What is customer satisfaction and why is it important

Customer satisfaction (CSAT) is a metric that can provide key insights about whether your product meets or exceeds customer expectations. By increasing customer satisfaction, businesses can help foster brand loyalty and trust. The drivers for customer satisfaction may vary across different industries. This is as a company’s product will likely have to tap into employee desires and needs specific to what the business is selling.

Different CSAT tools

There’s not just one way to measure customer satisfaction. Businesses can measure it using a range of different tools. These include:

• CSAT surveys
• Net Promoter Score (NPS) surveys
• Quantitative customer satisfaction metrics
• Customer service feedback forms

The above tools can provide both quantitative and qualitative data on customer satisfaction. Businesses can make their customer feedback analysis more efficient by investing in customer feedback software. This can help companies to collect and manage customer feedback, as well as to provide analytic tools to help make sense of the data. 

Quantitative vs qualitative customer satisfaction data

Customer satisfaction feedback can be considered either quantitative or qualitative data. In this next section, we’ll look at the different uses of each. 

Qualitative data

Qualitative data is categorical. It helps you gain a better understanding of reasons, motivations, thoughts, desires and feelings behind certain decisions and behaviours. Qualitative customer satisfaction feedback can be anecdotal feedback that describes what works best about a product, or the faults with a product. This can be useful in helping to gain an understanding of what is working about a product and why. 

Qualitative data opens up a conversation about your company’s branding, values, services and products. However, it can be important to consider bias in feedback, as well as moderate discussions carefully. Some examples of qualitative data include:

• Gender
• Religion
• Hair colour
• Marital status
• Method of approach
• Strategy used.

To gain insights into qualitative data, a researcher usually separates qualitative responses from a dataset into different categories. These categories are then divided by how similar the sentiment is. 

Quantitative data

Quantitative data can be represented by a numerical figure. Data from these surveys can also be quantified into factual statements and statistical results.

This type of customer feedback is usually provided in the form of a rating or score. Usually, quantitative research involves a larger sample size, which can lead to reduced bias and more impartiality. However, unlike qualitative data, businesses cannot get deeper insights into what their customers think and what makes them tick. Examples of quantitative data include:

• Age
• Weight
• Currency
• Conversion rates
• Sales data
• Number of transactions.

How can businesses manage customer satisfaction

Customer satisfaction is often grounded in a business’s ability to respond to their needs. This also includes other factors such as smooth customer journey, ease of use of their website and more.

Using market research to identify key customer needs can also be a great strategy. It can help you identify whether customers feel like they’re getting value for money, whether the product meets their needs, whether their shopping experience was optimum and more.

When employer branding improves customer experience (CX)

A strong employer brand helps businesses to source quality candidates for job openings, which has second order benefits to company reputation. In turn, the employer brand drives better customer experience and increased business revenue. We found that: ‘Most surveyed decision-makers see better CX and improved company reputation as a benefit of a strong employer brand’. 

The study also reveals that business decision-makers expect a 47% increase in client satisfaction when they have a strong employer brand, plus a 45% increase in the business’s revenue. This suggests a strong case for considering employer branding as part of a customer satisfaction strategy. 

Challenges for customer satisfaction 

The challenges of managing customer satisfaction are numerous and are likely to rise in the coming years. It may be up to businesses to adapt to these changes by understanding the needs that their customers have. In this next section, we’ll look at some of the ways businesses can mitigate these.

High cost-of-living

A booster for customer satisfaction can be meeting a customer’s value for money expectations. The UK’s cost of living may be affecting customer satisfaction levels. This may especially be the case in high cost of living areas. Cost of living is the overall cost of day-to-day living expenses that someone has to budget for. This includes rent, tax, energy bills, travel costs, food, entertainment and more. 

By responding to high cost of living levels by demonstrating a commitment to value for money, businesses may be able to win over customer loyalty and trust. Other ways businesses can help boost customer satisfaction during a cost of living crisis include:

• Creating loyalty schemes;
• Offering cashback rewards;
• Offering customers the option to pay in instalments;
• Avoiding price rises unless necessary and using careful competitor research before implementing them.

Managing consumer trust

With so many options on the market, customers have a lot of options to chose from. They’ll be weighing up the pros and cons of each option using their own research and customer reviews. One way that businesses may be able to achieve this is by bolstering consumer trust. This can be through responding to their needs in a way that meets or exceeds expectations.

Transparency around ethics and sustainability

It can also mean increasing transparency around company ethics, supply chain sourcing and commitments to sustainability. According to our guide to making a business sustainable, customers are becoming increasingly conscious of what’s known as ‘greenwashing’.

Customers in the UK feel like there should be strong repercussions for businesses that say that they use green practices but don’t take concrete actions to put this into place. We also found that greenwashing may cost more time and money than genuine sustainable practices. Businesses that are transparent about their sustainability practices, as well as take concrete action towards net-zero, may gain more consumer loyalty and satisfaction.

Moderating brand image and conversations

Content moderation is another way that businesses can help maintain a brand image that satisfies your customers. That’s because reviews are an important way to generate a positive reputation in competitive markets. Online customer reviews in particular is becoming a popular mean to gauge general sentiment about a product.

Businesses may be able to tap into this reputation booster by encouraging customers to review their products after they have purchased them. They could also ask influencers in their market to review promotional items on their social media channels.

Analysing customer satisfaction helps generate a positive reputation for businesses. By assessing your customer wants and needs, you can tailor products designed to meet their requirements. It may also be useful to look into some contemporary challenges to customer satisfaction such as consumer trust, high cost-of-living and moderating brand image.