Customer satisfaction: Why It matters & how to track it.

by Mike Whitehurst

What Is Customer Satisfaction - Cavendish Wood Blog

Customer satisfaction doesn't just impact your company’s bottom line. It also affects the morale of your team, and the retention rate of both clients and staff.

Businesses need money to survive, and to make money, you need customers. Ideally, your customers should be happy, tell their friends and family about you, and keep on coming back to you.

To achieve this, the importance of having satisfied customers can’t be emphasised enough. Fortunately, in this era of digital transformation, tracking and managing customer satisfaction has been made significantly simpler than it was in previous years.

To help you get it right, we've created this helpful customer satisfaction Q&A with the essential details you need to know to understand what it is, and how you can track it.


What Is Customer Satisfaction?

Customer satisfaction is the term used to describe how happy your customers are with your products and services. This knowledge helps you identify where you have problems that need improving, compared with where things are going well.

Q: What is customer loyalty?

A: Customer loyalty is the behaviour shown by your clients when they come back and buy from you time and again. It’s also often called customer retention, and it’s one of the best ways to know you have satisfied customers.

Q: What determines customer satisfaction?

A: You can determine customer satisfaction based on several factors, including analysing data about how long the person has been a customer. You can also calculate how much he or she has bought from you in that time, and ask buyers to complete customer satisfaction surveys about those aspects of your customer service they liked.

Q: What is customer engagement, and how does it differ from satisfaction?

A:  Customer engagement is the value given to the depth of the customers’ relationships with your company, product or service. This usually happens before making a purchase and relates directly to your number of conversions, while happy customers are only identified after making a purchase.

Q: What is CSAT in customer satisfaction?

A: CSAT is the name given to Customer Satisfaction Scores, which are a way to measure satisfaction by asking survey questions and having the customer rate them according to a scale. This is a simple way to complete the customer experience with your company and to find out if it was successful. You can also see from the responses where during the process the customer found any problems.

What is CSAT in customer satisfaction - Cavendish Wood Blog

Q: Is customer satisfaction a KPI (key performance indicator)?

A: Companies usually measure several key performance indicators to discover how well the business is doing overall. Measuring your customers’ satisfaction is a very good way to tell whether the company is doing well, so it’s worthwhile to set satisfaction goals and aim to reach them. Tracking components like the net promoter score (NPS), levels of satisfaction and the customer effort score can help you understand whether you are achieving your goal.

Q: How to (do you) win customer satisfaction?

A: You need to be successful in several areas to win customer satisfaction. These include:

  • showing your customers that you understand their needs,
  • selling a product or service that does what it claims to do, fulfilling customer expectations;
  • providing easy-to-access digital channels of communication, and
  • delivering prompt, high-quality customer service both during and after the purchase.
Q: How to (do you) drive customer satisfaction?

A: If you measure customer satisfaction consistently, you’ll know when a problem arises. In instances when you get a bad customer satisfaction score, have a senior employee call the customer personally for feedback the very same day. Train them to listen actively and document the customer’s feedback, and ask how you can get a better score the next time they complete a survey. Research shows happy customers are a company’s best ambassadors, with 77% of consumers sharing a positive customer experience with others.

How to drive customer satisfaction - Cavendish Wood Blog

Q: How do customer satisfaction and customer expectation link?

A: Expectations indicate the level or standard your customers expect from you. This applies to factors like price, speed of supply, ease of purchase, the efficiency of service, and other aspects that colour the customer experience with your company. A survey by Pricewaterhouse Coopers (PWC) shows the higher the expectations, the better your service has to be to achieve the perception of “quality”.


Why customer satisfaction is important.

Customer satisfaction is important to your company because it’s the primary way to measure how loyal customers are and identify unhappy customers. It helps you reduce customer churn and increase revenue, and is a key way to differentiate you from competitors.


Q: What are the benefits of customer satisfaction?

A: Cost: According to the Harvard Business Review, it costs anywhere from five to 25 times more to acquire a new customer than to retain an existing one. In addition, a company with satisfied customers enjoys average higher revenue on purchases, less advertising spend, and lower sensitivity to pricing. Other benefits are improved customer loyalty, increased word of mouth marketing, and a better chance of recovery from a bad customer experience.


Q: How to (do you) maintain customer satisfaction?

A: To maintain customer satisfaction, survey every customer to find out how their experience went. Evaluate problems identified by the survey and follow up every complaint or less-than-happy consumer. Train your staff to provide exceptional customer support. Offer loyalty programs that provide customer incentives.


Why it is important to measure customer satisfaction.

All these factors only have value for your business if you know what your customer satisfaction levels are, which makes measuring customer satisfaction very important. How—and how often—you measure it also matters.

Why it is important to measure customer satisfaction - Cavendish Wood Blog


Q: How often should customer satisfaction be measured?

A: This depends partly on the type of product or service your company offers. For small, one-off purchases, it’s helpful to send customer satisfaction surveys shortly after the event while the experience is still clear in the customer’s mind. For large projects, companies typically wait until after the project is complete and the results are visible. Customers who buy regularly should be surveyed either annually or semi-annually, depending on how often they make a purchase.


Q: Why is a customer satisfaction survey important?

A: Surveys are not only a good way to find out how your customer feels about their experience. They are also valuable for letting customers know you are interested in their feedback, and to thank them for the purchase. They might also provide data that allows you to estimate the customer satisfaction levels your competitors have. Surveys make the customer experience more personal and differentiate your brand from others.


How to track customer satisfaction.

While surveys are the most common method of tracking customer satisfaction, they aren’t the only way. Social media is also very good for finding out what your customers are saying about you. Emailing clients for feedback, recording the findings of a one-to-one conversation, and cross-referencing website analytics are all useful ways to gather data. And if you want to get really scientific, you can conduct usability tests and hold focus groups. All these methods help to turn up specific information, which, when you combine it all together, paints a detailed picture of your customer satisfaction levels.


How to manage customer satisfaction.

Managing customer satisfaction is key to retaining customers and increasing sales. The best ways to do this are to correct product or service problems as early as possible before your customer becomes a candidate for churn. Monitor transactions and invoicing, and check the customer’s survey history to see what their typical response looks like. Improve your customer retention by getting alerted early to potential problems and unhappy customers and taking action.

New call-to-action