How to Measure Customer Satisfaction

How to Measure Customer Satisfaction


It’s Friday night and you decide to visit a new restaurant recommended by a good friend. The staff was attentive, drinks were well-made and the house special left you with a delighted pallet and a content feeling in your stomach. You left the restaurant satisfied and plan to return in the coming weeks with a larger group of friends.

The premise is simple: the customer is the nucleus of your business, without which your business would cease to exist. Customer satisfaction is the blood force of your business and a key contributor to its ultimate success or failure.

Why is Customer Satisfaction Important?

You may intuitively know why measuring customer satisfaction is imperative to your business’ function, but there are also shocking statistics to back your intuition.

Acquiring a new customer costs 7x more than marketing to an existing customer. When your customers are satisfied, they are loyal and oftentimes provide word-of-mouth referrals on your behalf. Investing in customer satisfaction provides a higher ROI than new customer acquisition.

In addition, 61% of customers will take their business to your competitors if unsatisfied with your brand; the average cost of a lost customer according to global data is $243. Add a few $243’s together and the loss really adds up.

While monitoring churn is an important aspect of identifying customer satisfaction, data acquisition at this stage is too late and unhelpful for loss prevention. The best way to ensure customer retention is to continuously monitor customer satisfaction by way of sentiment surveys.

How to Measure Customer Satisfaction

The best way to identify kinks in the system is to target the source and simply: ask. Surveys are a particularly effective way to measure customer satisfaction throughout the customer journey, identifying weak spots and creating an actionable plan moving forward.

There are two primary metrics for assessing your existing customer satisfaction sentiment: the Net Promoter Score (NPS) and the Customer Satisfaction Score (CSAT).

Net Promoter Score (NPS)

The Net Promoter Score (NPS) specifically measures the likelihood that an existing customer will promote your business by word-of-mouth to their personal network.

 The NPS is a simple survey containing one easily measurable question: on a scale of 1-10 (1 being unlikely and 10 being very likely), how likely are you to recommend our brand (or service) to a friend?

 Respondents are divided into three categories no the NPS scale:

  • Promoters (9 or a 10 on the NPS scale). These customers are loyal and likely to re-purchase. Promoters are enthusiastic about your brand and are most likely to promote your brand to their networks.
  • Passives (7 or an 8 on the NPS scale). The passive consumer is generally satisfied with their customer experience but lacks enthusiasm about your brand. Passives may repurchase but are more open-minded to competitive purchases.
  • Detractors (0-6 on the NPS scale). A detractor is unhappy with your product or service and may be motivated to contribute negative reviews online or by word-of-mouth to their network.

To calculate your NPS, you must subtract the percentage of detractors from the percentage of promoters.

Customer Satisfaction Score (CSAT)

The Customer Satisfaction Score (CSAT) is used to measure customer satisfaction with a specified business interaction. This top-level customer sentiment metric monitors the customer journey, identifying pain points in the process. CSAT surveys are distributed at specific touchpoints along the customer journey, and due to their simplicity and brevity, are easy to implement at many stages of the journey.

Crowdsourcing Sentiment & Surveys

Sentiment data has the potential to provide actionable insight for your business, particularly with regards to reducing churn and increasing ROI. To ensure data collection is relevant and valuable, it is necessary to survey customers continuously, which takes lots of time and energy to execute successfully.

Crowdsourcing your sentiment data is an efficient way to gather real-time, accurate and actionable data within a global network of contributors on standby, ready to contribute individually or interview customers on behalf of your brand. Mobile technology makes this possible, making customer satisfaction surveys as simple as pressing a button

Measure Customer Satisfaction with Premise

Premise’s crowdsourcing technology uses a robust, innovative mobile application to collect real-time data from an extensive network of contributors around the globe. These local Premise Contributors provide an unbiased, unique perspective that allows them to collect extremely granular data and glean valuable consumer and competitive insight on a local level.

Are you interested in learning more about how Premise uses crowdsourcing to measure customer satisfaction? Visit https://www.premise.com/ or email info@premise.com. We can’t wait to help you become more data-driven.