Businesses that are customer-centric are focused on providing the highest standard of measure Customer Satisfaction , which is directly tied to the customer experience. A customer’s perception of your brand, combined with their thoughts and feelings, leads to desired behaviors such as repeat purchases or referrals.
When customers have an emotional connection with your brand, it means your business has provided great service. But how do we measure whether our business has hit the mark when it comes to customer service?
The answer is customer satisfaction. For SaaS companies in particular, customer satisfaction is a predictor for customer retention, which is important when you consider how much cheaper it is to retain existing customers than acquire new ones. SaaS companies are intensely interested in whether their current customers are satisfied and likely to stick around.
1. Introduction to customer satisfaction
Customer satisfaction is a customer satisfaction metric used to find out how satisfied customers are with your products and brand. When customers are satisfied, this is likely to lead to increased loyalty and more spending.
Therefore, customer satisfaction is a way of measuring customer happiness. It’s hard at the best of times to gauge how customers feel about your business, but customer satisfaction metrics lead to better insight and actionable data.
Following this thread means that you can gain a true picture of your customers’ state of mind and make more effective business decisions that increase customer satisfaction overall.
2. Why is measuring customer satisfaction important?
Measuring customer satisfaction is important because it is directly tied to revenue. The more satisfied a customer is, the more likely they are to make a repeat purchase, make larger purchases, and are less likely to churn.
For SaaS businesses, they need to analyze their customer’s perception of their brand in order to impact the key metric of customer retention. When customers aren’t happy with the service they have received, they vote with their wallets and take this business elsewhere.
Therefore, it is vital for SaaS businesses to pour their resources into retaining more customers. Before it is too late, your business can measure customer satisfaction to find out whether action is needed to prevent churn. If customer satisfaction is too low, businesses can intervene to improve the customer experience and boost retention.
3. Different ways to measure customer satisfaction
Net Promoter Score (NPS)
The first way you can measure customer satisfaction is the Net Promoter Score. Customer satisfaction leads to loyalty and NPS measures loyalty. It asks a simple question related to how likely a customer is to recommend a product or brand, and rates the answer on a score of between one and ten.
Customers are then classified into the following groups:
- Detractors (0-6)
- Passives (7-8)
- Promotors (9-10)
If a customer is a promoter, then you know they are highly satisfied with your business overall. You can focus on giving customers more of what they want, while striving to bring Passives and Detractors to a higher satisfaction level.
Customer Satisfaction Score (CSAT)
Customer Satisfaction Score is a direct measure of customer satisfaction because it asks customers, “How satisfied are you with the service today?” Customers rate their answer according to the following scale:
- Very unsatisfied
- Very satisfied
This survey gives SaaS businesses a glimpse into the happiness levels of a customer at a particular moment in time. If customers are very satisfied then you know your business has done a good job, and if your customer is neutral or below then you know you have some work to do.
Customer Effort Score (CES)
Customer Effort Score measures the effort customers go through to have an interaction with your business, with less effort resulting in more satisfying experiences. When Customer Effort Score is low, this means customers find it easy to interact with your business and get the help they need. CES is measured on a scale of one to seven, with one being the lowest and seven being the highest.
4. Analyzing the Survey results
Once you’ve decided on which survey best measures customer satisfaction for your business, it’s time to execute the survey and analyze the results.
Analyzing and interpreting the results
It’s important to remember that the results might not always mean what you think they mean. You need to take context into account in order to correctly interpret your survey and gain true insight. Wait a decent length of time for the results to come in to ensure customers have had enough time to fill out your survey.
Taking action based on the results
Whether the result is positive, negative, or a mixture of both, the whole survey will be pointless if you don’t take action on what you have learned. The goal of conducting a customer satisfaction survey is to improve some aspect of your business, not simply to pay lip service to the idea of gathering feedback.
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Continuously improving customer satisfaction
What satisfies customers one month may not continue to satisfy them in a year. It’s important to continuously iterate when monitoring customer satisfaction. Ensuring customers get the most out of your products and service. To keep providing value through your subscription software, consistently improving is key and conducting customer satisfaction surveys. It will keep your finger on the pulse of your customers.
5. Conclusion and key takeaways
Customers who are satisfied spend more and remain more loyal to your business. You can’t grow a successful SaaS product without achieving customer satisfaction and ensuring customers see the value in their subscription plan. Customer happiness makes the difference between customers who renew and those who simply churn and look elsewhere.
That’s why you’ll want to gather feedback through NPS, CSAT, and CES. Each survey type provides unique insights into the state of customer satisfaction and can be used at particular times to gather feedback. A mixture of all three provides the deepest knowledge into the state of the customer.
SaaS companies in particular will want to keep customer satisfaction. High combined with a low turnover of customers in order to remain profitable.