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The Metrics of Customer Satisfaction

Measuring customer satisfaction may seem an elusive concept but it is critical to ensure sustained business success. We look at the tools and techniques that capture this behavioural data and turn it into powerful strategic insights.

Customer satisfaction metrics

If you’ve flown from a UK airport recently you’ve very likely taken part in a simple exercise to measure customer satisfaction (C-Sat). After clearing security, passengers pass a console featuring a yellow smiley-face button and a red sad-face button. It invites you to comment on your experience of the departure process. When you press one you’ve taken part in a basic C-Sat survey.

There’s a reason that airports, and most other customer-facing companies do this. It comes down to a simple insight summarised by the management thinker, Peter Drucker: “What gets measured gets improved.”

A picture of performance

The business world is full of metrics but C-Sat is one of the most important. That was the view of Jack Welch, legendary CEO of General Electric. who was voted the greatest manager of the 20th century by Fortune Magazine. He used only three measurements to tell him everything that mattered about his company’s performance: employee engagement, cash flow, and customer satisfaction.

“I would argue that measuring C-Sat is of absolutely critical importance,” says Jo Causon, CEO of the UK Institute of Customer Service. “Financial data tells me where I have been. C-Sat data and employee engagement data will tell me what the future is going to look like.

“Capturing the behaviour, the desires, the wants of that moment in time for those customers is crucial. When you look at data in the boardroom, C-Sat data should be up there with financial data. C-Sat data gives you a rich stream of information that, if acted on, will save you a lot of pain later.”

Causon is also an advocate of the power of anecdotal information, of covering the qualitative side as well as the quantitative side.

“Different measures have different strengths. I like C-Sat because it provides an overview of the entirety of the customer’s experience. I think where you use C-Sat with other measures as part of a balance scorecard, you get a more rounded sense.”  

Measuring C-Sat: the UK Customer Satisfaction Index

The Institute is responsible for producing a national C-Sat measure, the UK Customer Satisfaction Index (UKCSI). This six-monthly online survey covers 13 sectors of the economy and measures current satisfaction as well as trends over time. It gives companies valuable insight into how they compare with the best and worst in their own sector and others.

More than 10,000 individual customers in the UK rate their experience of individual organisations on a scale of 1 – 10. Areas covered include professionalism, quality and efficiency, ease of doing business, timeliness, problem solving and complaint handling. Each organisation receives a score that is the average of all its customers’ satisfaction scores.

C-Sat is the most popular measurement of transaction quality since it focuses on how happy customers were with recent experiences and interactions during the customer journey.

The UKCSI also takes account of the two other main measures of customer experience: the Customer Effort Score (CES) and the Net Promoter Score (NPS).

  1. Net Promoter Score (NPS)
    With the NPS, customers are asked one question: “How likely would you be to recommend us to friends and family?”, which is scored on a scale of 0 – 10. Customers who respond positively with a score of 9 or 10 are called promoters. A score of 7 or 8 is deemed passive while a score of 6 or less marks the customer as a detractor.

    It’s a simple question but the answer gives real insight as it draws on the entirety of the customers’ experience with the company over time and not just the most recent interaction. That makes it a valuable indicator of the customer’s overall satisfaction with the relationship as well as their loyalty.

    NPS can also be combined with a qualitative follow-up question such as “Could you tell us why?” which provides vital feedback for service improvement.

  2.  Customer Effort Score (CES)
    The Customer Effort Score (CES) seeks to determine how much effort was required of the customer to get their desired product or service. It’s scored on a five-point scale with responses ranging from “Very Easy” to “Very Difficult”. CES measures how likely customers are to continue using the service and paying for it.

    This helps organisations to identify and remove the problems that frustrate and annoy their customers. This can be important as research shows that exceeding customer expectations has little positive impact on their loyalty whereas disappointing them has a large negative effect.

Although the C-Sat metric isn’t the only way to measure customer experience, it is widely considered to be one of the most effective. According to Gartner, the global research company, some 75% of the world’s largest 10,000 companies use it compared with around 25% who use NPS. Companies can, and do, conduct their own internal customer satisfaction research. However, Causon points out that there are benefits to seeking an objective, external measurement especially in terms of benchmarking against peers and other sectors.

There is a simple business logic behind this: listening carefully to customers and understanding their likes, frustrations and unmet demands better equips management to build a thriving business.

Although C-Sat isn’t the only way to measure customer experience, it is widely considered to be one of the most effective.

The technology and data challenge

Measuring customer experience requires data but some organisations find it hard to get the data they need to enable decision-making. Others find they are drowning in raw data but can’t process it to give valuable insights. Up to 80% of data captured is never used, according to IBM. However, the digital age has created many new channels that can be used effectively.

Amazon, Spotify and Netflix are all successful pioneers in this area. They provide customers with a personalised service that encourage them to share their digital data. This data is analysed to further enhance the customer experience.

Customers tend to give honest feedback and enjoy being asked their opinions but it’s important to let them do it on their preferred channel (email, text, app). That means an omni-channel approach – in which all channels, from digital and social to telephone and face-to-face, are properly aligned and integrated – is best for feedback and surveys.

The classic maxim from the world of computers is GIGO which stands for garbage in garbage out. In other words, the quality of the input affects the quality of the output. When collecting feedback data on C-Sat it’s important to guard against inaccuracies caused by such factors as poorly considered questions, badly selected customer samples and delays in requesting feedback. The best time to get useful feedback is immediately after the interaction when the experience is fresh in the customer’s mind. Integrating feedback into a customer app or website can help with this.

Human happiness is an elusive concept which seems a world away from the rational number-driven world of metrics. However, as the best companies show, it is possible to use data and metrics to continuously improve the customer journey and the company’s bottom line.

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