Customer satisfaction: definition, importance & measurement

What is customer satisfaction?

Customer satisfaction refers to the level of happiness experienced by customers or users with the products, services, or experiences a business or organization offers. It includes the perception of how well a company meets or exceeds expectations and is often measured through surveys, feedback, and other metrics, allowing businesses to gauge the success of their efforts in meeting customer needs and preferences.

Achieving high levels of customer satisfaction is essential — as there is a direct correlation to increased customer loyalty, repeat purchases, and word-of-mouth referrals. Satisfied customers are more likely to become loyal advocates for a brand, contributing to long-term profitability and sustainable growth. Customer satisfaction plays a crucial role in maintaining a competitive edge in the market, as businesses that consistently deliver exceptional experiences are better positioned to attract and retain customers compared to those that do not.

Why is customer satisfaction important?

Customer satisfaction is a critical metric for nearly any business, brand, or company across most industries — and is often a proof point for success and growth. From increasing customer retention to fostering loyalty and positive promotion, customer satisfaction directly influences business decisions and is a crucial differentiator in today's competitive marketplace.

1. Improves customer retention

Satisfied customers are more likely to continue doing business with a company, reducing churn and increasing the lifetime value of each customer. You can build strong relationships with your base by consistently meeting or exceeding customer expectations, fostering long-term loyalty and support.

2. Fosters customer loyalty and advocacy

Beyond retaining customers, satisfied clients are likelier to become loyal advocates for a brand, product, or service. They are willing to recommend companies to others through word-of-mouth referrals or positive online reviews. This strengthens reputation and attracts new customers — driving organic growth.

3. Business decisions are made easier

When a business prioritizes customer satisfaction, they gain insights into customer preferences, pain points, and areas for improvement. This approach enables you to develop targeted marketing strategies that better resonate with customers. 

4. Customer experience becomes a major differentiator

Customer satisfaction directly influences overall customer experience (CX), shaping perceptions of a brand or business. Those who prioritize customer satisfaction work to deliver exceptional experiences across every touchpoint. Companies gain an edge by consistently exceeding customer expectations and providing personalized experiences.

Why measure customer satisfaction?

By quantifying customer satisfaction levels, companies gain valuable insights into how well they meet or exceed customer expectations and where they may fall short. This data-driven approach allows businesses to identify areas for improvement, prioritize initiatives, and allocate resources correctly to better the overall customer experience.

Measuring customer satisfaction gives businesses tangible metrics to track their progress over time. By establishing benchmarks and setting measurable goals, companies can monitor satisfaction level changes and evaluate the impact of their efforts. This continuous feedback loop enables businesses, companies or brands to adapt their strategies to meet customer needs better, ultimately leading to higher customer loyalty, retention, and advocacy levels.

How to measure customer satisfaction

As discussed, measuring customer satisfaction is critical. By employing various metrics and KPIs, businesses can gain valuable insights into satisfaction levels and identify areas for improvement. Below are different types of metrics used to measure customer satisfaction, as well as information on how best to utilize them to drive success.

Types of metrics to measure customer satisfaction

1. CSAT Score

The Customer Satisfaction (CSAT) Survey  score is a widely used metric that measures the satisfaction level of customers based on their recent interactions with a company's products or services. Typically, it is collected through surveys, and scores are calculated by asking customers to rate their satisfaction on a numerical scale. This offers immediate feedback on specific transactions or touchpoints, allowing you to recognize areas for improvement quickly.

2. NPS

Net Promoter Score (NPS) is a metric for customer loyalty. It is measured by asking customers how likely they are to recommend a company's products or services to others. Customers are typically asked to rate their likelihood of being recommended on a scale from 0 to 10. The NPS is calculated by subtracting the unlikely from the percentage of likely to, resulting in a score that ranges from -100 to 100. 

3. CES

Customer Effort Score (CES) measures the ease of doing business with a company from the customer's perspective. This metric focuses on simplicity and efficiency, particularly during interactions like making a purchase, resolving an issue, and seeking assistance. CES surveys often use a scale of "very easy" to "very difficult."

Bonus: 5 examples of customer satisfaction survey questions

1. How satisfied are you with your recent experience with our product/service?

This question assesses overall satisfaction levels and provides valuable feedback on the customer's recent interaction with the company.

2. On a scale of 1 to 10, how likely are you to recommend our product/service to a friend or colleague?

This Net Promoter Score (NPS) question measures customer loyalty and advocacy, helping businesses gauge their potential for word-of-mouth referrals.

3. Did our product/service meet your expectations? Why or why not?

This open-ended question allows customers to provide specific feedback about expectations, enabling you to identify improvement areas.

4. How would you rate the ease of use of our website/app?

This Customer Effort Score (CES) question evaluates the simplicity and efficiency of the customer experience, particularly in digital interactions.

5. Is there anything else you want to share about your experience with us?

This question allows you to collect additional insights that may not have been captured by other CSAT survey questions.

3 Types of surveys for customer satisfaction measurement

1. Visual and interactive surveys

These surveys often feature interactive sliders, rating scales, and visual prompts that encourage higher response rates. By leveraging visual and interactive elements, businesses, companies, and brands can capture more detailed customer feedback and insights about negative and positive experiences, leading to a deeper understanding of their satisfaction levels and preferences.

2. In-product customer feedback and satisfaction surveys

These surveys typically appear as pop-ups, overlays, or in-app notifications, prompting users to share their thoughts and experiences while they are actively engaging with the product or service. By collecting feedback at the point of interaction, businesses can capture timely and topical insights.

3. Help center satisfaction ratings

These surveys may be emailed after a support interaction, embedded within the help center website, or integrated into live chat support sessions. By requesting feedback directly from your customer base, companies can better evaluate the state of their support efforts.

How to improve customer satisfaction?

1. Evaluate experience gaps using a customer satisfaction model

Identify discrepancies between customer expectations and actual experiences by implementing a structured model to enhance satisfaction levels.

2. Collect and listen to customer feedback

Gather feedback from existing customers through various channels such as surveys and reviews, and actively listen to their suggestions and concerns.

3. Analyzing your customer satisfaction metrics

Regularly assess KPIs like response times and resolution rates to pinpoint improvement areas in your customer’s journey.

4. Offer omnichannel customer engagement

Provide customers with the flexibility to interact across multiple channels like email, phone, and social media for a more integrated experience.

5. Empower customers with self-service

Create opportunities for customers to find solutions independently by offering self-service choices, reducing your dependency on support agents.

6. Improve the speed of service

Streamline workflows to ensure prompt resolution of customer inquiries, increasing overall efficiency.

7. Revisit agent training

Regularly update and adapt customer service training programs to equip them with the skills and knowledge to meet evolving customer needs.

Customer satisfaction best practices

Know your customers and business

Understanding your customers' preferences, needs, and pain points allows for tailored products, services, and support experiences while aligning strategies and resources with business operations to ensure consistent meeting of expectations.

Actively listen to your customers

Engaging with customers through surveys, feedback forms, and direct interactions demonstrates a commitment to addressing their concerns, providing insights for improvement, and making informed decisions to serve them better.

Act on feedback

Acknowledging and promptly addressing customer feedback, whether resolving issues, implementing new features, or making process improvements, demonstrates responsiveness and dedication.

Continually measure progress and act accordingly

Monitoring key performance metrics and customer satisfaction scores allows businesses to identify areas needing improvement, ensuring ongoing satisfaction and loyalty.

Leverage AI/automation

Implementing AI-powered chatbots, self-service portals, and predictive analytics can help improve efficiency, resolve inquiries quickly, and offer tailored experiences.

Customer satisfaction examples: 3 Companies winning by improving their CSAT scores

1. Felix Mobile: Introducing low-friction support channels

Felix Mobile improved its CSAT scores by introducing live chat and self-service options, providing customers with convenient and efficient ways to resolve issues.

2. OneFile: Unifying data spread across systems for visibility

OneFile elevated its CSAT scores by unifying data across systems, offering a comprehensive view of customer interactions and enabling seamless communication and collaboration.

3. Kiewit: Automating customer service for speed

Kiewit enhanced its CSAT scores by automating customer service processes and leveraging AI and automation to follow up on inquiries quickly and efficiently.

How Freshworks can boost your customer satisfaction

As we discussed above, Freshworks’ Freshdesk is a comprehensive customer support software designed to increase customer satisfaction by streamlining support and improving efficiency. It offers a user-friendly interface and powerful features that empower you, your brand, or your business to deliver elevated customer service experiences. 

Freshdesk boosts customer satisfaction through its omnichannel support capabilities, allowing businesses to engage with customers across multiple channels such as email, phone, chat, social media, and more. This ensures customers can reach out through their preferred communication channel, leading to faster response times and increased convenience.

Another key feature of Freshworks’ CSS is its automation capabilities, which help businesses handle repetitive tasks and inquiries more efficiently. By automating routine processes such as ticket assignment, routing, and response generation, CSS enables support staff to focus on more complex issues. This not only reduces response times but also ensures consistency in service delivery, leading to higher customer satisfaction levels.

Freshworks’ Freshdesk offers analytics and reporting tools also provide insights into customer interactions, agent performance, and overall efficiency. By tracking key metrics such as response times, resolution rates, and customer feedback, businesses can identify areas for improvement and make data-driven decisions. With Freshworks’ comprehensive suite of features and customizable solutions, businesses can effectively boost their customer satisfaction levels and build lasting relationships with their customers.