Know the Most Important Customer Satisfaction KPI Metrics to Monitor
Your customer satisfaction KPI data lends you invaluable insight into whether your customers are likely to buy from you again or promote you to others. Knowing your customer satisfaction numbers can help you flag potential problems, reduce churn and boost customer retention. Here’s a look at five of the most important customer satisfaction KPI metrics to track, why they matter, how automation can help you keep on top of them and how you can utilize them to drive actions that increase customer retention.
Why Customer Satisfaction KPI Numbers Matter
Your customer satisfaction KPIs provide a direct window to your business performance. These KPI’s can also lend important insights into the underlying causes of your business performance. Analyzing how your customer satisfaction KPIs compare with other KPIs can help you identify why customers are satisfied or dissatisfied. For instance, high dissatisfaction levels coupled with high numbers of customers who fail to complete the onboarding process may indicate there’s a snag in the procedures you use to bring customers on board.
Identifying this type of issue can in turn help you take proactive steps to improve your performance. In this way customer satisfaction KPIs can form the basis for action which decreases churn and increases retention, ultimately increasing your revenue and profits while driving improved loyalty and advocacy for your brand.
1. Net Promoter Score (NPS)
Net Promoter Score has become the gold standard for measuring customer satisfaction. Developed by Bain & Company business strategist Fred Reichheld, NPS measures customer satisfaction by asking survey respondents to use a scale of 0 to 10 to answer a question such as, “How likely is it that you would recommend our brand to a friend or colleague?” The wording of the question can be varied to elicit respondents’ reaction to a product or service or a more granular item such as a product feature.
Respondents who reply with a 9 or 10 are classified as “promoters” and are considered loyal customers who will keep buying and refer others. Respondents who reply with a 0 to 6 are classified as “detractors” who are unhappy customers unlikely to buy and likely to spread negative word-of-mouth. Respondents who reply with a 7 to 8 are classified as “passives” and are factored out for purposes of analysis. Taking the percentage of promoters and subtracting the percentage of detractors yields NPS. The resulting scale ranges from -100 to 100.
Because NPS indicates a customer’s inclination to make repeat purchases and make referrals to others, it is considered a good predictor of business growth or decline. A high NPS score indicates a tendency toward strong growth, while a low NPS score is a warning sign of the potential for shrinking revenue. What constitutes a high NPS score varies by industry, so you should gauge yours based on your market. The average NPS score across all industries is 32 (35 for Technology companies), according to research by digital survey provider SurveyMonkey.
Totango’s Net Promoter Score SuccessBLOC can automatically send an NPS survey to customers at various stages throughout the customer’s lifecycle. Depending on your customer’s scoring, their survey results will trigger the proper action (we call them SuccessPlays) for your customer success team to take, improving customer satisfaction.
2. Customer Satisfaction Score (CSAT)
Customer satisfaction score measures satisfaction with product quality and customer service. It does this by using a scale of 1 to 5 to answer a question such as, “How would you rate your overall satisfaction with the product you purchased?” The scale ranges from 1 for very unsatisfied to 5 for very satisfied. A score of 2 indicates the customer is unsatisfied, while 3 is neutral and 4 indicates the customer is satisfied.
To evaluate scores, add up all answers of 4 or 5 and divide the sum by the total number of responses. Multiply by 100 to convert to a percentage.
CSAT differs from NPS in that NPS measures loyalty to your brand as a whole, whereas CSAT is used for measuring customer experience of a particular product or service. It is useful for measuring customer satisfaction with some specific interaction with your brand, while NPS is useful for measuring overall satisfaction with your brand.
3. Customer Effort Score (CES)
Another important metric is customer effort score. This measures how much effort a customer has to expend to deal with some type of customer service issue, such as returning a purchase or getting a support ticket resolved. It evaluates this by asking the customer a question such as, “on a scale of ‘very easy’ to ‘very difficult,’ how easy was it to interact with our company?” The scoring system works similar to CSAT.
CES is important because the less effort a customer has to spend to get service issues resolved, the more likely they are to remain loyal to your brand. However, CES measures particular service experiences rather than the overall experience of your brand, so it should be used in conjunction with other metrics such as NPS for a more complete picture. It is best used to measure customer satisfaction at key points in your client’s customer journey, such as after your customer has purchased a product or resolved a service issue.
4. First Response Rate (FRR)
First response rate, also known as first response time (FRT) or speed to contact, measures how long it takes on average for your support agents to respond to customers after a service request has been initiated. You can measure this by taking all closed support tickets from a given time frame (such as last month), tallying up the total amount of time it took until an agent responded to each ticket, and dividing by the total number of tickets.
FRR correlates closely with satisfaction because the longer it takes for customers to get a response, the less satisfied they become. A lower FRR score means you are responding more quickly to support tickets, which promotes higher satisfaction.
5. Customer Retention Rate (CRR)
Customer retention rate measures what percentage of your customers choose to renew their relationship with you by becoming repeat buyers during a given time frame. It is used for purposes such as measuring how many customers who are subscribed to a digital service renew their subscription.
The most basic formula for measuring CRR is taking the net number of customers you had at the end of a given time frame (after subtracting any new customers), dividing it by how many customers you had at the beginning, and multiplying by 100 to convert to a percentage. The higher your result, the more customers you retained.
CRR reflects customer satisfaction and correlates closely with your revenue levels. High satisfaction promotes high retention. In turn, the higher your customer retention rate, the greater your revenue.
Choosing the Right Technology Makes Tracking Customer Satisfaction KPI Data Easier
Having to set up your own system to track all the metrics mentioned above can be challenging. The most efficient way to track customer satisfaction KPIs is to choose technology that is already designed for the task.
Totango’s Voice of the Customer (VOC) SuccessBLOC module is designed specifically for this purpose. A modular add-on to Totango’s Spark customer journey optimization platform, VOC SuccessBLOC comes out-of-the-box with a dashboard set up to help you track NPS, CSAT and other essential satisfaction metrics. Because VOC SuccessBLOC is integrated with Spark, you can see how your customer satisfaction data correlates with other important data, such as account health, onboarding completion and adoption.
Putting Your Customer Satisfaction KPI Data into Action
VOC SuccessBLOC also goes beyond data tracking by providing tools for managing customer satisfaction KPIs. For instance, you can set up your software to trigger automated or manual workflows that flag accounts of detractors and intervene to turn them into promoters. In addition, you can orchestrate both human and digital resources to provide customers with immediate responses without sacrificing the personalization of the communication.
As this illustrates, customer satisfaction KPI tracking can form a basis for customer satisfaction management. By analyzing your customer satisfaction data and comparing it with other data about your customers, you can identify variables that increase or decrease satisfaction. You can then take steps to influence these variables in ways that tend to increase satisfaction and retention rates. For example, if you notice that customers with low NPS scores also experience high support wait time as reflected in FRR scores, you may be able to increase satisfaction by taking steps to speed up your customer support process.
Automate Customer Satisfaction KPI Tracking to Boost Client Retention
Knowing your customer satisfaction KPI numbers positions you to take proactive steps to identify and correct causes of customer churn. The most important KPIs to monitor include NPS, CSAT, CES, FRR, and CRR. Using automated tools can help you stay on top of these numbers and actively manage them. The Totango Spark platform includes tools such as the VOC SuccessBLOC designed to help you automatically track and optimize your most important customer satisfaction KPI metrics. Try the VOC SuccessBLOC yourself for free and see how easy it can be to track and manage your most vital customer satisfaction KPIs.