How to Accurately Measure Customer Satisfaction and Loyalty

An organization's success depends on delivering quality products and services that lead to high customer satisfaction. Simple.

But customer satisfaction isn't a rigid metric. Expectations change and so does delivery. And a recent Gallup survey confirms eroding customer satisfaction for two key reasons. Employees report that customers are more demanding and expect higher levels of service and at the same time, only 23% of those employees strongly believe that their employer is delivering on promises to customers. That's why it's so important to regularly measure customer satisfaction. 

When customers aren't happy with you and your organization, damage can happen quickly. Worldwide, businesses lose an estimated $3.7 trillion each year due to bad customer experiences, according to Qualtrics. 
 

What is “customer satisfaction” really?

To start with, every organization can define customer satisfaction differently, so your first step is to define it for your company. What does success look like to you? Do you want to shoot for customers who mostly get what they expect and don't complain? Or, be the go-to organization that always goes above and beyond for your customers. 

Customer satisfaction is probably best understood in terms of customer experience. The customer experience (or CX) is the sum of a customer's feelings and interactions with your company. If the interactions, products, and services have been mostly positive, then generally, we consider the customer satisfied.

However, true customer satisfaction is a composite of many things and will often change over time. Furthermore, today's customer often changes whom they buy from after just one bad experience. Thus, it's important to continually measure customer satisfaction using a range of metrics that capture its different sides.
 

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To know how satisfied and loyal your customer is, you must ask them

To really know how your customer feels and create actionable items to maintain their satisfaction, you need to survey them as quickly as possible right after they've bought or used your product or service. Luckily, there are different ways you can do this, such as:

• In-app surveys
• Online surveys
• In-store surveys
• Feedback forms
• Offline surveys over the phone or SMS.

By incorporating contact center technology with a feedback tool, you can record surveys that ask customers to rate your services. But always remember that they are busy just like you are so don't waste their time. Your surveys should be crisp and specific. If necessary, offer them an incentive to fill out the survey.

A useful survey will measure the following metrics:
 

1. Overall Satisfaction Measure (Attitudinal)

The sample question could be: Overall, how satisfied are you with "XYZ Company"?

A question like this seems general, but it often reflects the customer's overall opinion of the experience with using your product or service. The most effective predictors of satisfaction are the customer experiences that result in them attributing quality to your organization. 

We measure perceived quality in one of three contexts:

• Overall quality
• Perceived reliability
• The extent of customer's needs fulfilled

Customer dissatisfaction is synonymous with regret over a purchase or anger with the experience. Conversely, we link satisfaction to positive ideas such as "it was an excellent choice" or "I am glad that I bought it."
 

2. Loyalty Measurement (Affective, Behavioral) and the NPS

How can you move your company from just being one that provides good service to be the one your customers recommend to friends and associates? This happens when your customer isn't sure how long you'll be able to satisfy them. To put a value on this, you'll use the Net Promoter Score (NPS). The NPS measures the probability of a customer referring your business to someone.

The NPS doesn't measure short-term feelings towards your business because that can be fleeting. It measures how likely your customer is to refer your company to a colleague or friend.

So, a sample question would probably look like this: Will you recommend us to others?

• 0–6 (Not on your life) - This customer is now one of your detractors
• 7–8 (Maybe, but not totally sure)
• 9–10 (I would) - This company has become a brand advocate for you

To calculate your NPS, subtract the percentage of detractors from the percentage of advocates.

A high NPS shows that you're creating a powerful sense of loyalty among your customers for your brand. Meanwhile, a low NPS shows you have much work to do because your customers don't believe you're consistent enough to keep them happy.
 

3. Affective and Cognitive Satisfaction Measurements

Sample question #1: How satisfied are you with the speed of delivery of your order with XYZ Company?

Follow-up question #2: How important is the speed of delivery in selecting XYZ Company?

Affect (liking/disliking) is measured best through product attributes or benefits. The perceived quality of your products and service attributes influences customer satisfaction. Therefore, you'll have to define and develop measures for each attribute that is important for customer satisfaction.

Consumer attitudes toward a product developed because of product information or any experience with the product, whether perceived or real.

Cognition refers to the customer's judgment. Either the product or service was useful or not. It fit the situation, or it didn't. It exceeded the requirements for the situation, or it didn't. And finally, it was an essential part of the experience with the product, or it wasn't.

Affect and satisfaction are closely related concepts. The distinction is that satisfaction is "post-experience" and is the emotional effect of the product's quality or value.
 

4. Intentions to Repurchase Measurements (Behavioral Measures)

Example question: Do you intend to buy (a product or service) from the XYZ Company again in the next 30 days?

When wording questions about hypothetical future behavior, consumers often say that "purchasing this product would be an excellent choice" or "I would be glad to purchase this product." Behavioral measures also reflect the consumer's experience with customer service representatives. 
 

5. Monitor Social Media

Today's customers overwhelmingly use social media to complain about services and products, bypassing your customer service department. They discuss their experiences online with influencers. Suddenly, the world has a one-sided view of your products and services.

With the potential of social media to go global in a matter of hours, you must watch your brand over social media continually. For many companies, checking Facebook and Twitter are a must. For others, it is equally essential to monitor forums and websites such as Quora, Yelp, and Reddit. Luckily, there are lots of monitoring tools you can use to do this, and a typical result might look something like this: 

• Positive Feelings - 45%
• Negative Feelings - 20%
• Neutral Feelings - 35%

Such results explain where you are going wrong in terms of customer satisfaction. The higher the positive/negative sentiment ratios, the higher are the chances of incredible customer satisfaction. 

User satisfaction plays a key role in creating long-term relationships with people and having them come back to your business after the first purchase or contact. Not only does it influence your current customers and their retention but it’s the key to having more people choose you over the competition.

Measuring customer satisfaction is indeed a good practice for your business to name the loyal and satisfied customers of your business. It also helps you to stay at the top of your business by bringing profits and insures you run things smoothly hassle-free.