What is customer satisfaction, and why is it important for businesses to make it a key focus area? In this article, we answer these questions and more, helping you to effectively measure, manage and improve satisfaction.

Think about the best—and the worst—experiences you’ve had as a customer. When you’ve been happy with a purchase and when you haven’t. The times when your expectations have been met, and the occasions where a business has let you down. Experiences like these shape your opinion of, and feelings towards, a company. They influence your decision use a service or buy a product again, or recommend the business to friends. This is what we mean by customer satisfaction, and it’s the cornerstone of businesses across the world.

Why customer satisfaction matters

In a nutshell, customer satisfaction refers to how your customers feel about the experiences they have with your company. There are many different factors that can impact these experiences, including:

  • Perceived quality of products or services
  • Perceived value of a product or service
  • Customer service and complaint management
  • Convenience
  • Communication

Compared to even just a few decades ago, customers today are far more savvy when it comes to doing business. From higher quality goods and increased choice to the ability to research products and services online, the balance of power between customers and businesses is changing. Now, the customer is king and keeping them happy is essential to a company’s success.

With the cost of acquiring a new customer five to 25 times times more expensive than retaining an existing one, businesses are also realising that it’s just as important to focus on retention as it is acquisition. As a result of this shift in focus, brands are attempting to build long-term relationships with their customers, and an integral part of this is understanding and maintaining satisfaction.

The benefits of having satisfied customers

1. Satisfied customers are loyal customers

Loyal customers are good for business. Companies with high customer loyalty tend to reap the benefits in the form of increased profits, improved sales, and sustainable business growth.

According to research by InMoment, 60% of loyal customers will make more frequent purchases with a company, with this figure rising to 70% among millennials.

2. Higher retention rates

Higher customer satisfaction and loyalty can also lead to improved retention rates. This incentivises brands to pay more attention to keeping their customers happy because churn is often bad for business, potentially leading to loss of revenue and stifled growth. Furthermore, research by Bain & Company shows that a 5% increase in customer retention correlates with a 25%+ increase in profit.


Read our ultimate guide to customer churn


3. They become advocates of your brand

Happy customers can be a very effective marketing tool, spreading positive word-of-mouth on your behalf. You’ve likely seen evidence of this in your own personal life, with friends and family recommending companies they like and have had positive experiences with. In fact, 81% people in a study said that they trust their friends and family’s advice over advice from a business.

This is good news for your business because it means that your happy customers are potentially attracting brand new ones. A simultaneous win for retention and acquisition!

How to measure customer satisfaction using customer surveys

In order to truly understand, manage, and improve levels of customer satisfaction with your business, you need to begin by measuring it. Every single one of us has been a customer, so we instinctively know what it takes to increase satisfaction— right? Not necessarily. Research has shown that businesses don’t always know what’s best for their customers or where opportunities lie, so it’s always best to go straight to the source for the most accurate information.

With this in mind, the best way to investigate customer satisfaction is to learn from your customers themselves. With the help of customer satisfaction surveys, you will have a means of gathering accurate, actionable insights that will help you understand what you’re doing well, and how you can improve their experiences.

Three of the most common customer satisfaction metrics to include in your CS feedback strategy are the Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), and Customer Effort Score (CES).

Customer Satisfaction Score (CSAT)

The CSAT is a key performance indicator used to measure how satisfied customers are with your business. It offers a simple but effective way of tracking, and providing an overview of, your performance. CSAT can be used at specific touch points along the customer journey or with your business as a whole, and it can be part of a larger customer satisfaction survey or used alone.

How to calculate your customer satisfaction score (CSAT)

Read our guide to the Customer Satisfaction Score


You can calculate your CSAT in a couple of different ways, but the most common is to identify the percentage of satisfied customers your business has. The higher the percentage, the more satisfied your customers are.

By tracking your CSAT at regular intervals, you can easily identify how levels of customer satisfaction are changing over time and what factors may correlate with significant changes. Regular tracking will also empower you to take action to improve your score when necessary.

Net Promoter Score (NPS)

As we’ve already established, loyalty is closely linked to satisfaction, and the Net Promoter Score is the go-to metric for establishing how loyal your customers are.

The NPS is based on a single question: How likely are you to recommend our company to your friends of colleagues? Responses to the question are given along a scale from 0-Very unlikely to 10-Very likely. Respondents are then divided into three categories: Promoters (9-10), Passives (7-8), and Detractors (0-6).

The Net Promoter Score is also the perfect metric for benchmarking your performance. The simple nature of the NPS makes it perfect for tracking your own performance or comparing it with that of other organisations.

Customer Effort Score (CES)

Have you ever had an interaction with a company that just seemed a bit… high effort? Perhaps it took too many steps to make a purchase, or it was impossible to track down a phone number for their customer service. This is exactly what the CES metric was designed to track: how easy (or hard) it is for customers to interact with your business. The CES survey question is typically sent to customers quite soon after a particular interaction. You can read more about the Customer Effort Score here.

4 tips on how to improve customer satisfaction

1. Map the customer journey at your company

When we talk about the customer journey, we’re referring to all of the interactions that a customer has with your business. This includes all touch points with your business, such as making a website purchase through to calling customer service.

You can’t successfully measure, manage or improve an experience that you haven’t taken the time to understand, which is why journey mapping is so important. Once you’ve done this, you can be sure that you are measuring and managing customer satisfaction at critical points in the journey. This allows you to prepare a much more affective and targeted customer experience feedback strategy.

2. Work on providing excellent customer service

Research by Microsoft found that 58% of consumers would sever ties with a company due to poor customer service, and a study by Gallup shows that ‘better is greater than faster’ when it comes to service. HubSpot also report that 93% of customers are likely to make repeat purchases with a company that offers excellent customer service.

Ultimately, the quality of customer service has a significant impact on satisfaction levels. This suggests that it should be a key focus area for companies that are seeking to maintain or boost levels of customer satisfaction.

3. Ask for feedback using customer surveys— and then act on it

The best way to understand how you can make customers happy is to ask them. Of course, any good feedback project should begin with a set of clear objectives and detailed plan of action. In the case of customer satisfaction, this will involve understanding where you need to measure satisfaction and what you’re going to do with the data you collect.

4. Keep up with your competition

In our increasingly global marketplace, the competition for customers is fierce. Research by McKinsey & Company shows that consumers are now switching brands at unprecedented rates, with 36% of survey respondents saying they had tried a different brand since the onset of COVID-19.


Read Market research: The cornerstone of successful businesses


With this in mind, it’s becoming increasingly essential for businesses to be able to outsmart their competition. Market research is an excellent way of beginning to do this, as it allows you to familiarise yourself with the strengths of your competitors and understand the needs of the market. If you can continue to satisfyto wowyour customers, they’re far less likely to be tempted by competitors.


Ready to start conducting your own customer satisfaction surveys?

Netigate provides you with the tools you need to listen to your customers at all touch points along the customer journey. Churn, NPS, customer service and annual satisfaction surveys are just a few examples of the solutions we offer.