Customer Satisfaction Score
Understand component drivers of your customer satisfaction by measuring key processes in your business.
Photo by Ahmed Zayan on Unsplash
What is Customer Satisfaction Score (CSAT)?
The Customer Satisfaction Score (CSAT) is a metric that measures a customer's happiness with a specific product, service, or interaction. When a company sells products or services, you may also measure a customer’s happiness relative to their overall perception of product quality as measured by a Product Quality Score (PQUAL).
Why Customer Satisfaction Score (CSAT) important?
We all know that happy customers are the bedrock of a healthy business. They come back, they spend more, and they tell their friends about you. But how do you know if your customers are actually happy? Guessing isn't a strategy. That's why it's critical to measure customer satisfaction directly.
When you have concrete data, you can stop guessing and start making informed decisions that directly impact customer retention, loyalty, and your bottom line. One of the most direct and popular ways to get an immediate pulse on customer happiness is the Customer Satisfaction Score (CSAT).
How do you measure Customer Satisfaction Score (CSAT)?
The response is collected on a numbered scale, most commonly 1 to 5, with choices such as:
CSAT asks a question about the customer's satisfaction relative to a specific interaction, purchase or experience.
These metrics are typically captured using simple customer satisfaction surveys that ask a direct question, such as:
- "How satisfied are you with the quality of the final [product/service]?
- "How satisfied are you with our level of customer service?"
Typically, measured using a 5 point scale, which choices such as:
- Very Unsatisfied
- Unsatisfied
- Neutral
- Satisfied
- Very Satisfied
Paired with an open-ended question to qualify the respondents answer, more details can be captured regarding why the customer answered as they did. This insight can be valuable in building continuous improvement plans.
How is Customer Satisfaction Score (CSAT) calculated?
Customer Satisfaction (CSAT) and Product Quality (PQUAL) are measured on a scale of 0 to 100, and is calculated by dividing the number of respondents who were satisfied, customers who gave you a rating of 4 (Satisfied) or 5 (Very Satisfied), and dividing it by the total number of respondents.
Here is the formula for how to calculate customer satisfaction:
CSAT Score = (Number of '4' and '5' responses) / (Total number of responses) x 100
Let's use a simple example:
Imagine you sent a CSAT survey and received 200 total responses as follows.
- 70 people responded with a "5" (Very Satisfied)
- 90 people responded with a "4" (Satisfied)
- 20 people responded with a "3" (Neutral)
- 15 people responded with a "2" (Unsatisfied)
- 5 people responded with a "1" (Very Unsatisfied)
First, add up your satisfied customers:
70 (5s) + 90 (4s) = 160 satisfied customers
Now, plug that into the formula:
(160 satisfied customers / 200 total responses) x 100 = 80%
Your CSAT score is 80%.
CSAT Examples:
100 respondents where 10 answered Very Satisfied, and 5 answered Satisfied
CSAT = 15 / 100
320 respondents where 178 answered Very Satisfied, and 15 answered Satisfied
CSAT = 193 / 320
1,500 respondents where 1,300 answered Very Satisfied, and 50 answered Satisfied
CSAT = 1,350 / 1,500
What is a good Customer Satisfaction Score (CSAT)?
Just like in academics, measuring your CSAT is just like letter grades. The scale starts at 0% and goes up to 100%. The higher the CSAT the more satisfied are your customers.
Any CSAT below 50 is poor, and means there is work to be done to improve satisfaction levels. 50 is a failing grade in school, and something to take note of when it is your CSAT. It's difficult to stay in business with a high percent of customers feeling unsatisfied.
Like all CX metrics, your goal is not a perfect 100. The goal is continuous improvement, until you can find your business operating in a steady-state range that is sufficiently high.
If you've never measured key processes before, don't be surprised if the results are not what you expected. Listen and improve, driving CSAT north of 50. Then, keep improving to shoot for that A grade, getting over 90% CSAT.
Poor (50 and below)
Ok (50 to 70)
Good (70 to 90)
Great (90 to 100)
CSAT and NPS®
Measuring customer satisfaction (and product quality) captures how the customer feels now or in the past. Therefore, CSAT and PQUAL are “lagging indicators”. They tell you typically how the customer ‘felt’ about their experience. In contrast, Net Promoter Score is a “leading indicator” that measures the likelihood of how a customer will behave in the future, asking:
- “How likely is that you would recommend {COMPANY} to a friend or colleague (or family member)?
This is why you typically see surveys ask both a satisfaction and NPS question, to capture both past and future indicators. You can read more about Net Promoter Score (NPS) here.
Automating CSAT
Like most business processes, the more automated the better. Using triggers and automations to generate lists or flows of the customers exiting your key processes (e.g. purchase, ticket, quote, shipment) will allow you to more easily engage and gather satisfaction feedback. Using a CXM (Customer Experience Management) platform, like LoyaltyLoop, will ensure the right customers are engaged at the right time.