Market Research

How To Measure Customer Satisfaction

By 26/06/2019 July 9th, 2019 No Comments

A decade or two ago, customer satisfaction was seen as a nice-to-have, not as a must-have. These days, however, companies are increasingly understanding the importance of building a customer-centric culture, and putting their customers at the heart of everything they do.

Why is this the case? Simply put, when you delight your customers, this improves your bottom line. The numbers don’t lie: 96% of consumers say customer service is an important factor in their choice of loyalty to a brand, and 67% of consumers and 74% of business buyers say they’ll pay more for a great experience.

Want to learn how to measure your customer satisfaction levels, and improve upon your customer service? In this blog post, we’ll walk you through:

  • Why customer feedback is a precious source of information
  • The different customer feedback channels
  • The different types of customer feedback, including
    • Customer complaints
    • Customer enquiries
    • Customer ratings
  • How to analyze customer feedback to improve customer satisfaction
    BONUS: How to switch your company from product centric to consumer centric
  • How to analyze customer feedback to improve customer satisfaction
  • BONUS: How to switch your company from product centric to consumer centric

Read on to find out more!
Customer Feedback: A Precious Source of Information for Your Business
Going through your customer feedback helps you improve your service levels, and boost customer satisfaction; that much is obvious. By analyzing your customer feedback, you can optimize your interactions with your customers at different touch points, and make sure you deliver a great experience, every time.

But that aside, customer feedback is a goldmine of information that helps you achieve other business objectives as well. For instance, customer feedback is crucial in the product development process.

customer feedback

To unpack this: when you’re creating a new product, you’ll want to make sure your product addresses a specific pain point of your customers, and makes their lives easier in some way.

If this product is a new iteration (or a version 2.0) of one of your existing products, you can look at customer feedback on your existing product to unlock valuable insights. If you’re developing your product from scratch? You can still make use of customer feedback — simply read product reviews about your competitors’ products instead.

When you listen to your customers’ feedback, and adapt your product, service, and the way you communicate based on your feedback, you’re setting yourself up for success. Because you’ll be able to deliver a better product to your customers, this will result in happier customers, higher retention levels, and lower churn. You’ll also find it easier to up-sell and cross-sell your customers, and your word-of-mouth marketing and referrals will skyrocket exponentially.

The bottom line? Customer feedback is exceptionally powerful, and it’s in your best interests to build a feedback loop, and keep improving upon your product.

Customer Feedback Channels

Bring up the term “customer feedback”, and most product marketers and business owners immediately think of the emails that they get from their customers. The truth is, emails are just one source of customer feedback, and there are plenty of other avenues where customers (directly or indirectly) provide feedback to companies.

Direct Consumer Feedback Channels

First up, direct feedback channels are basically channels that have been set up for the express purpose of collecting feedback. In the old days, these would’ve been complaints and suggestions boxes; these days, companies are using customer support lines, customer service emails, and even social media channels instead. If you send out a survey or questionnaire to your email database, and your customer shares their feedback with you in a survey, this also counts as direct feedback.

retention

With direct feedback channels, customers are interacting directly with brands, and they expect a response in return. Here, note that direct feedback channels can be private or public. If a customer sends a company an email or phones into the company’s call centre, the feedback they provide is obviously private. If the same customer posts on a brand’s timeline on their Facebook page, on the other hand, anyone can see the post; this makes the feedback public.

It’s important to acknowledge all the feedback that you get, be it private or public, but we’d say that companies should put more priority in monitoring and responding to their public feedback. If a customer posts a scathing review about your product/service on your social media page, for instance, this could easily blow up and go viral. Bearing this in mind, make sure you keep an eye on your public channels and pages, and respond to posts and comments quickly.

Indirect Consumer Feedback Channels

On the opposite end of the spectrum, you have indirect feedback channels, where customers discuss their preferences about a product, service, or brand as a means of self-expression. With these feedback channels, feedback is not addressed to the company, and the customer isn’t seeking to engage the company in anyway.

Indirect customer feedback mostly consists of online product reviews; these can be found on social media, blogs, forums, or eCommerce stores and platforms, including Amazon. These reviews consist of two elements — a star rating and a text component where users are free to share their opinions and thoughts about a product.

ratingsAgain, it’s important to respond to online product reviews, and improve your product/service based on the constructive criticism that you get. Check it out: after collecting data on 65 million ecommerce orders across 120,000 stores, YOTPO found that the average star ratings of an online product has a huge influence on the number of orders that said product receives:

Measuring Customer Satisfaction On Feedback Channels

Measuring customer satisfaction on these channels is pretty straightforward — after reading what your customer has to say, you should be able to gauge how happy (or unhappy) your customer is with your brand. If you want to go about this in a more structured way, however, some companies rely on customers satisfaction tools such as the Net Promoter Score (NPS).

With the NPS, you basically send your customers a one-question survey that asks: How likely is it that you would recommend our company/product/service to a friend or colleague? Recipients rate you on a 0 to 10 scale, and you calculate your score with the following formula:

While NPS is a highly popular tool, it does come with many limitations. For instance, the NPS biases the data it collects by asking customers to imagine something they might do (instead of describing something that has already happened), and it also doesn’t give companies any qualitative information (unless they add an open text question to the standard NPS survey). NPS aside, other surveys and questionnaires that you can use to measure customer satisfaction include the Customer Effort Score (CES) and Customer Satisfaction Score (CSAT).

Customer Complaints

With customer complaints, your customers are writing in because they’re unsatisfied. Sometimes the problem is a defective or malfunctioning item; alternatively, your customer might be complaining about the poor service they received, or pointing out that your product doesn’t live up to its claims.

Customer complaints

 

Not many people realize this, but customer complaints are actually a form of customer reviews as well. For example, if you get an average of one or two emails per month about defective items, you might just put this down to a fluke in production, but if you get recurrent complaints from multiple customers, then this is a sign that you should relook your quality control, and put into place higher standards.

Bearing this in mind, when you receive a customer complaint, the Standard Operating Procedure (SOP) shouldn’t be to simply apologize and offer your customer a voucher or a promo code to pacify them. You’ll want to perform service recovery to placate your customer, of course, but you should also address the underlying problem at hand, and raise the issue to the product team if necessary.

Measuring Customer Satisfaction From Customer Complaints

When a customer writes in to complain, they’re obviously not satisfied with your products/services — so it doesn’t make sense to measure customer satisfaction at this point in time. 

Instead, wait till your support team has resolved the issue, then trigger a follow-up email to your customer asking them how satisfied they were with how your team handled the situation. From here, you can identify whether your team is adept at service recovery, or whether they need to learn how to handle irate customers better.

Customer Enquiries

When customers don’t have enough information about a product, they might contact your company to ask questions about said product. Note that not all the customer enquiries have to deal specifically with your product; your customers might also write in to ask about peripheral elements of your brand, such as your loyalty program, or the promotion you’re currently running.

Measuring Customer Satisfaction From Customer Enquiries

If you receive many enquiries of the same nature, again and again, then that’s a sign that you need to work on communicating information to your customers more clearly. This could be a case of missing/incomplete information on your website, or information that’s worded ambiguously. 

Now, it’s tough to directly measure customer satisfaction levels from the enquiries that you get, but what you can do is measure the changes in conversion rate after you’ve updated the information on your website.

For example, say you’re selling plastic water bottles, and after receiving a ton of emails asking whether your bottles are non-toxic, you update your product page to reflect that the bottles are BPA-free. If this is the only change you’ve made, and the conversion rate of your product page increases by 10%, then this tells you that customers are experiencing less friction in their purchase. This, naturally, leads to higher customer satisfaction levels.

Product Ratings (+ Reviews)

Product ratings are usually measured on a 5-star scale, and these give you a handy snapshot of your customers’ overall satisfaction levels. Keep in mind, however, that product ratings need to be supplemented with qualitative data (ie: product reviews) in order to paint a more accurate picture. By looking at product ratings alone, you won’t be able to hone in on the specific areas that you need to improve upon in order to boost customer satisfaction.

Measuring Customer Satisfaction From Product Ratings & Reviews

Product reviews tend to contain a wealth of information, including:

  • Consumers’ likes and dislikes
  • Purchase drivers (why they purchased your product)
  • Brand engagement (whether it’s the first time they’ve purchased your product, or they’re a loyal fan)
  • Consumption habits (what they’re using your product for, how often they’re using your product)

You can read through your product reviews manually to gauge your customer satisfaction levels, but a much more productive way of doing this is to rely on software such as Wonderflow. These software use Neuro-linguistic Programming (NLP) technology to analyze your product reviews, and generate valuable insights to share with you.

Improve Customer Satisfaction by Analyzing Customer Feedback

Regardless of what type of data or feedback you’ve got on hand, analyzing your data will help you fine-tune your strategies, and achieve your business goals.

If you’ve got plenty of call centre data or product reviews, for instance, you can feed these into software or tools to analyze customer sentiment and satisfaction. Assuming you receive email enquiries and complaints on a daily basis, you’ll also want to analyze these to identify patterns and insights. From here, use the patterns and insights you’ve generated in different areas, including product development and design, marketing communications, and more.

When it comes to your marketing communications, for example, the key is to borrow from your customers’ language, and fine-tune your copywriting in a way that resonates with them. For instance, say your product is an activity tracker, and one of your most popular product reviews on Amazon says that your product helped them “go from being a couch potato to being the most active person in their family”.

Now, if this is an idea that resonates well with your customers, you might consider borrowing from this review, and using the same exact phrase on your website, social media, or paid ads. The goal here is to portray your brand in a way that’s hyper-relevant to your customers… and the best way to do that is to reference your customers’ exact words!

How to switch your company from product centric to consumer centric

If your company has been operating under a product-centric approach, it’s not too late to switch tactics. Here’s how you can pivot your strategies, and become more consumer-centric instead:

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