Customer Satisfaction Score metric
CSAT Index is a shortened abbreviation of Customer Satisfaction Score – one of the key indicators used to assess user or customer satisfaction with their experience with a product or service. The level of customer satisfaction score directly influences retention, customer acquisition cost, and long-term loyalty to the company brand.
How to calculate CSAT?
The CSAT is calculated based on the data that is provided during customer surveys, answering the questions:
“How would you rate your overall satisfaction with the product or service you received?” A respondent is asked to use a scale from 1 to 5, where: ‘1’ – very dissatisfied and ‘5’ – very satisfied.
The Customer Satisfaction Score is calculated as a percentage, where 100% is maximum customer satisfaction, and 0% is minimum.
The CSAT score is calculated as the number of “5 – very satisfied” and “4 – satisfied” scores with the total number of scores.
(number of “5 – very satisfied” + “4 – satisfied”)/ total number of ratings x 100% = % CSAT.
In addition to the CSAT, we recommend using indicators such as:
- Loyalty Index NPS (Net Promoter Score) – an indicator that characterizes the level of customer loyalty to the brand, and the likelihood of providing a recommendation for interaction with the company
- Index of Customer Effort Score (CES) – an indicator that assesses the ease of achieving the client’s goal when using a product or ordering services.
Mistakes of CSAT measurement
Several common mistakes occur when evaluating and interpreting customer experience indexes (CSAT, NPS, and others).
Drawing conclusions on a small sample of respondents
For example, you have 10,000 customers among whom you conducted a survey. When asked, “How would you rate your overall satisfaction with the product or service you received?” you only have 200 responses, which is not enough for a qualitative assessment of the CSAT index. The accuracy of such an estimate would be no more than 85%, with a margin of error of >5%. For at least 95% confidence (“accuracy”) and a margin of error of 3%, you must have at least 956 responses.
To avoid this error, we suggest using a calculator for planning sociological studies.
Lack of customer segmentation
In our practice, we often meet companies that output a single CSAT or NPS for all clients when conducting research. But suppose you look at the estimates in terms of individual customer segments. In that case, it is very likely they will be different because the needs of each segment and the criteria of customer experience may be different.
A differentiated approach to research and evaluation will allow you not to miss changes in the overall perception of your experience by specific customer segments and react in time to deteriorating results.
The difference between CSAT and NPS
The Customer Satisfaction Score focuses on customer satisfaction from current interactions, while the Net Promoter Score focuses on long-term customer loyalty.
The CSAT allows you to evaluate each of the company’s service elements, such as “Are you satisfied with your visit to our store today?”
NPS answers a customer’s overall perception of their relationship experience with the business.
CSAT and DSAT (Dissatisfaction Score)
Companies mainly focus on determining customer satisfaction scores. Most formulas suggest only satisfaction scores for comparison, rejecting neutral scores and not concentrating on negative scores (NPS, CSAT, CSI, CES). Marketers know frustrated customers tend to share their experience stories, which affects company perceptions actively. The DSAT allows you to bring focus and track the dynamics of those who didn’t like the interaction experience.
Calculating the DSAT is similar to the CSAT or NPS. Only in the numerator do we estimate the amount of negative feedback from our customers. Ideally, the company should try to move “detractors” into brand promoters, but even moving into the neutral customer group will yield good results. Detractors are customers who are more likely to criticize, not recommend, or spread the word about their negative interaction experience. Promoters are customers who act as advocates for your brand, willingly spreading the word about the company’s products and services that shine a good light on them. They are loyal customers.
How to increase the Customer Satisfaction Score?
The first thing to note is the need to systematically measure the level of interaction between a company and its customers. Unfortunately, as our CX Research showed, many companies do not do it systematically and do not have a dedicated function that would deal with this issue.
The customer experience evaluation takes place on an emotional level, although rational factors such as price, distance, and physical properties of goods influence the overall result. Therefore, take care of the following factors:
- Invest in creating a digital user experience. Digitalization of customer interaction reduces bureaucracy and time spent on collecting metrics.
- Set up a channel for feedback from the user to the business. On the one hand, this will allow you to measure experience constantly. On the other, modern customer wants to share their thoughts “immediately.”
- Train your employees to take care of the client’s needs and instruct them how to react in situations when a customer is having “a bad experience.”
- Assure transparent pricing and a wide assortment.
- Provide personalization of communication and service offerings
- Do pleasant and unexpected little trinkets
It is not the complete list of factors, and for each business and customer segment, it should be formed individually.
Disadvantages of CSAT
The disadvantages of using the CSAT are that it focuses on current interactions and does not allow you to assess and predict future behavior. Also, dissatisfied customers participating in surveys can affect the accuracy of the index.
For a comprehensive assessment of customer experience and attitude towards your company, we recommend using a set of 5 key loyalty KPIs and taking advantage of your customer service audits and surveys.
Craft Innovations team can help measure your customers’ loyalty and satisfaction and develop a customized plan to increase your CSAT, NPS, and CES scores. Let’s talk.
We live in a world of stereotypes and behavioral patterns. Look around. Advertising that sets the standards of beauty, dogmas like a business class car must be black, norms of behavior, the system of education, and many others shaping our perception of the world, defining the scope and limits of the permitted.
Not surprisingly, the % of children whose level of creativity is rated as “Genius” drops from 98%, at age 5, to 2% at age 15, according to George Land’s Creativity Test.
So, what can we say about adults?
Types of thinking
There are two types of thinking in humans: Convergent and Divergent.
- Convergent thinking: we evaluate, critique, transform and connect ideas. These processes take place consciously, based on our values and knowledge system.
- Divergent thinking: this is the area of our imagination, inspiration, and ideas coming as if from nowhere, “Ah-ha!” moments. The manifestation is usually unconscious.
Why is it hard to create something NEW?
Although both types of thinking are present in each of us, the most convergent thinking predominates in everyday life. It is also called “rational” thinking. In addition to the coordinates (stereotypes) laid down for us by external sources of information, “rational” human behavior is reinforced by society through “social approval.
Can you think of examples from your own life? Have you ever heard anything similar to:
He’s got it all figured out – he’s a judicious, systematic, reliable person.
He is always full of ideas. The wind in his head. But he is terrible with numbers. He is a “creative person”.
For society, rational behavior is beneficial because it allows better control and prediction of human behavior.
A person dominated by convergent thinking finds it more difficult to move beyond the frame of reference on which he or she relies to make his or her own decisions.
Creativity in business
The nature of competition involves the need to constantly compete for your customer. Companies must regularly develop and implement innovative ideas in products, services, strategies, and business models to win in this competition.
Our innate creativity becomes helpful to differentiate us from our competitors. If new ideas “don’t come to mind,” precisely because of the dominance of convergent thinking, the “box” perception of the industry? The tools which stimulate divergent thinking come to the aid of management. Brainstorming is often used to find new ideas.
Tools for ideation and creativity
Not every brainstorming session is effective!
When people who share the same values, work for the same company and have the same professional stereotypes (market expertise) gather in a room for discussion, there is a high risk of getting hung up on ideas that everyone already knows.
For effective brainstorming and for stimulating divergent thinking, it is recommended to use special techniques, which will be described below.
1. The “Analogy method”
The essence of the method is the search for ideas from other markets, technologies, and types of business that can be adapted for use in your company. To stimulate the process, “analogy cards” are used – sets of cards containing examples from different spheres of life and business. The team’s task is to formulate as many ideas as possible for their company by going through the samples and discussing them.
2. Reverse method
The task of the method is to turn “upside-down” the idea of the accepted standards, to find “wild,” non-standard ideas.
Imagine you need to make a smartphone for blind people. How is it possible?
3. The “Fast track to failure” method
The task of the method is to put you in the consumer’s shoes and think about the product from his point of view.
Step 1: Come up with ideas that will make the experience of using your product or service unbearable for the client.
Step 2. For every negative idea, we create counter-ideas that make the product cool in the eyes of the client.
A good brainstorming session should provide 80-120 ideas on the table.
How do you choose the best ones?
The selection of ideas is sometimes more difficult than creating them itself.
Typical mistakes of this stage:
- Ideas that the leader of the group likes are shortlisted. This person can be either a formal leader or an informal team leader. In both cases, we move to subjective choice rather than teamwork.
- Ideas that we know how to implement are shortlisted. They seem “safe” and optimal to us (convergent thinking). The flip side is that these ideas are usually not new to your market, and you will be repeating what you already do.
- The first idea that everyone liked was selected. The group found an idea everyone agreed on – “That’s it!”, the following ideas are not considered or analyzed superficially. Remember that the first solution does not mean better.
- Lack of uniform selection criteria. Each team member evaluates ideas from his or her perspective. As a result, there is no common basis, which leads to conflicts and misunderstandings.
How to increase the effectiveness of the selection of ideas and reduce the risk of typical mistakes
Each participant individually selects 3-5 ideas that he/she considers promising and marks them with stickers. The TOP 5 ideas, which will get more votes from the group, are used for further work.
2. Now-How-Wow method
A simple tool that allows you to organize ideas into three groups:
- Now – ideas that we can implement in the next 6-12 months and know-how. Often these are not revolutionary ideas but allow us to make incremental improvements to processes or products.
- WoW – inspiring ideas, but they take time, resources, and market conditions to implement. Typically, such ideas are taken out into investment projects and are considered within a 12-36 month time horizon.
- How – the idea looks promising, but we do not know how to implement it technically. It will take time, knowledge, and access to technology to implement. Can be allocated as long-term R&D projects or launched as startups (corporate gas pedals).
3. Criteria matrix
In order to select ideas, a matrix of indicators is created, which are synchronized with the strategic goals of the company/owners. Each indicator is assigned a weighting coefficient. The selected ideas are ranked according to their score.
4. Lateral thinking
(De Bono’s six hats method). Allows a versatile evaluation of an idea. The group uses a role model for discussion.
- Blue hat (1 person) – responsible for the discussion process so that it takes place within the method.
- White hat. At this stage, the group studies facts and figures. The task is to collect as much reliable information as possible to serve as a rational assessment.
- Red Hat. We express our emotional feelings about the ideas. If we don’t like an idea internally, we shouldn’t be silent about it because it will further create internal conflict and reduce engagement.
- Black Hat. Critical Thinking. The task of the group is to find flaws in ideas.
- Yellow Hat. This phase is responsible for finding solutions and benefits to compensate for flaws.
- Green Hat. In the final stage, the group must put their thoughts together.
Then create a modification of each idea considering attitudes, risks, and possibilities that have been discussed earlier.
These are not all the ways that brainstorming sessions can be used to merit results. And, of course, you may have your own ideas.
It is important to remember that the cardinal rule of successful brainstorming is not to criticize the idea! After all, any idea, even a “wild” one, can be the basis for creating a breakthrough solution!
If you feel you need outside help for a quality brainstorming session, contact Craft Innovations. Our experts can help unleash your team’s creativity and find ideas to help you step up!