What Is CSAT & How Do I Calculate It?

Every business should strive to deliver an excellent customer experience. But how do you know whether you are doing so? CSAT is one common metric for measuring customer satisfaction, and it can give you plenty of important insights.

What Is CSAT?

CSAT stands for customer satisfaction score. This is a very common metric that is used to check the performance of customer service as well as product quality. The metric is expressed as a percentage, with 100% being a perfect score and 0% being an undesirable score.

Are There Other Related Customer Satisfaction Metrics?

You may also come across a few other customer satisfaction metrics worth considering. The Net Promoter Score (NPS) looks at customer loyalty. It is much more specific than the CSAT and typically asks how likely someone is to recommend your company. The Customer Effort Score (CES) measures how hard it is for customers to complete their tasks while working with you. It can provide additional insight into your CSAT data, but it is also a single-question metric. You should also track your customer retention rate (CRR).

Why Your CSAT Score Matters for Your Business

Simply put, your CSAT score lets you gauge whether your customers are satisfied with your products and services as well as your brand as a whole. You can’t make changes if you don’t know something is wrong. And you don’t want to make changes if your customers are happy with the way things are.

You can also use customer satisfaction scores strategically to discover pain points or areas where you excel. For example, you could ask for customer feedback at various parts of the customer journey. If the customer satisfaction score is high until a certain point in the journey, this indicates an issue at that stage of your sales process.

You can also use your CSAT scores to help identify customers that are more likely to churn. Then, you can use this information to address their pain points or focus your advertising efforts on them, reducing churn. Why is that so important? Consider that it can cost 5 to 25 times as much to gain a new customer than it does to retain one.

How to Calculate CSAT

To calculate your customer satisfaction score, you need to survey your customers. You will ask variations of a question, such as “How satisfied are you with the [goods/services] [Company name] provided?” You ask respondents to rate you on a scale of one to five. One is very unsatisfied and five is very satisfied in the CSAT surveys.

Calculating your customer satisfaction score requires you to count how many responses your CSAT survey has in total and how many people rated you at four or five, which are “satisfied” and “very satisfied.”

Take the number of people who rated you at four or five and divide that by the total number of respondents. Multiply it by 100 to get the percentage of satisfied customers.

So, suppose you get 100 responses, including 40 ratings of four and 35 ratings of five. You would divide 75 (40+35) by 100 to get 0.75. Then, you would multiply it by 100 to get 75%. Your CSAT score would be 75%.

What Is a Good CSAT Score?

What qualifies as a good customer satisfaction score varies greatly by industry. You can easily find the average or what’s considered good in your industry online. Overall, a good score will be somewhere between 75% and 85%.

The following are some common goals for various industries:

• Specialty retail stores – 77%
• Internet retail – 77%
• Computer software – 78%
• General merchandise retailers – 75%
• Supermarkets – 76%
• Fast food restaurants – 76%
• Full-service restaurants – 80%

Track Your Score Overtime

While comparing your customer satisfaction score to industry benchmarks can be helpful, it’s better to compare your score with past scores. So, get in the habit of regularly running CSAT surveys.

Pros and Cons of CSAT

Before deciding if you want to use the CSAT, make sure you understand the pros and cons of it.

Pros

One of the biggest advantages of your customer satisfaction score is that it is usually very easy and fast to calculate. This includes ease for your team and for customers. That ease of answering tends to deliver a high response rate.

CSAT scores are also standard measures, making it possible to benchmark your business against others.

If you have a high customer satisfaction score, you can use it in advertising to highlight your customer experience and customer satisfaction.

Cons

There is never a guarantee that your customers will respond to your survey, so you may struggle to calculate an accurate customer satisfaction score. It also relies on self-reporting, which has potential biases.

People who respond to your CSAT survey are more likely to be those who had an extremely positive or extremely negative experience.

Additionally, it is a general rating. As such, you won’t get insight into why your customers were or weren’t satisfied.

Bonus: Tips for Improving the Customer Experience

Now that you understand your customer satisfaction score and how to measure customer satisfaction, how can you improve it? Improving the customer experience will boost customer loyalty and improve your CSAT score. Consider the following tips.

1. Get Customer Feedback

The best source of information about improving the customer experience is customers. They can tell you what parts of the customer journey are going well and where they would like to see changes. They may even suggest changes that can improve their experience and satisfaction.

2. Listen to Employees

You should also listen to what your employees tell you about the customer journey and customer satisfaction. Remember that they are the ones who directly interact with customers, so they are likely to know the pain points. They are also likely to know what customers value most.

If you haven’t thought to ask employees, you are not alone. 93% of businesses don’t talk to employees or HR about creating a customer experience culture. So, just by asking your employees for input, you will already be ahead of 93% of your competition.

3. Think About the Customer Journey

When it comes to improving customer satisfaction and the experience, you want to think about the entire customer journey, not just a single point. This starts early on in the process, including your marketing efforts and the methods of communication you offer to customers. For example, offer the ability to text with your team, as customers prefer texting.

4. Consider Both Real-World and Digital Experiences

As you work to improve the customer experience, consider the experiences both in your physical locations and their experience online. Think about the experience across all of the ways customers communicate with you, from email to text to webchat.

5. Encourage Employees to Deliver Great Customer Experiences

Do what you can to encourage your employees to provide a good customer experience. Consider rewarding employees for positive feedback or rewards. Consider offering incentives for collecting reviews. And give employees the power they need to deliver a good customer experience, such as the ability to resolve issues.

Get Started with Podium

Tracking your customer satisfaction score provides valuable insights, letting you confirm your rate of satisfied customers. Tools like Podium can help you improve customer satisfaction by offering multiple channels of communication that are easy for your team to manage. You can also use Podium to get more feedback via reviews.

Ready to get started? Sign up for a free 14-day trial today.