What Is Customer Satisfaction and Why Is It Important?

There’s a reason companies constantly emphasize the importance of excellent service. Customer satisfaction is an important metric that indicates how likely someone is to return to the business in the future.

So, how can companies keep customers happy in ways that boost retention rates and maintain positive growth? This guide provides a deeper understanding of customer satisfaction, highlighting the benefits of positive customer relationships and how to cultivate them.

Defining Customer Satisfaction

If you ask 20 different companies, “What is customer satisfaction?” you’d probably get 20 different answers. At the most basic level, it’s an overall measure of how well a business delivers products and services that meet a customer’s needs. In addition, the things that satisfy business customers will vary versus trying to appeal to consumers.

Key Elements

What can organizations do to consistently generate fantastic customer experiences? Let’s start by answering a few essential questions.

What are the 5 basic levels of customer satisfaction?

• Quality: How customers perceive the quality of a product or service is a critical element of customer satisfaction. Business and commercial customers are more likely to return if their needs are met or exceeded. 

• Expectations: Most people come in with preconceived notions about what to expect based on factors like past experiences, advertisements seen in the media, and word-of-mouth from someone they trust. 

• Value: Customers expect that what they receive is worth the price. Businesses must balance delivering a quality product at the set price point without making customers feel cheated. 

• Customer Service: Customers want a seamless experience when they make a purchase. When something goes wrong, they want to see that companies are willing to go above and beyond to make things right. 

• Trust: Delivering on promises consistently helps companies establish trust with customers. 

What are some key goals for customer satisfaction?

In addition to the above, organizations must deliver on the following regarding the customer journey. 

• Forge emotional connection: Making each customer interaction positive and memorable leads to stronger loyalty and a willingness to advocate for a brand. This is true for both business clients and consumers.

• Create feedback mechanisms: Give customers a quick and easy way to provide feedback about their interactions, such as through social media. 

• Proactive communication: Provide customers with timely information regarding orders, issues affecting their purchases, and new products or services. Companies can get a head start on securing new business with customers nearing the end of their contracts.

What is a customer satisfaction index?

The CSI metric, or customer satisfaction index, quantifies customer satisfaction with a company’s products, services, or overall experience. It aggregates survey responses and ranks them on a numerical scale.

Customer Expectations vs. Reality

Ultimately, customer satisfaction depends on how well customer expectations align with the reality of their experience. If a customer chooses to have dinner at a high-end restaurant, they are looking for better food, presentation, and overall atmosphere. If they don't receive better service than that given at a family chain, that will lead to greater disappointment.

Measuring Customer Satisfaction

Let’s look at two key metrics used to measure customer satisfaction.

Customer Satisfaction Score (CSAT)

The CSAT measures the degree to which customers feel satisfied with a company’s products or services. Companies typically get this measurement by sending a customer satisfaction survey after an interaction.

So, what is a good customer satisfaction score? Well, the answer varies. Businesses often benchmark scores against industry standards or those received by competitors, so be sure to do some research to find out what scores you're up against.

Net Promoter Score (NPS)

NPS measures levels of customer loyalty and satisfaction. Customers answer questions like, “On a scale of 0 to 10, how likely are you to recommend our product to someone else?”

The range of scores typically gets categorized like this:

• 0-6: Unhappy customers who are unlikely to return and may spread negative word of mouth.

• 7-8: These customers had positive experiences but did not come away enthused enough to promote the company. 

• 9-10: These customers were highly satisfied and likely to repeat purchases or tell others about the products or services offered.

Strategies to Improve Customer Satisfaction

Let’s look at some ways companies can boost their customer satisfaction scores. 

Understanding Customer Needs and Expectations

Businesses can send out customer surveys, set up focus groups, or conduct one-on-one interviews online or in person. Ideally, companies should prepare a list of open-ended questions to guide discussions. Data tools are available for monitoring social media platforms for customer feedback. 

Companies can also measure ticket deflection rates to see how easy it is for customers to resolve issues independently. For business clients, consider arranging a sit-down with key personnel to review what works and ways to improve regarding services delivered.

Implementing Customer Feedback

In addition to leveraging technology to collect online feedback, businesses should look for automation platforms capable of analyzing customer data for key insights. They can transform that into actionable items like short-term implementations (the next 3 to 6 months) and long-term changes (over 1 to 2 years). For example, a company might set a goal to reduce support tickets over the upcoming quarter.

How Businesses Maintain High Customer Satisfaction

Consistently meeting service, or product quality standards is the quickest way to keep customers happy. Companies should also strive to exceed the terms of SLAs set up with business customers. People also respond positively to companies that stay proactive about making improvements and responding to customer feedback.

Providing exemplary customer service and user-friendly processes (returns, customer support) can also boost scoring. Some companies are using tools that help improve customer satisfaction with gen AI.

Improve Your Customer Satisfaction Practices

AptEdge helps companies streamline customer support. Sign up for a demo to see for yourself how our platform can boost customer retention and customer satisfaction rates.