Customer Satisfaction (CSAT)

Date created: Aug 7, 2020  •   Last updated: Aug 11, 2020

What is Customer Satisfaction?

CSAT is a measure of the level of satisfaction that a customer has with a company’s products and/or services, most often provided by the customer as part of a survey. It is commonly used as an indicator of a customer’s loyalty to a company.

Alternate names: Client Satisfaction

Formula

ƒ (# of responses in each of the top 2 positive response categories / # of valid responses to the CSAT question) x 100

How to calculate

If 20 of your customers answered a CSAT survey question asked on a 5 point labelled scale, and 16 of those said they were either Extremely Satisfied or Very Satisfied; then your CAST score is 16/20*100= 80%

Customer Satisfaction

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What is a good Customer Satisfaction benchmark?

The American Customer Satisfaction Index has been measured since 1994 and is once of the most commonly referenced benchmarks for CSAT, and used as an indicator of overall economic health. It is limited to US consumers, but still serves as a reference point for global companies. Like many perception-based metrics, external benchmarks for this metric are generally unreliable as a ‘hard target,’ as companies ask slightly different survey questions and use different scales.

More about this metric

CSAT is a measure of the level of satisfaction that a customer has with a company’s products and/or services. It is most often collected through a customer survey, along with other measures that assess the customer experience, attitudes, and expected behaviours. 

CSAT is often used as an indicator of a customer’s loyalty to a company, however, it can be applied in more targeted ways. While a measure such as NPS (Net Promoter Score) is designed to provide a ‘total company’ evaluation (ie, a holistic opinion of likelihood to recommend the company overall), CSAT can be used to evaluate individual products and/or service experiences (ie, satisfaction with Product X, satisfaction with onboarding for Product Y, satisfaction with customer support, or even satisfaction with your most recent customer support experience).  The application of CSAT at a granular level means it can be used to evaluate and generate trackable metrics across the business, and to target new or ‘high impact’ products or service areas that could benefit most from direct and potentially frequent customer input.

Users of the CSAT metric should also be careful about too tightly associating ‘satisfaction’ with ‘loyalty.’  Customers may be satisfied with products or services, but that satisfaction does not necessarily translate to repeat purchases, advocacy, or other behavioural elements of loyalty.  Satisfaction is a relatively low bar for a company to achieve.  Some of this can be addressed in the survey design, primarily through the scale choice.

At an aggregate level, CSAT is an indicator that is reviewed by executives and/or product and functional leaders to provide a forward-looking view of potential revenue risk and to identify opportunities for systemic improvements to customer experiences.  At a customer level, it is an indicator reviewed by account managers and/or customer success leads to identify and improve on pain points as they work to protect revenue.  

As companies build time-series data for this metric, it should be aligned with operational and financial metrics for the relevant product and/or service area, to create a holistic view of overall performance.

When to use it Use it when you need to measure specific products or service experiences (ie, onboarding, customer support, new product usage). 

How to gather it This metric is most often gathered through a regular voice of customer survey.  

If it is focused on a specific experience, surveys should be triggered by completion of that experience, and survey content limited to questions relevant to that particular experience. 

Keep the question simple, and provide clear response options.  I recommend a 5-point labelled scale, which has been proven to have less variation in the interpretation of responses (see example, below).  You may prefer a 7-point Likert scale (a range from 1 to 7 where 7 is the most satisfied), or for a more binary view, reword the question to elicit a Yes/No answer.  Best practice is to ensure the scale you use aligns with other scaling in your survey - this makes it easier for customers to respond, and easier for employees to interpret results.

Sample survey questions How satisfied are you with <PRODUCT NAME>? (ie: How satisfied are you with your most recent experience with our customer support centre?)

- Extremely Satisfied - Very Satisfied - Somewhat Satisfied - Not Very Satisfied - Not At All Satisfied - Decline to Answer

Recommended resources related to Customer Satisfaction

The American Customer Satisfaction IndexDeep dive on CSAT by Martin Powton