What is Customer Satisfaction (CSAT) Score – Definition, Calculation, Benefits, and More

Ever wondered why companies such as Amazon or IKEA focus so much on customer experience? Why do they keep on improving themselves to meet customer expectations every day?

Well, it’s a very simple answer- they care about customer satisfaction! 

Believe me, it’s extremely important. In fact, satisfied customers bring 67% more repeat business compared to new customers.  

But how do you get to know your customers’ satisfaction levels? 

→ Enter the CSAT metric! 

What is the CSAT Score?

CSAT stands for Customer Satisfaction Score. It’s a CX metric used by businesses to measure how satisfied customers are with their products, services, or overall experience. It is measured using CSAT tools that ask customers to rate their satisfaction on a scale, often ranging from 1 to 5 or from very unsatisfied to very satisfied. 

Businesses use CSAT scores to track customer satisfaction over time, identify areas for improvement, and make data-driven decisions to enhance the customer experience.

And yes, an ideal CSAT software automates the entire process and even suggests what actions should be taken to improve customer satisfaction.

Now you know how to deploy CSAT surveys and measure customer satisfaction! However, the question of calculating these scores still remains.

How is the CSAT Score Calculated?

To calculate CSAT Score, from a scale of 1-5, only responses of 4 and 5 are included in the calculation. This approach is based on research showing that using the two highest values on feedback surveys is the most accurate predictor of customer retention.

The formula to calculate CSAT is:

For example: If you receive 200 survey responses and 150 customers rate their satisfaction as 4 or 5, the CSAT calculation would be:

(150 satisfied customers / 200 survey responses) x 100 = 75% CSAT

This means that 75% of the surveyed customers are satisfied with the product or service.

Now you know how to calculate your CSAT score but is it a good score? 

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What is Considered a Good CSAT Score?

So you have deployed your CSAT surveys, gathered the responses, and even calculated the scores. But how do you know if your CSAT score is good or not? 

This is where benchmarking enters the picture. Benchmarking your CSAT score involves comparing your score against industry standards, competitors, or your own historical data to assess performance and identify areas for improvement. 

But to give you an idea of whether a CSAT score is good or not: 

• Above 80% is considered awesome denoting your business has the highest number of satisfied customers.
• 60- 80% is considered good as this range suggests that your business has more satisfied customers. 
• 40-60% is considered average with some space for improvement. 
• 0-40% is not considered a good score because it shows that your business has more unsatisfied customers than satisfied. 

Something to note – if your CSAT score is increasing, then you are on the right track. And to keep at it, you should make measuring CSAT a routine habit in your CX program, where you measure it regularly at various touchpoints in the customer journey.

And remember, every industry has a different benchmark. So, here are some examples of what is a good CSAT score by industry: 

CSAT Score by Industry:

What is a Good CSAT Score for SaaS?

A good CSAT for Software as a Service (SaaS) companies can vary, but generally, a CSAT score of 77% or higher is considered good in the SaaS industry. This indicates a high level of customer satisfaction with the SaaS product and service.

When Should You Send a CSAT Survey?

Custom satisfaction surveys are quick and effortless surveys that gather in-the-moment feedback at key touchpoints across the customer journey.

It can be a major business ally when used strategically and deployed at important points of customer interactions. But the timing of sending the surveys is very important. 

Your customer’s experiences should be recent and fresh in their mind so that they can give you honest and unbiased answers. 

Let’s take a typical example of a B2B SaaS customer journey from awareness to purchase to renewal.

• After webinar

Sending a CSAT survey after hosting the webinar allows you to evaluate your webinar’s success and assess if the customer has moved from the awareness to the consideration stage.

• After product purchase

Sending a CSAT survey after selling the product and before handing over the customer to the customer success manager helps you evaluate your after-sales performance. 

• After onboarding

Sending a survey after the onboarding helps you evaluate the customer’s onboarding experience and if there is anything that you need to improve and where. 

• Product feature adoption

Sending a CSAT survey after the release of any product update gives you insights into how well your customers are adopting the new features and if they like them. You can do this using an in-app survey only after the user has tried the feature.

• After customer support

Sending a CSAT survey right after a customer interaction is the most efficient and simplest way to understand how effective your customer support is and if your customers are getting the support they are looking for.

• Before renewal/ repurchase

Sending a CSAT survey before a certain period of renewal will help you identify how happy your customers are with your product. And if they are unhappy, it gives you enough time to evaluate their feedback and take the required actions on it.

The timing of CSAT surveys should align with key touchpoints in the customer journey to capture feedback when it’s most relevant and actionable for improving customer satisfaction and loyalty.

How Can You Improve Your CSAT Score and Ensure Customer Satisfaction?

Here are 6 strategies that you can follow in order to improve customer satisfaction:

1. Make Feedback Actionable: Act on customer feedback promptly by addressing issues, implementing suggestions, and communicating improvements to show that their input is valued.
2. Personalize the Customer Experience: Tailor interactions and offerings to each customer’s preferences, history, and needs, creating a more engaging and relevant experience. 
3. Quick Customer Support: Provide timely, efficient, and empathetic support through various channels, ensuring that customers feel heard and supported throughout their journey.
4. Measure and Track Progress: Regularly assess customer satisfaction levels, gather feedback, and track key metrics to identify trends, and areas for improvement, and measure the impact of implemented changes.
5. Make It Easy for Customers to Reach Out: Offer multiple communication channels, such as phone, email, chat, and social media, with streamlined processes for quick resolution of inquiries and issues.
6. Address Negative Feedback: Addressing negative feedback enhances CSAT by demonstrating a commitment to customer care, and building trust. This proactive approach can turn a dissatisfied customer into a loyal advocate by improving their experience.
7. Customer Centricity: Put customers at the center of decision-making processes, design products/services around their needs, and prioritize their satisfaction to foster long-term loyalty and advocacy.

By focusing on these strategies, you can work towards improving your CSAT score and building stronger relationships with your customers.

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CSAT vs NPS vs CES – When to Use Which CX Metric?

CSAT, NPS, and CES are three different customer experience metrics used by businesses to measure different aspects of customer satisfaction and loyalty. Here’s a brief overview of each:

CSAT:

CSAT measures a customer’s satisfaction with a specific interaction, transaction, or experience. It’s best to send CSAT surveys immediately after the interaction, such as after a support call or a purchase, to capture real-time feedback on the customer’s satisfaction level.

NPS:

NPS gauges overall customer loyalty and the likelihood of recommending a company to others. It’s usually sent periodically, such as quarterly or annually, to assess long-term customer sentiment and advocacy.

CES:

CES evaluates the ease of completing a task or resolving an issue. It’s typically sent after customers have interacted with a company’s support services or faced a significant task, helping measure the effectiveness of processes and systems in reducing customer effort.

In summary, CSAT measures satisfaction with a specific interaction, NPS measures loyalty and advocacy – basically, the overall relationship and CES measures the ease of the customer experience. These metrics can be used together to gain a comprehensive understanding of the customer journey, identify areas for improvement, and drive strategic decisions to enhance overall customer satisfaction and loyalty.

Conclusion

A good CSAT score is more than just a number; it’s a reflection of your customer’s experiences and perceptions of your products or services and can be enhanced with continuous betterment efforts. Understanding what constitutes a good CSAT score and how to measure it is crucial for businesses aiming to improve customer satisfaction. 

And to know more about your customer satisfaction levels and the CSAT score, all you need is a robust tool like SurveySensum! It enables you to create surveys in just under 5 minutes. And not just that, it also employs AI-enabled features that automate the feedback and analysis process.