

If you need help with running effective customer satisfaction surveys, then here are some tips to help you with that.

Summary

Get to work and measure happiness!

Customer Success Metrics infographic

Keeping your clients happy is one of the most curtail factors in maintaining a successful business. The benefits are immeasurable, but to collect them, you have to collect your Customers’ opinion.

With the Customer satisfaction metrics listed above, you will be able to assess what is the current state of your clients’ experience, how to prevent any dissatisfaction and keep the clients loyal. The better you’re at analyzing and optimizing, the more impressive will be your Customer service.

Therefore, you’ll be able to provide better overall Customer experience. There are many more metrics you could take into consideration, but if you’ve never done it before, it’s better to start with some basic ones, such as NPS.


Lucjan Kierczak

Head of Marketing at Survicate.