6 Ways To Measure Customer Satisfaction

Philip Cleave
January 25, 2023
Another satisfied customer

Savvy business leaders enhance customer satisfaction by tracking several mission-critical key performance indicators (KPIs).

Businesses lose valuable loyal customers every day. To remedy this issue, top-performing enterprises leverage customer satisfaction data to find hidden opportunities for improvement.

80% of consumers will stop choosing your offering over your competitor’s after one bad customer service experience, according to a recent HubSpot Research study. Beyond that, 86% consumers are willing to pay more for a better customer experience.

You can retain consumer loyalty by monitoring and measuring important customer satisfaction KPIs and eliminating service-related pain points.

Why measuring customer satisfaction is so important

We’ll start by defining what customer satisfaction is. Basically, customer satisfaction measures whether your product, service and overall experience exceeds the customer’s expectations or falls short.

It may seem obvious that having happy customers is a good thing. Understanding just how important it really is may be difficult to articulate what that really means for a business. Hubspot shows how companies that focus on customer satisfaction grow while those that fall short in that category don’t.

Growing companies are prioritizing customer satisfaction

Does your company prioritise customer satisfaction? If you’re nodding your head yes, are you 100% sure? Under half of consumers who were surveyed by that same Hubspot report feel the companies they purchase from actually care about customer satisfaction.

Feedback is the fuel behind customer satisfaction

From their initial awareness and consideration of your products and services, to first purchase, retention and advocacy, ensuring your customers are satisfied at every stage is crucial to turning them into loyal, long term brand advocates. Effective and timely feedback is essential.

Find out more

KPI’s to measure customer satisfaction

There are a number of different KPI’s to track in order to understand how satisfied your customers are and what you need to do to strengthen those efforts.

1. Customer Satisfaction Score (CSAT)

The customer satisfaction score is, as its name implies, a measurement of how satisfied customers are with your offerings and service. It’s a tool to measure how a customer feels at the moment. The customer satisfaction score is the most common method used to gauge consumer sentiment.

You can calculate CSAT using a scale of 1-3 to 1-10 and anything in between. When collecting responses, ask consumers how satisfied they are with your offering or service – with one being highly unsatisfied and the top number of the scale being highly satisfied. Calculate the customer satisfaction score by adding the sum of all responses and dividing it by the number of all respondents.

Measuring customer satisfaction

2. Customer Effort Score (CES)

CES is an indicator of customer loyalty. The customer effort score works the same way as the CSAT score. However, employees will ask customers about the ease of their experience when collecting data for this metric. The experience could relate to making a purchase, finding out information or resolving an issue.

The customer effort calculation is still a measure of customer satisfaction, but it focuses specifically on customer convenience. The reason for monitoring your organisation’s CES is that, ideally, the easier it is for customers to interact with your brand, the more they will enjoy their experience. By making it easy to do business with your organisation, you can maintain customer satisfaction and loyalty.

3. Net Promoter Score (NPS)

Net Promoter Score is a way of monitoring how likely consumers are to recommend your offering to a friend or co-worker. It’s a way of measuring customer satisfaction and loyalty as well as overall satisfaction – rather than how a customer feels about your offering solely in the moment.

You can use the responses from your CSAT for this metric – categorising 0-6 responses as detractors, 7-8 responses as passes and 9-10 responses as promoters. Calculate your organisation’s whole number NPS by subtracting the percentage of detractors from the percentage of promoters (or use our NPS calculator to do the leg work for you).

Range of net promoter scores

4. Customer Retention Rate

The customer retention rate is your organisation’s ability to retain paying buyers. It costs 5 to 25 times more to procure a new customer than it does to retain an existing buyer. Resultantly, this is a critical customer satisfaction metric.

Calculate the customer retention rate weekly, monthly or annually, depending on your organisation’s sales volume. The customer retention rate formula is:

((CE-CN) /CS)) x 100

CE is the number of new customers at the end of a cycle. CN is the total number of new customers acquired during the cycle, and CS is the number of customers at the beginning of the cycle.


This metric is a combined measurement of service and quality. SERVQUAL is one of the most widely used methods for evaluating the personal elements of customer service quality. Collect data for SERVQUAL by soliciting a scaled response on RATER qualities:

  • Reliability
  • Assurance
  • Tangibles
  • Empathy
  • Responsiveness

SERVQUAL monitoring will help you differentiate the quality of service that your organization delivers from the quality that your customers expect.

6. Churn rate

Churn rate is a measurement of how many customers you lose during a cycle. If your organisation has a churn rate higher than 5% to 7%, you must identify and correct the issue.

This measurement is another metric where sales volume informs measurement cycles. For example, organisations with a large customer base may want to review their churn rate every month, while smaller organisations may re-examine this metric annually or semi-annually.

The churn rate formula is:

((The number of customers at the start of a cycle) minus (the number of customers at the end of a period) divided by (the number of customers at the end of the cycle.))

Collecting customer satisfaction data

Now that we know what customer satisfaction KPI’s we need to measure, it’s important to put the right data collection and analysis in place to make the necessary improvements.

First, collecting customer satisfaction data is a necessary step in trying to understand where a business can make improvements. Using customer survey tools like SmartSurvey is one of the most effective means of measuring these data points. They are easy for consumers to quickly fill out and don’t rely on customer support representatives to collect the data by asking a number of questions.

Social media is a great source for collecting customer insights. Social media listening tools, like Mention, allow businesses to identify consumers who mention the brand and engage them. Is a particular customer unhappy and sharing it with the social media world? Engage them immediately to work through their issue and turn an upset customer into a satisfied one.

You’ve determined the right questions to ask and collected the raw data from multiple sources. Now, it’s time to analyse that data to determine what your customers actually think of their experience with your brand and what improvements you can make. Using market research analytics dashboards, like datapine, allows businesses to visualise raw data from multiple sources. You may find that a large percentage of your customers are dissatisfied with your customer support process or that your Net Promoter Score has decreased over the last six months.

Wrapping up

To promote sustainable operations, organizations must measure and react to customer sentiment. KPIs enable you to develop a comprehensive understanding of how consumers feel about your offering. By tracking critical KPIs, you can keep your enterprise on course and promote long-term success.

Get started and create your first survey

If you would like more information then please get in touch.