Demystifying Customer Satisfaction Research

Customer is at the core of any business and the way businesses treats their customer is the most influencing factor of success. Businesses need to be at their top of the game so that the customers are engaged and remain loyal to the brand. This includes efforts on everything from product quality to brand image. In this blog, we will look at why customer satisfaction, customer loyalty and NPS is important and ways to measure it most accurately.

What is “Customer Satisfaction” and how to measure it?

Customer satisfaction is primarily a measure of how products or services offered by a company meet or exceed the customers’ expectations. Customer satisfaction is a true reflection on how customers feel about interacting with a brand. It is important to measure customer satisfaction to understand the following

  • Identifying unsatisfied customers – To analyse and act on negative feedback to avoid churn, negative customer reviews etc.
  • Identify satisfied customers
  • Forecast and plan proactively – Customer satisfaction indicators makes it easy for the business to plan its priorities.
  • New lead generation – Marketers could rely on customer testimonials to attract new leads for the business. 
  • Improve customer retention- By measuring customer satisfaction, brands can look at individual customer needs and create personalized offers for those who are likely to churn.

This metric is usually calculated using a customer satisfaction survey that asks on a five or seven-point scale how a customer feels about a support interaction, purchase, or overall customer experience, with answers between “highly unsatisfied” and “highly satisfied” to choose from.

A sample question could be “Based on a scale of 1-5 (1 being Not at all Satisfied and 5 being Totally Satisfied), please let us know your satisfaction with the following

  1. Product Quality
  2. Customer Support

What is “Customer Loyalty” and how to measure it?

A loyal customer is one who choose a particular brand’s product or service over its competitors. This bunch of customers is very important for marketers as they do not have to spend money on customer acquisition more as they are already loyal. Further, When a customer is loyal to one brand, they aren’t easily swapped by price or availability or any other factors.  The customers would rather pay more or search some other place to ensure the pick the same brand for the same quality service and product they already know. Customer loyalty for brands involves consistently meeting and exceeding expectations. Customers that trust the companies they do business with will be more likely to purchase again in the future.

Customer loyalty is important to understand the following:

  • Ways to improve business and increase sales
  • Strengthen the customer relationship 
  • Repeat purchases and reduce churn

This metric is usually calculated using along with customer satisfaction survey that asks on a five or seven-point scale how a customer feels about purchasing a particular product again, with answers between “highly disagree” and “highly agree” to choose from.

A sample questions could be ““Based on a scale of 1-5 (1 being Highly Disagree and 5 being Highly Agree), please let us know your preference. 

  1. I would go and purchase my favorite body soap from another shop if it is not available in my usual shop
  2. I would still purchase my favorite body soap even if the price increases

What is “NPS” and how to measure it?

The Net Promoter Score is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. It is used as a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand. The NPS system developed by Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld are considered to be gold standard in measureing customer experience and predicting business growth

This metric is generally calculated by the question “On a 0-10 scale: How likely is it that you would recommend [brand] to a friend or colleague?”

Respondents are then grouped as follows:

  • Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
  • Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
  • Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).

At Consulsat, we have dedicated customer satisfaction and research specialists who work with brands to improve their customer effectiveness.