In This Article
Introduction
Customer satisfaction is a measure of how well a company's products, services, and overall experience meet or exceed customer expectations. It is a key indicator of customer loyalty, retention, and business success.
Satisfied customers are more likely to repurchase, recommend the company to others, and be less price-sensitive. Understanding and improving customer satisfaction is therefore critical to long-term profitability.
Understanding Customer Satisfaction
Satisfaction = Perceived Performance - Expectations
If Performance > Expectations → Delighted customer
If Performance = Expectations → Satisfied customer
If Performance < Expectations → Dissatisfied customer
The Expectation-Disconfirmation Model
Customers form expectations before purchase and then compare actual experience against those expectations:
- Positive disconfirmation: Performance exceeds expectations
- Confirmation: Performance meets expectations
- Negative disconfirmation: Performance falls short
Measurement Methods
Key Metrics
| Metric | Question | Scale |
|---|---|---|
| CSAT | How satisfied are you with [experience]? | 1-5 or 1-10 |
| NPS | How likely to recommend to a friend? | 0-10 |
| CES | How easy was it to [complete task]? | 1-7 |
Net Promoter Score (NPS)
Measures customer loyalty based on likelihood to recommend:
- Promoters (9-10): Loyal enthusiasts who will fuel growth
- Passives (7-8): Satisfied but unenthusiastic
- Detractors (0-6): Unhappy customers who can damage brand
NPS = % Promoters - % Detractors
Range: -100 to +100
Customer Effort Score (CES)
Measures ease of interaction, based on research showing that reducing customer effort increases loyalty more than delighting customers.
Survey Best Practices
- Keep surveys short and focused
- Ask at relevant touchpoints (post-purchase, post-support)
- Include open-ended questions for insights
- Ensure representative sampling
- Close the loop on feedback
Satisfaction Drivers
Key Drivers Across Industries
- Product/Service Quality: Core offering meets needs
- Price/Value: Fair pricing for value received
- Convenience: Ease of purchase and use
- Customer Service: Helpful, responsive support
- Reliability: Consistent performance
- Personalization: Tailored experiences
Kano Model
| Category | Description | Impact |
|---|---|---|
| Basic (Must-haves) | Expected; absence causes dissatisfaction | Won't increase satisfaction, but absence hurts |
| Performance | More is better; linear relationship | More features = more satisfaction |
| Delighters | Unexpected; creates delight | Not expected, but highly valued when present |
Improving Customer Satisfaction
Strategies
- Set realistic expectations: Don't overpromise
- Deliver consistently: Reliability builds trust
- Listen and act on feedback: Close the loop
- Empower employees: Enable them to solve problems
- Personalize experiences: Make customers feel valued
- Recover well: Great service recovery can increase loyalty
Service Recovery
The "service recovery paradox" suggests customers who experience a problem that is well-resolved can be more loyal than those who never had a problem.
Conclusion
Key Takeaways
- Satisfaction = Perceived Performance - Expectations
- Key metrics: CSAT, NPS, CES
- NPS measures loyalty through likelihood to recommend
- Customer Effort Score focuses on ease of interaction
- Kano Model distinguishes must-haves, performance factors, and delighters
- Service recovery is an opportunity to build loyalty
- Satisfaction drives retention, referrals, and profitability