Unhappy customers lead to lost revenue and negative word of mouth. That is why it is becoming increasingly important for companies to measure how satisfied or dissatisfied their customers are. But how do you translate customer emotions about your service into measurable data? And which
Key Performance Indicator (KPI) fits your organization best? This article explains the most commonly used methods.
How important are satisfied customers?
Customer retention should be at the top of every company’s priority list. Around 91 percent of dissatisfied customers never purchase your product or service again. Research also shows that loyal customers are responsible for roughly 20 to 80 percent of total revenue. In addition, retaining existing customers is significantly more cost-effective than acquiring new ones.
How do you find out what your customers think?
The most common way to understand how customers feel about your product or service is through customer satisfaction surveys. These surveys are usually distributed through the same channels customers already use to interact with your company. The most common methods include:
In-app surveys
An in-app survey is a direct and effective way to ask customers for feedback while they are actively using your service. These surveys are usually short and contain only one or two questions, which results in a high response rate.
Post-service surveys
Customer service teams can request feedback immediately after assisting a customer. In the past this was mainly done by phone, but today it often happens through live chat. The results are not always completely objective, as some customers may hesitate to give honest feedback directly to an agent.
Email surveys
Email surveys allow customers to share more detailed feedback about their experiences. The response rate is usually lower, around 10 to 15 percent, but the insights are often more in-depth.
Social media monitoring
Social media platforms can provide valuable insight into how customers truly feel about your brand. With the right monitoring tools, you can discover information that traditional surveys may not reveal.
Customer reviews
Unlike phone or chat surveys, review platforms often provide more unfiltered feedback from customers. Reviews can be collected through tools such as Google Reviews or platforms like Trustpilot.
The first two methods are particularly useful for collecting quantitative data. Social media monitoring and reviews provide deeper qualitative insights into customer sentiment. Email surveys can provide a mix of both. In many cases, companies combine several methods depending on the type of insights they want to gather.
How do you measure customer satisfaction?
Customer satisfaction can be measured using several different metrics and KPIs. Below are the most commonly used ones.
- CSAT (Customer Satisfaction Score): CSAT is one of the most traditional ways to measure customer satisfaction. Customers rate their satisfaction with a product or service on a scale, typically from 1 to 5. CSAT is often used in in-app surveys because it requires very little effort from the customer. The CSAT score is usually calculated by adding together the responses that indicate “satisfied” and “very satisfied.”
- NPS (Net Promoter Score): The Net Promoter Score measures how likely customers are to recommend your company to others. It is currently one of the most widely used customer satisfaction metrics.
The formula is: Net Promoter Score = % Promoters (scores 9–10) − % Detractors (scores 0–6). The result is a single score that provides an indication of the growth potential of your company or product. - CES (Customer Effort Score): The Customer Effort Score measures how much effort a customer had to make to resolve a problem. The idea behind this metric is that reducing customer effort increases loyalty. The easier it is for customers to get help, the less likely they are to switch to a competitor.
What is the best KPI to measure customer satisfaction?
There is no single metric that provides a complete picture of customer satisfaction. No single method captures every factor that influences the customer experience. The best approach is often to combine multiple methods. Over time you will discover which combination works best for your organization.
The most important goal is to translate insights into concrete improvements to your service. Companies that focus strongly on customer loyalty often hire data analysts or work with research agencies that specialize in measuring and analyzing customer satisfaction.
If you are unsure how to approach this, seeking advice from external specialists can be a valuable step.
