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Customer Satisfaction: Definition, Types, Importance & Examples

Customer Satisfaction
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    In any industry, keeping customer satisfaction high is extremely important. In a study done by McKinsey in 2022, providing better customer experience leads to sales improving by 2-7% and revenue increasing by 1-2%.

    Furthermore, in a report by Merkle, 66% of consumers care more about the customer experience than costs. Thus, businesses should keep customer satisfaction high by improving strategies and adopting new techniques to increase sales. 

    So let’s take a look at what customer satisfaction is, how many levels there are, and how to measure and improve it.

    What is Customer Satisfaction?

    In simple words, customer satisfaction is all about finding out whether consumers are happy with a business. This could be due to great customer experiences or excellent products and services provided by a company.

    Thus, figuring out ways to measure customer satisfaction is a great way to improve your company. To do that, we need to understand the different levels of customer satisfaction.

    Levels of Customer Satisfaction

    Generally, there are four levels of customer satisfaction that a business has to keep in mind. These different types come one after the other as businesses have to maintain and meet each level to increase overall customer satisfaction.

    Thus, the profitability of a business increases every time it manages to overcome one of the customer satisfaction levels.

    Level 1: Meeting Customer Expectations

    The first and most basic level of customer satisfaction is meeting the consumer’s expectations. So, if customer expectations are met, your business is doing well and your consumers are happy.

    However, just because this is the first level does not mean that you should take it for granted. One misstep and you could find your business in trouble keeping a hold of your current customers.

    So, it is important to maintain the first level regardless of whichever industry your business is in.

    Level 2: Exceeding Customer Expectations

    The next level is pretty straightforward, which is to exceed customer expectations. Meeting expectations is a basic necessity for a business and exceeding it is a differentiation from your competitors.

    This is more than offering great and attractive products, this is about serving the customers. Customer retention is excellent at this level as consumers see that you are making an effort to exceed their expectations. Which means, you are giving customers more than they expected. It’s both great for the customers and your business.

    Ways to exceed customer expectations are:

    • Offering Excellent Customer Support
    • Augmenting Your Products and Services

    Level 3: Delighting Your Customers

    At this level, your goal is to make your customers happy and put a smile on their faces. You have already met and surpassed their expectations, and now you are personalizing your products and services towards them. So, this level is to get in sync with your customers’ emotional level.

    Hence, you need to show that you really care about your customers. This turns them into loyal customers for a long time, which is great for business.

    Ways to delight customers are:

    • Loyalty Systems such as Points
    • Personalized Messaging
    • Tokens of Appreciation
    • Special Discounts or Offers

    Level 4: Amaze Your Customers

    The very last level goes beyond happiness. It is time to shock and awe customers. At this point, all you are trying to do is offer something that blows your customers away.

    This can be introducing big changes to your products or little gestures that customers will not expect.If you manage to amaze your customers, your business can elevate itself to new heights.

    Ways to amaze your customers are:

    • Offer new products with excellent features beyond their expectations
    • Giving Free Products or Services
    • Exclusive Promotions and Offerings

    Why is Customer Satisfaction Important?

    The importance of customer satisfaction cannot be understated as it is the difference between whether you succeed or fail as a business. In the service industry, it’s all about the customers and what they care about. Hence, customer satisfaction is one of the key aspects of your business that you need to constantly track and improve.

    Here are some key reasons why customer satisfaction is important.

    Customer Satisfaction Importance

    Decreases Customer Churn

    As a business, customer retention is extremely important. Thus, keeping customers engaged and satisfied is something every business strives for. Keeping customer satisfaction high keeps consumers happy and feeling great about the products and services they are receiving.

    That way, you can keep customers satisfied, which reduces the churn rate. Not only that, but this also increases the Customer Lifetime Value (CLTV) of your company. Meaning, that customers are more likely to stay with your company and avoid switching to a competitor. 

    Increases Customer Loyalty

    If customers are satisfied with your products, they don’t need to look for solutions elsewhere. This is because customers are loyal to your business due to high customer satisfaction. Hence, customers are more likely to stick to your products and services as opposed to switching to a competitor. Keeping customers at all times is a challenge businesses have to juggle with. 

    Boosts Customer Acquisition

    Consider this, if customers are happy with your services, your company is held in high regard. Thus, word-of-mouth recommendations are more common, which attracts new customers.
    It’s all about the goodwill that you have built up with your current user base. If you maintain that, your customers will bring in new ones through word-of-mouth. 

    Increases Revenue

    Another no-brainer effect of high customer satisfaction is the increase in revenue. If customers are happy, your products and services are in demand and are being used or bought at a good rate. Thus, increase your pockets for future improvements and just a great bank balance in general.

    Improves Your Business

    Through customer satisfaction, your business can elevate itself to great heights. Due to high customer satisfaction, old customers are staying, creating a consistent revenue stream. Overall, high customer satisfaction leads to an increase in revenue and more resources to improve your business. That way, you can differentiate your company from your competitors and make it more efficient and productive.

    How to Measure Customer Satisfaction

    As we laid out earlier, customer satisfaction is very important. Then, it’s even more necessary to measure or quantify customer satisfaction. There are a few different metrics we use to measure customer satisfaction.

    One of those metrics directly measures customer satisfaction while the rest gives us the full picture. For all of those metrics, there are different ways to collect the data to measure them.

    Hence, here are all the customer satisfaction measurement metrics along with the data collection methods.

    Customer Satisfaction Score (CSAT)

    Customer Satisfaction Score, also known as CSAT, is a metric used to determine customer satisfaction. CSAT shows you what percentage of your customers are happy with your services through one or more questions asked.

    This data is generally collected through CSAT surveys or question prompts and then categorized based on the scale you are using (typically it is 1-5). Taking the positive responses (4 or 5), you can calculate CSAT using the following formula.

    CSAT = (Number of Positive Responses / Total Responses) * 100%

    Through this, you can find out what percentage of your customers are satisfied. It is that simple and straightforward. A good score for CSAT depends on the industry but in a general case, 75%+ score is considered to be good. To collect all the data that you require to calculate CSAT, you need to use CSAT surveys.

    CSAT Surveys

    These surveys are used to ask CSAT questions and get data from respondents. Using this type of survey, you can collect the data you need to calculate CSAT. The scales used for these questions are usually from 1 (Extremely Dissatisfied) to 5 (Extremely Satisfied), the names usually vary. 

    Sample questions for this type of survey are as follows:

    • “Are you satisfied with this service?”
    • “How satisfied are you with your experience today?”
    • “Was this service satisfactory for you?”

    Net Promoter Score (NPS)

    Another way to indirectly learn about customer satisfaction is by measuring Net Promoter Score (NPS). The use of NPS is to find out whether or not customers are likely to promote your business to others.

    NPS surveys or questions are generally asked on a scale of 1-10 with 1-6 being Detractors, 7-8 being Passive, and 9-10 being Promoters. To calculate NPS, we use the following formula:

    NPS = % of Promoter – % of Detractors

    While it looks pretty complicated to do so, doing it step by step can simplify the process. First, ask the questions or prompts through surveys or other means. Next, find out the separate percentages for Promoters and Detracters by dividing each value by total responses. Then, you subtract the two values to find NPS.

    There is no guideline or benchmark as to what is a good score for NPS but it should never be negative for your business and you should constantly try to improve it. Also, you can compare with other competitors to see if there is any improvement required on this front.

    Like CSAT surveys, NPS questionnaires are needed to get data for calculation.

    NPS Surveys

    These surveys contain questions to collect data to calculate it. However, the scales of these questions are usually larger as you are trying to identify three groups of people instead of the positive ones. For example, scales are usually 1 (never) to 10 (always), so you can get many different types of answers, and using the calculation, you can figure out whether it’s good or bad for you.

    Sample NPS questions can be as follows:

    • “How Likely Are You To Recommend This Service to Others?”
    • “How Likely Are You To Mention Our Product To a Friend or Colleague?”

    Customer Effort Score (CES)

    Measuring from a different lens, the Customer Effort Score (CES) determines how much of an effort customers have to put in to get what they need. This could be through customer support, documentation, and the like.

    CES is determined through surveys or a prompt to gauge the satisfaction level of your customers after getting the information they need. To calculate CES, we use the following formulas:

    CES = Total sum of CES ratings / Number of Responses

    It is essentially finding the average rating of the question or prompt. As for the scale, CES can be used for a 1-5 1-7, or any other scale. Also, there are no real benchmarks or comparisons for this metric. Rather, this is used to improve your service over time by elevating this score. It is a great indicator to see whether customers are getting what they want in terms of information and service from you.

    Like the other two metrics, you need to use CES surveys to collect data and calculate CES.

    CES Surveys

    These surveys contain questions to gather data in terms of customers getting the information they need. CES is pretty simple with a decent number of options for each question. Also, the scales are usually 1-5, with options ranging from 1 (Very Difficult) to 5 (Very Easy).

    Sample CES questions are as follows:

    • “How East Was It To Get Product Information?”
    • “Did This Conversation Give You The Information You Needed?”

    Using Question Prompts and Feedback

    Instead of the three different surveys, you can also ask CSAT, NPS, or CES questions by prompting customers after they do certain actions. This could be after:

    • Feedback after completing a chat with a Chatbot or Agent
    • Questioning after availing one of your services or products
    • Asking after a customer has gathered the information they needed through blogs or documentation at the end.

    This entire process can be done using a scale of any number, using emoticons to rate service or comments left by customers. Also, this method can be a more interactive way to ask customers for feedback and not cold-emailing or cold-messaging them.

    How To Improve Customer Satisfaction Effectively

    As we have wrapped up what customer satisfaction is, why it’s important, and how to measure it, let’s move to how you can improve customer satisfaction. Frankly, there are a lot of ways to improve it, and we could spend all day talking about all the different ways you can do it.

    Rather than that, let’s talk about how you can improve customer satisfaction effectively using the following methods.

    Improve Customer Satisfaction

    1. Improving Customer Support Using AI Chatbots

    Working on enhancing your customer support is one of the best ways to improve customer satisfaction. For this, you can employ AI Chatbots and Live Chat in order to provide great customer service and improve user experience.

    AI Chatbots, more importantly, LLM Powered Chatbots, have the capability to learn and converse with customers in a human-like manner. Not only that, this also makes conversations more personalized, converse in multiple languages based on users, and allows certain prompts to be used.

    That way, a Chatbot can determine the course of action and also hand over to an Agent seamlessly when necessary. REVE Chat can help with this process as our products have the capability to do all of that and more for your business.

    2. Analyzing and Implementing Customer Feedback

    Through many methods and metrics outlined above, you can ascertain customer satisfaction and gain feedback. Through this process, you can improve your services and add new features or products based on what customers are looking for.

    So, using surveys and question prompts of different categories to find out what customers like and want and then implementing it is one of the surefire ways to keep consumers engaged and availing your services.

    3. Omnichannel Support

    As your business grows, the number of channels you will be active will increase. Thus, it becomes quite tedious to check every single channel to see if you have any queries or leads you need to follow up on. In these cases, why not use a tool that provides omnichannel support?

    Through a tool like REVE Chat’s various integrations, you can gather all of those messages and feedback under one inbox and address all of them from a singular platform. This way, it saves you a lot of time and makes your business more efficient.

    4. Proactive and Fast Customer Support

    While having a good customer support system is good, the process needs to be fast and proactive to be great. Answering with quickness and precision is something customers appreciate. Furthermore, if you can track what customers are looking for and ask them the queries before they ask you, that is even better.

    Through REVE Chat’s LLM Powered Chatbots, you can do all of that and more. Our Chatbots reply instantly and messages customers proactively based on where they are looking in your platforms. It could be a simple “How Can I Help You?” or a more complex “Do You Want More Information About This Product?”.

    All of this can be done using our Flow-Based No-Code Chatbot which you can configure as much as you want to fit your needs.

    5. Personalizing Customer Experience and Leading With Empathy

    Being empathetic to customers and personalizing the messages you send them creates an emotional connection that you need to achieve higher levels of customer satisfaction. In Levels 3 and 4 of customer satisfaction, you can see that having an emotional connection with your users is great.

    That way, you can curtail services and offers, offer tokens of goodwill, and be empathetic with messages, gifts, and more. All of this is what customers truly appreciate and this can set you apart from any of your other competitors and keep your customers invested in your business.

    6. Platforms For Customer Self-Service

    It is often a great idea to have informative blogs like this one or documentation for customers to look through and learn something new. That means tailoring content to provide context and connections with your products and giving users new information that they can use without asking an Agent or Chatbot about it.

    This could also come in the form of tutorial videos, how-to guides, and so on. Our REVE Chat blogs and documentation provide a lot of information about our Chatbots, Live Chat, Integrations, and so on. That way, we keep our customers informed about anything and everything regarding our products.

    7. Investing In Training

    While, it is great to offer different services, products, and tools, you also need the staff to be able to utilize all of that. Hence, training your staff on all the new features your company is implementing and educating them on new information goes a long way. If your staff is trained as such and knows all the information, they can serve customers better and increase customer satisfaction.

    8. Monitoring Interactions

    As always, having a monitoring system always helps as you can look back at it and determine where you can improve. It’s a very introspective way of improving your service and as a result, increasing customer satisfaction.

    Through the use of the tools that REVE Chat provides, you can use our Live Chat and Chatbots and monitor all the conversations. Also, you can look at the chat history to review all the conversations and gain leads and useful insights in the process.

    Furthermore, through our Reporting system, you can acquire data regarding conversations to improve your customer service.

    9. Extensive Customer Assistance

    While the basic level of customer support is provided by most businesses, sometimes users need more than that. Thus, there is a need for extensive customer assistance where your agents can guide the customers.

    Whether this be through Live Chat, Co-Browsing, or Video Chat, these features are required for a high-level customer support system. In Live Chat, you can give solutions to complex problems that customers may be facing.

    Co-browsing using all sorts of tools like REVE Chat can be used to show customers the solutions in a more interactive way in the same system. Likewise, Video Chat can provide customer support in a personalized way and direct users towards solutions.

    All of these features that you need for extensive customer assistance can be found in all of REVE Chat’s products. We specialize in this deeper level of support that all our customers can make use of if needed.

    Customer Satisfaction Examples

    Through REVE Chat’s collaboration with clients, we have helped services for companies in different sectors.

    Commercial Bank of Kuwait (CBK): Revolutionizing Customer Support In Banking

    Working with CBK, we have revolutionized customer support in banking. Through REVE Chat’s many features and tools, we provide
    multilingual support

    • Better Onboarding Process
    • Fast Queries
    • Proactive Chats
      And many more

    With our tools, CBK has elevated itself with better customer service and experience.

    Saudi Telecom Company (STC): Spreading A Wide Net In The Telecom Industry

    Through our collaboration with STC, we are providing a variety of services to customers of the telecom giant. This creates consistency in terms of customer service to a wider net of users. STC uses our tools to improve

    • Their customer support experience
    • Personalized mass messaging and offers
    • Campaigns for Marketing
      And many more

    REVE Chat is helping a telecom giant in STC with a variety of services and will continue to serve the best of the industry in a similar way.

    bKash: Online Banking and Services At The Tip of Your Fingers

    One of REVE Chat’s top clients is bKash, a forward-thinking Mobile Finance Service, providing services to customers on all corners. Using our services, bKash has elevated its chat support to

    • Provide multilingual support
    • Fast and efficient responses
    • Monitoring and providing chat logs
      And many more

    Our tools give you the platform to reach new heights, and bKash has done so, with the use of our groundbreaking customer service products.

    Legrand: Providing Tech Support and Services to an Industry Giant

    As one of the biggest companies in the Tech Infrastructure industry, Legrand provides services on many fronts. They employed REVE Chat’s services to push customer and product service to the next level as we offer.

    • Fast responses
    • Excellent customer support
    • Product and Service recommendations
      And many more

    We have a great footing in the tech infrastructure industry as Legrand x REVE Chat is transforming the landscape and providing the best service that customers deserve.

    Conclusion

    To wrap up this blog, customer satisfaction is a massive field that all businesses have to track and keep in mind. Through the various metrics and methods, businesses can track and measure customer satisfaction. 

    Also, the blog explains why customer satisfaction is so important and how you can improve it. Using REVE Chat’s products you can do just that as you can revolutionize your customer support while addressing all the struggles your company may have in giving fast replies and limited resources

    So, sign up with us now to avail the best customer support you can find anywhere. 

    Frequently Asked Questions

    Customer satisfaction is all about finding out whether consumers are happy with a business. This could be due to great customer experiences or excellent products and services provided by a company.

    There are four levels of customer satisfaction. They are Meeting Expectations, Surpassing Expectations, Delighting the Customers, and Amaze the Customers.

    Customer Satisfaction affects a lot of different aspects of a business. High customer satisfaction decreases churn rate, improves customer loyalty, boosts customer acquisition, elevates your business, and increases revenue.

    The three key metrics to get a full picture of customer satisfaction is to measure and calculate Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), and Customer Effort Score (CES).

    The main goal for customer satisfaction is to provide the best service to retain current consumers and ensuring new customers come in through recommendations and word-of-mouth.

    Good Customer Satisfaction means listening to your customers and fulfilling all their needs and demands. Also, it is to go beyond that and provide experiences that customers will cherish.

    To improve customer satisfaction, you can: Improve Customer Support Using AI Chatbots, Analyzing and Implementing Customer Feedback, Omnichannel Support, Proactive and Fast Customer Support, Personalizing Customer Experience and Leading with Empathy, Platforms for Customer Self-Service, Invest in Training, Monitoring Interactions, and Extensive Customer Experience.

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    Ehsanur Rahman
    AUTHOR’S BIO

    Ehsanur Rahman, the Head of Customer Communication at REVE Chat is dedicated to implementing advanced solutions that boost customer interactions and satisfaction. Ehsanur's passion for technology and customer service drives his commitment to delivering exceptional experiences.

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