What is customer satisfaction? Definition + importance
Customer satisfaction is a measure of how happy your customers are with your product or service. And for many businesses, it’s the difference between a success and a failure—no pressure.
Last updated January 23, 2023
What is customer satisfaction?
Customer satisfaction (CSAT) is a measure of how well a company’s products, services, and overall customer experience meet customer expectations. It reflects your business’ health by showing how well your products or services resonate with buyers.
If you asked a batch of business owners, “How would you define customer satisfaction?” you would most likely get a bunch of different answers. One thing is certain: High customer satisfaction means customers are happy and business is booming.
In fact, our Zendesk Customer Experience Trends Report 2022 uncovered an eye-opening statistic: 61 percent of consumers would switch to a competing brand after just one bad customer experience. That’s why it’s crucial for every business—from the mom-and-pop bakery down the street to a behemoth like Amazon—to focus on customer satisfaction.
Your guide to customer satisfaction:
- What is customer satisfaction?
- What does it take to satisfy the customer?
- The importance of customer satisfaction
- Why measure customer satisfaction
- How to measure customer satisfaction
- How to improve customer satisfaction
- Customer satisfaction examples
What does it take to satisfy the customer?
Customers are looking for effective and efficient customer service, but research shows that there may be a disconnect between what businesses think satisfies a customer and what actually does.
In our CX Trends Report, 60 percent of companies surveyed gave themselves high marks for service. But 68 percent of customers said there’s room for improvement, and 54 percent reported that customer service feels like an afterthought for most of the businesses they buy from.
A few other notable findings from our report:
- Merely 18 percent of buyers are extremely satisfied with the number of communication channels businesses offer them.
- Less than 20 percent say resolution speeds are extremely strong.
- Only 21 percent report it’s easy to interact with businesses.
Now is not the time to settle for mediocre—especially when the quality of your customer service may earn you repeat customers or be the reason you lose out to competitors. By taking the time needed to understand what great customer service means to your unique audience, you can make the changes necessary to ensure that middle-of-the-road experiences don’t hold you back.
The importance of customer satisfaction
Customer satisfaction is important because it illustrates whether your customer base likes what you’re doing. Research shows that high satisfaction leads to greater customer retention, higher lifetime value, and a stronger brand reputation.
Low customer satisfaction scores are important, too. They can reveal customer pain points and provide data-backed insights on how to improve your product, service, and overall customer experience.
1. It drives customer loyalty
It’s a truth universally acknowledged: an unhappy customer is more likely to tell others about their negative experience than a happy customer is to share a positive one.
And considering 79 percent of people in the United States use social media, sharing is easier than ever before. If a customer has a bad experience with your company, they can broadcast it to millions of people before they’re even out the door.
Prioritizing customer satisfaction and making changes based on negative feedback can help your business get better reviews—and, in turn, more customers.
Example: A customer makes a Twitter thread about their poor experience with your company, leading their followers to also distrust your brand. To help save the interaction, respond to the customer as quickly as possible. Apologize for the error and ask them to direct message you so you can get more information and remedy the situation.
2. It helps reflect team performance
Customer satisfaction benchmarks and metrics don’t just help you gauge how your audience is feeling—they also tell you how your support team is doing.
The following metrics can be useful in understanding customer satisfaction levels:
- Initial response time: In our CX Trends Report, respondents said that long wait times were the most frustrating part of bad customer service. This metric can help you identify pain points in your team’s ability to respond promptly.
- Resolution time: If it’s taking your support agents hours to resolve issues that could be dealt with swiftly, it might be time to tweak your internal processes. Don’t just strive to respond quickly—resolve quickly, too.
- Number of transfers: Few things are more frustrating than being transferred to a new agent and repeating your issue all over again. If transfer occurrence drops, customer satisfaction should rise.
Considering our report found that fast issue resolution was the No. 1 aspect of good customer service, your team’s efficiency in those three areas directly impacts customer satisfaction.
Example: If your negative reviews mainly revolve around agent response time, you may want to consider training employees on how to deliver quicker support. Use software with built-in analytics to observe how well your support team serves customers.
3. It encourages repeat purchases
A satisfied customer is a loyal customer. Our CX Trends Report agrees: 57 percent of consumers say excellent customer service is a factor in their brand loyalty.
How do you know if your customer service is driving customer loyalty? There are two primary ways to find out:
- Conduct polls to gauge buyers’ excitement and likeliness to tell others about your brand.
- Observe customer behavior by tracking repeat purchases, reading reviews, and looking at how customers were referred to your site.
These methods allow you to get input directly from your target market while also seeing how their words compare to their actions.
Example: Customers who repeatedly experience good service in your store are more likely to come back and also encourage their friends to visit.
4. It increases customer lifetime value
Satisfied customers are not only more likely to remain loyal and stick around but they’re also more likely to increase your bottom line. According to our CX Trends Report, more than 90 percent of consumers will spend more with companies that offer streamlined customer experiences.
Example: Even if a coffee shop around the corner is more convenient, customers will be more likely to walk to (and spend money at) a shop that gives them better, more personalized service.
5. It boosts customer acquisition
Great customer service isn’t just important for supporting existing customers; it’s key to attracting new ones, too. Nowadays, consumers expect premium service to be built-in throughout the customer journey—from the first sales or marketing interaction to any support they need down the road.
To position themselves for success, businesses must integrate high-quality customer service into every interaction point.
Example: If a customer receives top-notch support after experiencing a product issue months after purchase, they’re likely to recommend your brand to friends and family.
Why measure customer satisfaction
If you were the captain of a sinking ship, wouldn’t you want to know exactly why you were taking in water? Measuring customer satisfaction is similar. Keeping tabs on how buyers are (and aren’t) satisfied allows you to identify pain points and solve any problems.
Customer satisfaction keeps your business afloat in other ways, too. Improving satisfaction can help identify, attract, and empower loyal customers. But you won’t know how to satisfy your audience unless you start measuring CSAT scores.
When you take a data-centric approach to customer satisfaction, you can:
- Save an unhappy customer from leaving your brand for a competitor.
- Discover customer pain points and learn how to improve your product, service, or overall customer experience.
- Drive repeat purchases by ensuring customer happiness.
- Monitor and improve brand reputation by discovering how likely customers are to recommend your company to a friend.
- Build customer trust by showing customers that their feedback matters.
How to measure customer satisfaction: 4 key metrics
Measuring customer satisfaction is critical to growing your business. It enables you to uncover how well your company’s products and services meet your customers’ expectations. Here’s how to do it.
1. CSAT surveys
CSAT surveys are typically one- to two-question surveys offered at the end of a business transaction. A classic question is, “How satisfied are you with the product?” with answers ranging from “very satisfied” to “very unsatisfied.”
2. Net Promoter Score® (NPS) surveys
The goal of a Net Promoter Score® (NPS) survey is to determine whether customers are promoters, detractors, or passives. To measure this, send a survey asking customers how likely they are to promote your brand on a 1-to-10 scale.
Customer satisfaction scores and Net Promoter Scores are discussed frequently in the CX world. Watch the video to understand how they differ.
3. Customer service data
Collect customer service data around specific features on your site, resolution times, and support requests. If you’re seeing an increase in tickets around a particular task, for example, that’s a sure sign that something needs fixing. You can also infer customer satisfaction from your call resolution rates and average issue-handling time.
4. Quantitative customer satisfaction metrics
To understand customer satisfaction from every angle, perform both qualitative and quantitative research. One qualitative way to understand buyers’ motives and behaviors is through a client advisory group, a panel of customers who meet to discuss your business’ products and services.
How to improve customer satisfaction
The benefits of focusing on customer satisfaction are clear, but truly making customers happy can take some trial and error. The key is persistence. Always aim to go above and beyond for customers, and lean on other departments to help boost your customer experience. Here are a few ways to start improving your customer satisfaction scores.
1. Become obsessed with customer feedback
Become a student of your customer feedback. Don’t just collect it—analyze it and apply it to what your customers are saying. Commit to learning about buyers’ pain points, and then make a plan to alleviate them in ways that set you apart from competitors.
A CRM is a great way to assess your reviews. But even without one, you can still keep close tabs on customer feedback. Social media and online review boards are especially good places to monitor buyer attitudes.
Tip: Use customer feedback software. This tool includes analytics for agent performance and customer surveys, so you can study complaints and compliments about your business.
2. Meet customers where they are
If you need Advil in the middle of the night, you’ll be relieved by the glowing neon sign of a 24-hour drugstore. That’s why customers enjoy places with flexible hours and at-will availability.
To build the same sense of convenience as a brick-and-mortar store online, you must have a digital presence on the platforms your customers already use. Make it easy for buyers to reach out and ask support questions on their channels of choice.
Tip: Offering support via messaging apps (like WhatsApp, Twitter, and Facebook) helps businesses create that same sense of 24-hour availability. These are the same channels customers use to interact with friends and family, so it gives you a chance to meet them where they already are.
3. Deliver fast responses
Our CX Trends Report revealed that 60 percent of buyers have higher customer service standards now than ever before. In a constantly connected world, customers don’t want to have to wait a day—or even more than a few hours—for a response.
Here are some ways to provide faster responses:
- Pre-written responses ensure agents don’t have to write common answers repeatedly.
- Messaging channels enable agents to help more customers at once because they’re communicating asynchronously. Data backs this up: Support teams with the fastest resolution times are 42 percent more likely to be messaging with their customers.
- AI-powered bots can intercept would-be tickets when agents are off the clock.
- Bots can also gather customer details upfront (such as city or account type) before an agent takes over.
Tip: Communication is key. If a customer sends a request when your team isn’t available, they should get an auto-reply saying their message was received. It’s also beneficial to provide an approximate response time, so the customer isn’t left wondering when someone might get back to them.
4. Make customer satisfaction a company-wide focus
To improve overall customer satisfaction, you have to put time and effort into a customer-centric business strategy. You can (and should) incorporate customer satisfaction into your company mission and value proposition. That keeps it top-of-mind with every employee, regardless of their position.
When employees can see the impact of their work and all stakeholders feel committed to a goal, they can achieve high customer satisfaction levels.
Tip: A great first step is using a tool like the balanced scorecard. It guides companies in thinking about their operations from four different perspectives:
- Internal business
- Innovation and learning
It also helps businesses consider how all their activities are working toward the goal of high customer satisfaction.
5. Invest in agent training
Supporting customers starts with supporting your people. Customer service agents are the beating heart of any customer service team, so investing in their professional knowledge and well-being establishes a crucial foundation on which to build your customer satisfaction scores.
According to our Trends Report, companies with high customer satisfaction are 6.4x more likely to have plans to greatly extend education and training opportunities for their support team. As a result, their agents are over 8x more likely to be extremely satisfied with the frequency of training.
Tip: Build a mentorship program for new employees, who can then learn from the best. Reevaluate your customer service training program, too, to see what you can improve or add.
6. Enable customers to help themselves
Consumers today have adopted a “Google-it” mantra. For basic queries, they prefer to find answers themselves online.
Our CX Trends Report found that 70 percent of customers expect companies to have a self-service portal where they can get answers quickly, without having to interact with an agent.
Tip: You can also use an AI-powered chatbot to point customers to help center or knowledge base articles. Customers are increasingly willing to turn to chatbots for simple problems. And more tickets solved by bots mean more time for agents to focus on complex problems.
7. Lead with empathy
If there’s one thing the COVID-19 pandemic taught us, it’s that empathy is an essential skill for support professionals—it’s even more valuable than customer service experience.
Support leaders can provide empathy training, but it’s also a good idea to hire support reps who already possess this soft skill.
Tip: Businesses might also consider allowing agents to make exceptions to certain policies in situations that require customer empathy.
8. Personalize the customer experience
In our Trends Report, 90 percent of consumers said they’ll spend more with companies that personalize the customer service they offer them. Additionally, 68 percent said they expect all experiences to be personalized.
Give agents access to valuable customer information that they can use to improve experiences. With important customer context—such as the previous issue the customer reached out about, how long they’ve been a customer, and what products they’ve purchased—agents can anticipate customer needs and deliver more tailored support.
Tip: Match repeat customers with a dedicated support agent who can help them every time they reach out. This will strengthen their connection to your brand.
9. Provide proactive support
Reactive support used to be the standard: You wait for a customer to contact your business with an inquiry or issue.
Proactive service, however, is now a crucial type of customer service—it means anticipating issues and addressing them before your customers do. For example, an Internet provider may send customers a text about upcoming service disruptions. Or, a software company might add new resources to its help center before a product update.
Tip: Collect customers’ phone numbers so you can immediately alert them of changes or updates.
10. Implement conversational customer service capabilities
Customers hate repeating themselves, and they certainly don’t want to wait on hold while an agent hunts around for information that should be readily available. This is why it’s imperative to excel at conversational customer service—the ability to offer fast, personalized, uninterrupted service across web, mobile, and social apps.
Instead of siloed chats that start and stop each time a customer reaches out (or switches channels), every interaction becomes part of a larger conversation that continues over the customer lifecycle. The result is a seamless experience for buyers and agents alike.
Tip: Teach your agents to use a conversational tone, too. Customers enjoy it when they feel like they’re connecting with a human—not a robot.
11. Build a customer community
A customer community is an online or physical space where buyers can come together to have conversations, answer questions, and share ideas and information. A strong customer community can improve the customer journey and increase trust.
Customers find value in connecting with one another. By doing the work to create a community, you’ll give buyers more opportunities to be successful using your product, and you’ll generate the kind of goodwill that builds brand loyalty.
Tip: You can create a thriving customer community with forum software that enables you to interact with users, facilitate group discussions, and gather valuable feedback.
Customer satisfaction examples
Looking for inspiration? Read on for examples of businesses that excel at satisfying their customers.
- CSAT score: 90%
- Instacart’s data-centric approach allows the company to get to know its customers’ behaviors and build its product accordingly.
Instacart is a same-day grocery delivery service. One way it achieves high customer satisfaction is by having data visibility and agility. In other words, it can access customer data, draw insights from it, and act on it.
Being data-centric enables Instacart to:
- Personalize the service experience: With customer data at its fingertips, Instacart can analyze recent orders to personalize coupons, offers, and future communications.
- Analyze customer attitudes: Data also allows the Instacart team to see how customers behave, including what they respond well to and what they don’t enjoy. They can then make changes to their product from there.
2. Dollar Shave Club
- CSAT score: 96%
- Dollar Shave Club offers an AI-powered chatbot and several support channels, making it easy and convenient for customers to reach out for help.
Dollar Shave Club is one of the first direct-to-consumer subscription services, delivering affordable razors straight to members’ doorsteps every month. The company knew from day one that the only way to nurture legions of loyal subscribers was to provide a world-class support experience.
Here’s what helped the company succeed:
- Meeting customers where they are: Dollar Shave Club provides support over a range of channels—including email, live chat, phone, and Facebook Messenger—to give customers options when they need help.
- AI-powered self-service: Dollar Shave Club also deployed a chatbot to scale its self-service and enable customers to find answers on their own instead of having to contact the support team.
- CSAT score: 95%
- Squarespace provides round-the-clock support to empower its customers throughout their web-hosting journey.
Squarespace gives people the tools and templates to build, host, and promote their brand online. Naturally, Squarespace wants its customers to feel at ease in their digital home and works hard behind the scenes to create a customer experience that’s easy and intuitive, turning even the least Internet-savvy among us into designers of beautiful spaces.
The company does so through:
- Fast, always-on support: Quick, 24/7 support is critical to good customer service, according to consumers. Squarespace offers round-the-clock support and strives to reply to customers in a few minutes via chat and within a few hours on email.
- Coaching and mentorship: Beyond a help center, Squarespace provides coaching and mentorship to help its customers succeed.
4. Pet Lovers Centre
- CSAT score: 93%
- Pet Lovers Centre puts customers first by empowering them to reach out using their preferred method of communication.
Pet Lovers Centre helps pet owners in Southeast Asia take better care of their furry friends. The company knows the bond between owners and their pets is strong, so it strives to make customers feel comfortable and confident during every step of their pet journey. The key to doing so? Providing accessible and comprehensive customer service.
Pet Lovers Centre employs:
- Multiple customer service touchpoints: Pet Lovers Centre adopted an omnichannel customer service approach that empowers customers to find answers independently or contact support using their preferred method—email, phone call, chat, etc.
- Automation and internal collaboration: To keep agents happy and streamline workflows, Pet Lovers Centre automated some manual processes and developed more effective internal communication strategies.
Customer satisfaction tools and software
Customer satisfaction requires a mix of the essential customer service skills and the right software, so companies must provide agents with tools and training to do their jobs well.
Some common customer satisfaction tools and software include:
- Messaging channels like WhatsApp and Facebook Messenger
- A ticketing system that makes it easy to manage customer requests and respond to customers quickly and effectively
- CSAT surveys
- Survey tools (such as SurveyMonkey) that integrate with your customer service software
- Robust customer analytics tools that track engagement and support performance across channels
Top customer satisfaction questions
What does customer satisfaction mean?
Customer satisfaction is a measure of how well your products, services, and overall customer experience meet customer expectations.
Why is customer satisfaction important?
High customer satisfaction can help attract new business, boost retention, and increase sales among your existing customer base. In fact, 73 percent of business leaders report a direct link between their customer service and business performance, according to Zendesk’s 2022 CX Trends Report.
What happens if customers are not satisfied?
Whether a company exceeds or falls short of customer expectations is often directly tied to business success. It’s a high-stakes game—76 percent of customers would now defect to a competitor after just two bad experiences.
How does customer satisfaction help branding
Customer service is the new brand. Companies with high customer satisfaction drive greater loyalty and lifetime value. Zendesk’s CX Trends Report revealed that 60 percent of business leaders believe customer service improves customer retention and 64 percent say it boosts growth.