What Is CSAT? How Do You Measure & Improve It?

What Is CSAT (Customer Satisfaction Score)?

CSAT, or Customer Satisfaction Score, is a metric that measures how satisfied customers are with a specific product, service, or interaction. It offers a snapshot of customer happiness and helps businesses understand how effectively they meet customer expectations by using a composite customer satisfaction score.

Businesses measure customer satisfaction to identify customer dissatisfaction and reduce churn, ensuring better customer experience, long-term growth, and stability.

CSAT is typically measured through surveys asking customers to rate their satisfaction, often on a 5-point scale ranging from “Very Satisfied” to “Very Dissatisfied.” Other variations include numerical scales (e.g., 1-5) or even smiley face icons. Survey questions can focus on satisfaction with a particular product, a specific service experience, or the overall interaction with the company.

Why Measure Customer Satisfaction

Measuring customer satisfaction is crucial for businesses aiming to understand their customers’ needs, expectations, and experiences. Tracking customer satisfaction metrics enables businesses to pinpoint areas that require improvement, reducing customer churn and boosting customer loyalty.

Customer satisfaction is a key driver of business growth, as satisfied customers are more likely to return and recommend your business to others. Moreover, measuring customer satisfaction helps businesses make data-driven decisions to enhance the customer experience. It also provides a benchmark for comparing performance against industry standards and competitors, ensuring that your business remains competitive and responsive to customer needs.

How To Calculate CSAT

The customer satisfaction score (CSAT) is calculated from customer feedback gathered through surveys. Customers rate their satisfaction on a predefined scale, commonly a 5-point scale. The formula for calculating the CSAT score is:

(Number of satisfied customers / Total number of respondents) * 100

“Satisfied customers” are typically those who respond with a rating of “Satisfied” or “Very Satisfied” (or the equivalent top two ratings on your chosen scale). For example, if you send out 100 surveys and 70 customers respond, and of those 70, 50 indicate they were satisfied or very satisfied, your CSAT score would be (50/70) * 100 = 71.4%.

How Is CSAT Measured?

Measuring CSAT involves a systematic approach to gathering and analyzing customer feedback. Here’s a breakdown of the key steps:

1. Choose a customer survey method

Decide how you’ll collect CSAT data, which measures customer satisfaction. Options include email surveys, phone surveys, in-app surveys, webform surveys, live chat surveys, and on-site surveys. Consider factors like response rate, cost, time, and the level of detail you need.

2. Design the survey

Create your survey using simple, easy-to-understand CSAT questions. Use clear, neutral language, avoiding jargon and leading questions. Common formats include:

• Likert Scale: Respondents choose a number on a rating scale (e.g., 1-5) to indicate their satisfaction level. For example, “How likely are you to recommend our brand to others?” with a scale from “Very Unlikely” to “Very Likely.”
• Smiley Face System: Customers choose a smiley face that best represents their satisfaction level (e.g., from very unsatisfied to very satisfied).
• Thumbs Up/Down System: A simple choice of satisfaction or dissatisfaction.

Consider including at least one open-ended question to gather valuable qualitative insights.

3. Distribute the survey

Send the survey shortly after a customer interaction, while the experience is fresh in their mind. Distribute surveys via email, in-app notifications, SMS, or other preferred channels.

4. Calculate and analyze your results

If using a 5-point Likert scale, those who select 4 or 5 are considered satisfied. Measure customer satisfaction scores to identify trends, patterns, strengths, and weaknesses. Compare results to benchmarks (internal and external) to understand your performance.

5. Take action

Develop a plan based on the results to address pain points. Prioritize improvements in areas with the greatest impact. Close the customer feedback loop by communicating changes back to customers.

6. Monitor progress

Continuously track improvements or declines. Regular monitoring is key to continuous improvement and incorporating CSAT into your decision-making.

Why Is CSAT Important?

CSAT is a powerful customer service metric that indicates your business’ health. Understanding customer success is closely linked to measuring CSAT, as it helps businesses recognize satisfied customers, reduce churn, and improve customer experience. High CSAT scores correlate with:

• Customer retention: High CSAT scores correlate directly with customer loyalty. Happy customers are more likely to return, make repeat purchases, and become brand advocates.
• Brand reputation: Positive customer experiences contribute to a strong brand image. Word-of-mouth marketing, driven by satisfied customers, is invaluable.
• Business growth: Satisfied customers recommend your business to others, leading to organic growth and increased revenue.
• Identifying areas for improvement: Customer satisfaction scores can pinpoint weaknesses in your products, services, or customer service processes. Negative feedback provides valuable insights for improvement.
• Benchmarking performance: CSAT scores allow you to benchmark your performance against competitors in your industry. This helps you understand where you stand and identify areas where you need to catch up.

“Many retailers are sitting on a fortune of data, yet most neither collect first-party customer data in a structured way nor leverage its full potential. The missed opportunities are massive … setting up a best-in-class loyalty program to collect first-party data and scaling 1:1 personalization offers typically improves revenue and profit by 3% to 5%.”

Source: Boston Consulting Group

When Should CSAT Be Measured?

Measure CSAT shortly after a customer interacts with your business. However, the optimal time depends on the specific interaction:

• Post-purchase: A short customer satisfaction survey sent shortly after a purchase (e.g., a day or two) can gauge satisfaction with the buying process and initial product impressions. For more complex products, you might wait a bit longer to allow the customer to experience its full functionality.
• Post-interaction with customer service: Immediately after a customer service interaction (e.g., phone call, email exchange, live chat), send a survey to assess satisfaction with the support experience to capture feedback while the interaction is fresh in the customer’s mind.
• After a specific event: If you’re measuring satisfaction with a specific event, like a webinar, training session, or product demo, send a survey shortly after the event concludes.
• Regularly (e.g., monthly or quarterly): For ongoing products or services, periodic customer satisfaction surveys can track customer satisfaction over time and identify trends. This helps you monitor the long-term impact of your efforts.
• Key milestones: Consider surveying customers at key milestones in their customer journey, such as after onboarding, after a certain period of usage, or before renewal.

Average survey response rates fall around 33% but can vary from 13%–57% depending on how you conduct the survey (in-person and mail surveys have the highest response rates, while telephone surveys and in-app ones have the lowest).

The key is to choose a time that allows the customer to provide thoughtful feedback based on their experience. Avoid surveying too frequently, as this can lead to survey fatigue and less accurate data.

What’s a Good CSAT Score?

Once you’ve implemented a CSAT survey and the results are in, how do you know if your CSAT score is good? How should you set your expectations?

While 80% is often considered a benchmark, a “good” CSAT score varies by industry, company size, customer expectations, and internal goals. What’s considered excellent for one company might be average for another.

However, there are a few ways to get a sense of where you stand:

• Industry benchmarks: Resources like the American Customer Satisfaction Index (ACSI) provide benchmark scores for various industries. This allows you to compare your score to the average for your sector.
• Internal goals: Set internal goals based on your company’s past performance and objectives. Strive for improvement rather than fixating on an arbitrary number.
• Competitor analysis: If possible, research your competitors’ CSAT scores to see how you stack up.

The most important thing is to track your CSAT score over time and look for trends. Consistent improvement indicates that you’re on the right track, even if your score isn’t the highest in your industry. To effectively track your progress, make CSAT measurement a routine part of your customer experience program to identify areas for improvement and measure the impact of your efforts.

Challenges With Measuring CSAT (Pros & Cons To Consider)

While CSAT is a valuable metric, be aware of its limitations and challenges:

Pros:

• Simple and easy to understand: CSAT is a straightforward metric that’s easy to calculate and interpret, making it accessible to everyone in the organization.
• Actionable insights: Customer satisfaction surveys can provide specific feedback on areas where your business excels or falls short, allowing you to take targeted action.
• Widely recognized: CSAT is a widely recognized and used metric, making it easy to benchmark against competitors and industry standards.
• Cost-effective: Customer satisfaction surveys are relatively inexpensive to implement, especially with the availability of online survey tools.

Cons:

• Subjective: Customer satisfaction scores are based on customer perceptions, which can be subjective and influenced by various factors outside of your control (e.g., mood, personal experiences).
• Limited scope: CSAT primarily measures satisfaction with a specific interaction or experience, not necessarily overall customer loyalty or long-term relationship health.
• Potential for bias: Survey response rates can be low, and those who do respond might be more likely to be extremely satisfied or dissatisfied, skewing the results. The way the questions are phrased can also introduce bias.
• Snapshot in Time: CSAT provides a snapshot of customer satisfaction at a particular moment. It doesn’t necessarily reflect how satisfaction might change over time.

Related Article

18 Best Customer Experience Tools to Boost Satisfaction & Engagement

Tallon Brown

Best Practices for Improving CSAT

Improving CSAT to improve customer satisfaction requires a proactive and continuous effort. Simply measuring CSAT is only the first step. The real value comes from taking action based on the insights you gather. Implementing a customer-centric approach and focusing on key best practices helps businesses improve their CSAT scores and create stronger, more loyal customer relationships.

The following best practices provide a roadmap for creating a culture of customer satisfaction and driving meaningful change.

• Proactive customer service: Anticipate customer needs and offer support before problems arise. This could include FAQs, tutorials, or proactive outreach. Consider using data to predict customer issues.
• Personalized interactions: Tailor communication and solutions to individual customer needs and preferences. Use customer data to understand their history and tailor interactions accordingly.
• Efficient problem resolution: Address customer issues quickly and effectively. Empower your customer service team to resolve issues on the spot, rather than escalating every problem. Provide them with the training and resources they need.
• Gathering and acting on feedback: Actively solicit customer feedback through various channels (e.g., surveys, social media, reviews) and use it to drive improvements. Critically, close the feedback loop by letting customers know how their input has been used.
• Empowering employees: Give frontline staff the autonomy and resources they need to provide excellent customer service. Trust them to make decisions that benefit the customer.
• Monitoring & analyzing satisfaction data: Track CSAT scores over time to identify trends and measure the effectiveness of your improvement efforts. Look for patterns and use data to inform your strategy.
• Use a customer experience management (CXM) software: CX platforms provide features such as automated survey distribution, real-time feedback analysis, customer journey mapping, and integration with other business systems to centralize customer data, get a better view of the customer experience, and automate many of the processes involved in gathering, analyzing, and acting on customer feedback. A good CXM platform can also help you identify trends, personalize interactions, and track the impact of your improvement initiatives.

CSAT vs. NPS vs. CES

While CSAT focuses on overall customer satisfaction, other satisfaction metrics provide different perspectives on the customer experience. Two popular examples are:

• Net Promoter Score (NPS): Measures customer loyalty and the likelihood of recommending your brand. It asks customers how likely they are to recommend your company on a scale of 0-10.
• Customer Effort Score (CES): Measures how easy it is for customers to interact with your company (e.g., resolving an issue or making a purchase). It focuses on the effort required by the customer.

Each metric serves a different purpose. CSAT is a good indicator of satisfaction, NPS focuses on loyalty and advocacy, and CES measures ease of interaction.

Choosing the right metric (or combination of metrics) depends on your business goals and what aspects of the customer experience you want to measure and improve. Using a combination of these metrics provides the most complete picture of customer experience.

How To Effectively Use CSAT

Customer satisfaction scores provide valuable insights when properly used. Here are key strategies to drive positive change:

Identify areas for improvement

Analyze CSAT scores across touchpoints to find problem areas in products, services, and customer interactions. Combine quantitative scores with qualitative feedback to gain deeper insights that numbers alone can’t provide.

Prioritize improvement efforts

Focus on high-impact areas significantly affecting customer satisfaction. Be strategic with resources by evaluating the cost-benefit relationship of improvements.

Track and measure progress

Monitor CSAT scores over time to assess your improvement initiatives. Establish clear customer service goals and benchmarks to measure progress systematically and maintain accountability.

Manage customer feedback

Acknowledge customer input and communicate when you implement changes based on their suggestions. This transparency builds trust and shows customers they’re shaping your business.

Empower employees

Share CSAT data with team members to help them understand their impact on customer satisfaction. Create a customer-centric culture by encouraging employees to exceed expectations. Integrate CSAT data into decision-making processes to build stronger customer relationships.

Get Actionable Insights To Drive Satisfaction with Nextiva

When measuring the customer experience, there isn’t just one metric that will give you a pulse on how things are going. You need to take a comprehensive look at how your customers engage with your business throughout their journey. Now that you understand CSAT’s meaning and how to integrate it into your business practices, you can start delivering exceptional customer experiences.

However, customer satisfaction metrics are key because they offer immediacy, specificity, and simplicity in revealing customer sentiment about your business.

With an AI-driven customer experience management solution like Nextiva, you have the power of data at your fingertips. You can confidently manage your customer experience and innovate with a centralized dashboard and data-driven insights.

Net Promoter, Net Promoter Score, and NPS are registered trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.

CSAT FAQs

Still have questions about CSAT scores? To learn more about customer satisfaction and CSAT scores, read these frequently asked questions.