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Customer Satisfaction (CSAT)

Customer Satisfaction (CSAT) Formula

\noindent To compute CSAT, simply take the percentage of satisfied responses. For a scale from 1 to 5, with 5 being "Very Satisfied", we have the formula: $$\large{\frac{\text{Number of 4s} + \text{Number of 5s}}{\text{Total Surveyed}} \times 100} \rightarrow \text{percent} $$

Customer satisfaction (CSAT) is the critical KPI that measures the satisfaction of a business's customers. Unlike NPS which measures a customer's overall experience, satisfaction can be used to measure the experience of specific engagements, for example an individual ticket. Of course, the entire customer journey will also affect the CSAT for any individual interaction.

What Is Customer Satisfaction?

CSAT is a survey-based metric demonstrating how well a company's products and services meet customer expectations.

Why Is CSAT Important?

Higher customer satisfaction leads to better customer retention and repeat transactions with a business. This directly translates to additional spend and business revenue. CSAT is especially important for higher lifetime value (LTV) customers.

How to Measure CSAT?

A typical customer satisfaction survey asks customers to rate how satisfied they are with a good or service on a scale from 1 to 5, with 1 being very dissatisfied, and 5 being very satisfied. This can also be extended to a scale of 1 to 7 (extremely dissatisfed/satisfied).

How to measure Customer Satisfaction (CSAT)

Then, take the number of satisfied customers (in the case of a 1 to 5 scale, these would be customers who provided a rating of 4 or 5) and convert to a percentage of all responses.

What is a Good CSAT Score?

Customer satisfaction varies significantly by industry, but according to HubSpot, a good CSAT score is in the range of 75% to 85%.

ASCI provides a more detailed breakdown.

How to Improve Customer Satisfaction

Like with many KPIs, there is no simple answer. However, here are some potential ways to improve CSAT and the overall customer experience:

  • Make sure to ask for customer feedback and act on that feedback
  • Ensure convenience and speediness
  • Respond quickly (AHT and FRT are useful to measure here)
  • Show empathy in your interactions
  • Incentivize your customer service agents to meet and exceed CSAT SLAs
  • Use an omnichannel approach (which will also reduce CES)
  • Make customer satisfaction one of the focal points of your business by making it part of a key dashboard

Businesses are held to higher standards than ever, and collecting satisfaction surveys and associated feedback can help ensure your business meets those standards.