All About Customer Satisfaction (CSAT): What It Is and How to Measure It

How can you tell if your customers are happy?

Do you count their smiling faces? Check their 5-star reviews? Or wait and see how many come back as return shoppers?

These methods may be a good start, but tracking CSAT scores is one of the most effective ways of measuring customer satisfaction. To successfully convert customers into brand advocates, it’s important to know what CSAT is and how to leverage this customer satisfaction metric.

What does CSAT stand for?

CSAT stands for Customer Satisfaction Score. CSAT is a real-time key performance indicator that shows how satisfied customers are with a company’s products or services. CSAT scores are based on customer feedback and are measured using a survey that contains questions like:

• How would you rate your experience with our tool?
• How satisfied are you with the agent you spoke to today?
• How happy are you with our service?

A CSAT question uses a rating scale that gives customers a range of possible survey responses. Each company chooses the range it wants. The most common format is 1 — 5, but it’s not uncommon to choose a range from 1 — 7 or 1 — 10. To keep things simple, we’ll use the 1 — 5 scale in our examples.  

Each number on the scale represents the following levels of customer satisfaction:

1- Very Dissatisfied

2- Dissatisfied

3- Neutral

4- Satisfied

5- Very Satisfied

As you can see, a CSAT score reflects customer satisfaction levels. But when creating survey questions, remember that you want respondents to choose the highest score possible. So when asking something like How would you rate your experience? the most desirable answer (“Very Satisfied”) should be matched up to the highest score.

Craving more info on how to get happy customers? Check out these 5 Tips on How to Increase Customer Satisfaction.

How to calculate CSAT

Calculating your company’s CSAT isn’t difficult. Remember, your CSAT survey will include questions with a range of possible answers, like in the example below:

How satisfied are you with our company?

1- Very Dissatisfied

2- Dissatisfied

3- Neither Satisfied nor Dissatisfied

4- Satisfied

5- Very Satisfied

To calculate your CSAT score, you’ll first need to tally the number of positive responses that you received. A positive response is one that scored either 4 (“Satisfied”) or 5 (“Very Satisfied”). Next, simply take this number of positive responses and divide it by the number of all responses.

Let’s say that in our survey, the total number of responses is 300, and the number of positive answers is 240 for this particular question.

240/300=0.8

Now, multiply the number you received (0.8) by 100.

0.8*100=80

The CSAT score is expressed as a percentage, so your CSAT score in this case equals 80%. Well done!

What is a good CSAT score?

Results vary by industry, but a good CSAT score is typically between 75-80%. This means that at least 3 out of 4 customers gave you a positive score. 

Here is a breakdown of 2023 industry averages from the American Customer Satisfaction Index (ACSI):

Internet providers: 64

Social media: 71

Online news: 73

Streaming: 74

Hotels: 75

Online search: 75

Airlines: 76

Fast food restaurants: 76

Online travel: 76

Specialty retail: 77

Automobiles: 78

Banks: 78

Software: 78

Apparel: 79

Cell phones: 79

Ecommerce: 80

A good benchmark for a CSAT response rate — which measures how many people respond to your survey —  is above 25%. The average response rate for CSAT surveys across all industries and companies is about 15%.

PRO TIP: To increase the number of customers responding to your CSAT survey, make the entire process hassle-free. Rewarding customers who complete your survey (exclusive discounts, anyone?) is also worth considering.

How do you collect CSAT scores?

Now that you know what CSAT means, let’s figure out how to use it. As we mentioned before, the fastest way to measure your CSAT score is to provide customers with a customer satisfaction survey. 

Four useful methods for getting CSAT scores are:

1. Email surveys

This is the most common way to request CSAT scores from customers. Despite lower response rates, email surveys offer deep insights since they often ask more questions.

2. Post-chat surveys‍

If you want to maximize your response rate, you should consider CSAT surveys in your website’s chat widget. You can integrate a feedback bar into your chat and automatically ask shoppers a single question. Customers will share their opinions while still using and engaging with your site. 

3. In-app surveys

Automation tools aren’t limited to traditional chat. Companies can ask simple questions over mobile apps, social media platforms, and even SMS to ensure customers can leave CSAT feedback on their preferred channels.

4. Follow-up calls

‍These typically take place after a customer has placed an order. They’re an effective way of collecting information about customer satisfaction because your customer’s experience is still fresh in their mind. Calling immediately after an interaction is a great idea, but it may be more suitable to wait up to a few hours before calling as well. One of the biggest challenges here is that customers must be willing to offer their phone number and answer your call.

Building a CSAT survey that gets results

When creating a CSAT survey, follow these 3 steps to make it as efficient as possible:

1. The shorter, the better‍

Go with short surveys and use basic templates. Your customer won’t want to spend more than a couple of minutes on it. Usually, 3-4 questions are all you need.

2. Keep everything simple‍

A survey that’s easy to follow is more likely to be completed all the way through. That's why you should keep your questions simple and straightforward. 

3. Let customers stay neutral‍

Creating a survey with an odd-numbered scale gives customers a chance to give a neutral response. This is useful when they don’t know the answer or can’t make up their minds.

When should you measure your CSAT score?

Measuring CSAT is straightforward. There are 3 approaches you can take regarding how often you should ask about customer satisfaction.

1. After every single interaction‍

This is the most common way of measuring CSAT scores. Survey your customers after a transaction, a conversation with a customer support agent, or any other interaction. This way, you get a response when the customer can still recall the exchange clearly, making it easier for you to impact the customer journey. The best part? Automation solutions can trigger these CSAT questions and handle this repetitive work on your team’s behalf.

2. After several customer interactions‍

Sometimes, customers will have multiple interactions with your team. There’s no point bombarding them with multiple CSAT questions after every interaction — that'll just lead to more unhappy customers. Instead, wait for your shoppers to handle all of their issues and then choose the right touchpoints to send the CSAT survey.

3. Monthly or quarterly‍

You don't have to measure overall customer satisfaction right away. The CSAT metric is good for making immediate improvements, but if you’re aiming for the bigger picture, you can always send customers surveys periodically. Ask them about their general feelings towards the company and their overall impression of it.

Remember that the frequency of your CSAT surveys depends on what you’re evaluating. If it’s a product, give your customers enough time to get to know it fully. If you’re evaluating customer support or sales, ask about their satisfaction immediately.

Why is CSAT important?

Tracking CSAT scores lets you follow customer sentiment and improve your business based on customer feedback. You should be able to get more satisfied customers, and satisfied customers turn into loyal customers. These are the people you need to make your business grow.

However, CSAT benefits companies in many other ways.

Benefits of tracking CSAT

Measuring CSAT scores lets companies:

• Easily meet — and surpass — customer expectations
• Pinpoint and address critical issues organization-wide
• Harness a metric that’s universally understood
• Reduce customer churn and foster greater loyalty
• Elevate the overall customer experience
• Boost customer lifetime value

It’s hard to put a price on customer satisfaction, but it’s not hard to imagine the problems your business could face if it had dissatisfied customers. Consider these facts related to customer satisfaction:

• 80% of consumers have stopped doing business with a company due to poor customer service
• 13% of unsatisfied customers are likely to tell 15 or more people that they’re dissatisfied with a business
• It takes up to 12 positive customer service experiences to make up for 1 negative one

These numbers are reason enough to keep an eye on customer satisfaction within your business and measure your CSAT score. It’s also worth knowing that it costs 5 times more to acquire a new customer than retain an existing one, so keep those customers satisfied.

CSAT vs NPS, CSAT vs CES

CSAT isn’t the only metric that allows you to understand how customers feel about your product, services, and company. It may be the most popular option out there, but NPS and CES are other important scores that can measure customer satisfaction.

What is NPS?

NPS stands for Net Promoter Score. What does that mean? It’s a measure of customer loyalty over time and focuses on customer referrals.

How does NPS measure customer loyalty? An NPS survey usually asks a single question: 

How likely are you to recommend this product to a friend?

An NPS survey normally uses a 0—10 scale, with 0 meaning “Very Unlikely” and 10 meaning “Very Likely.”

Customers who answer 9 or 10 are your brand's promoters, while those who score 0 to 6 are your detractors.

The questions on an NPS survey are different from those found on a CSAT survey. A high CSAT score shows you have several satisfied customers, but if only a few recommend you, your NPS score remains low.

What are the other differences between NPS and CSAT? NPS:

• Measures customer loyalty and satisfaction over time
• Doesn’t measure satisfaction after an individual interaction
• Helps a company improve customer loyalty, reduce churn, and increase customer retention and word-of-mouth

Want to know more about NPS? Here are 5 Tips How to Improve Your Net Promoter Score.

What is CES?

A third metric is known as CES, which stands for Customer Effort Score. It measures how easy or difficult it is to interact with a company and its products/services. A typical CES survey presents customers with questions like:

• Was it easy to handle your issue today?
• How convenient is it to use our tool?
• How would you rate the effort it takes to use our feature?

Next to each question, customers can choose between a series of options that range between “Very Difficult” and “Very Easy.”

A CES score measures how easy a specific transaction or task is. Companies that conduct CES surveys can:

• Limit the spread of negative word of mouth
• Keep customer service costs down
• Improve self-service channels so customers can solve their own problems
• Enhance the overall customer experience by keeping satisfaction high

When to use CSAT vs NPS vs CES

Choosing between a CSAT, NPS, or CES survey isn’t a complicated decision. Remember, they all measure different KPIs.

Always keep the following question in mind — why am I conducting this customer survey?

The main goal isn’t to gather data. It’s to measure the level of customer satisfaction and to improve it by eliminating pain points.

Selecting the right metric depends on many different factors. There are many different views on which to choose, but it usually comes down to these basic points:

• CSAT is great for keeping track of all services and products and replacing anything that doesn’t work.
• NPS helps you measure and understand customer loyalty.
• CES is ideal for identifying and fixing certain areas of customer friction.
• Using a combination of these 3 metrics will give you the best results.
• Choose CSAT if you don't have a strong preference for any of the given ways to measure customer satisfaction. It's simple enough that everyone can understand it.

Keeping customers happy

Measuring CSAT is a powerful way to learn about your customers and how they feel regarding your company, services, and products. It’s the first step to improving your organization in meaningful ways — and automation software can help.

AI customer service solutions can boost CSAT by 12%. And finding the right tool doesn’t have to be overwhelming. Our ebook, Finding the Right Customer Service Automation Software, offers a roadmap for finding the perfect tool for your business’s needs, along with pocket resources to take with you in your search.