Customer satisfaction score – an introduction
Customer satisfaction score (CSAT) is a key metric used by e-commerce businesses to measure the level of customer satisfaction with their products, services and overall experience. CSAT is a critical factor in determining the success of a business and its ability to retain customers and attract new ones.
What is customer satisfaction score?
CSAT is a measure of how satisfied customers are with a company's products or services. It’s typically expressed as a percentage, with a score of 100% indicating total satisfaction. The score is based on customer feedback and can be collected through various methods such as surveys, online feedback forms and social media. The score can also be expressed as a satisfaction rating between 1 and 5, with 5 being very satisfied.
Many e-commerce businesses use an app such as Gorgias to track this metric.
Why is customer satisfaction score so important?
Customer satisfaction is essential for a business to maintain its reputation and attract new customers. A high CSAT score indicates that customers are happy with the company's products or services. This can lead to increased customer loyalty, repeat business, and positive word-of-mouth recommendations. On the other hand, a low CSAT score indicates that customers aren’t satisfied, which can result in loss of business, negative publicity and decreased customer loyalty.
As an alternative to CSAT, a business may use net promoter score (NPS), which you can read about here. NPS measures customer loyalty by asking customers how likely they are to recommend a company’s products or services to others.
Complementary (lagging) metrics that can be used alongside CSAT include customer retention rate and lifetime value (LTV).
What is a good customer satisfaction score?
A good CSAT score varies depending on the industry and type of business, but generally, a score above 80% is considered excellent. A score between 70-80% is considered good, while a score below 70% may indicate that improvements are needed.
It's important for an e-commerce business to regularly monitor and analyse their CSAT and compare it to relevant benchmarks. This will help continuously improve customer satisfaction and maintain a competitive edge.
What does Customer satisfaction score look like?
How do you calculate customer satisfaction score?
Customer satisfaction score = Number of satisfied customers (4s and 5s) / Total respondents x 100
The result is expressed as a %.
Customer satisfaction score worked example
If a company has 100 customers that provide feedback, and 80 of them indicate they are satisfied (scored 4 or 5), the CSAT score would be 80%, calculated like this:
Customer satisfaction score = (80 / 100) x 100 = 80%
Customer satisfaction score (CSAT) is a leading indicator for businesses to measure customer satisfaction and evaluate the success of their products, services and overall experience. A high CSAT score can lead to increased customer loyalty, repeat business and positive word-of-mouth recommendations, while a low score may indicate the need for improvements. Businesses should aim for a CSAT score above 80% and continuously monitor and improve their score to maintain customer satisfaction and success.