How to Measure Customer Satisfaction for Your Business

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If there’s one thing that’s bad for business, it’s unhappy customers. When your customers are frustrated with the quality of your products, services, or support team, they’re likely to ditch your company for a competitor — unless you can help resolve their issues satisfactorily.

But how do you even know if your customers are happy or not? The answer is: You keep track of customer satisfaction. By analyzing the data, you can figure out what you need to do to make your customers happier with your business. Of course, that leaves the question of how to measure customer satisfaction in the first place.

That’s just what we’ll be discussing on this page. Keep reading to learn more about measuring customer satisfaction.

What is customer satisfaction?

Customer satisfaction is a measurement of how well your company meets your customers’ standards. If you do everything right and they have no complaints about your products or services, your customer satisfaction will be extremely high. But if you aren’t living up to their expectations, it will be a lot lower.

Why is it important to measure customer satisfaction?

Customer satisfaction is important for a fairly obvious reason—if your customers aren’t happy with your business, they probably won’t continue to be customers for long. Unhappy customers mean less revenue, which is a problem.

That’s why measuring customer satisfaction is so important. By knowing when and why your customers are dissatisfied, you can resolve the issues they’re experiencing, retaining more customers and keeping your revenue from taking a hit.

Important customer satisfaction metrics to track

For your customer satisfaction data to mean anything, it has to be quantifiable. That means you should track your customer satisfaction by looking at specific metrics. But what metrics are those?

Here are a few customer satisfaction indicators to track:

1. Customer satisfaction (CSAT)

All of the metrics on this list can help you measure customer satisfaction. However, there’s actually a metric called customer satisfaction, or CSAT.

The customer satisfaction score involves simply asking your customers how satisfied they are (typically on a scale of 1 to 5). Then you just calculate the percentage of people who were satisfied (which usually means the people who answered with either a 4 or a 5), and there you go — your CSAT.

As a formula, it looks like this:

CSAT = number of satisfied responses / total number of responses x 100

2. Customer effort score (CES)

Customer effort score (CES) measures how easy it is for customers to complete tasks related to your business, such as making a purchase or signing up for a free trial.

In terms of how you measure it, it’s very similar to CSAT. You send out a survey asking customers to rate how easily they were able to complete a task, and then you use the same formula as CSAT to determine what percentage of those customers gave a positive response.

3. Net promoter score (NPS)

Net promoter score (NPS) assesses how likely your customers are to recommend your business to others. Like with the previous two metrics, you determine this by sending out a survey. Specifically, you should ask customers to give their answers using a scale of 1 to 10.

With NPS, anything below a 7 is considered a negative response, and those customers are considered detractors. People who answer with a 7 or 8 are considered passives, while people who answer with a 9 or 10 are considered promoters.

To calculate your NPS, you use the following formula:

NPS = percentage of promoters – percentage of detractors

For an NPS to be considered good, it must be above zero. The higher it is, though, the better.

4. Customer churn rate (CCR)

Customer churn rate, or CCR, refers to the percentage of your customers that leave your business in a given period of time. Unlike the other metrics listed here, this one doesn’t involve any customer surveys. You simply keep track of how many people stop being customers over time.

As a formula, it looks like this:

CCR = number of customers lost / total number of customers x 100

If your churn rate is high, you should put together a strategy to improve customer satisfaction, which will lead to improved customer retention.

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Methods for measuring customer satisfaction

Now that you know which metrics to track, let’s talk about how to measure customer satisfaction. How do you actually track those metrics? What are the best ways to monitor the satisfaction of your customer base?

Here are four methods to consider using:

1. Send out surveys

Probably the best way to track customer satisfaction is to send out surveys to ask your customers directly. This shouldn’t be surprising since we already mentioned this as a good method for gathering several of the metrics listed above.

There are numerous ways to do this. One method is to direct users to a survey page after they make a purchase on your website. Another is to send them an email a few days later. Whatever channel you use, though, sending out surveys is a great method. Just be sure that your surveys are short and easy to fill out.

2. Track engagement metrics

Another way to gauge how satisfied your customers are is to track how they engage with your business. For example, you can track things like how they navigate your website or how often they reorder your products. Or, if you provide services to long-term clients, you can track churn rate, as we talked about earlier.

If you see a lot of customers losing engagement or becoming frustrated, you know you need to make some changes.

3. Read reviews

Online reviews are a huge help to potential customers when they’re trying to decide on a purchase. But they can also be a big help to businesses like yours. Your reviews will give you a pretty clear picture of what your customers think of you. If they have any complaints, you’ll be able to find those complaints in their reviews.

Use online reviews to figure out exactly what you’re doing well and what needs improvement to make your customers happier. If you don’t have any online reviews, consider encouraging your customers to leave some for you, either on your own site or on third-party sites like Amazon or The Yellow Pages.

4. Monitor social media

Not all reviews are posted in official forums. A lot of people prefer to vent their feelings about businesses through social media. Sometimes, people will post positive things, but a lot of them will be negative. That might not be what you want to hear, but it’s a big help when it comes to figuring out what could make your customers happier.

To take advantage of that, be sure to monitor social media platforms for mentions of your brand. When you see people posting about you, check out what they’re saying, and then factor that into your considerations when looking for things to improve in your business.

Use Nutshell to help you track and improve customer satisfaction

When you use the practices outlined on this page, you’ll end up with a lot of customer satisfaction data — and you’ll need somewhere to put it. That’s why you should be sure to use a customer relationship management (CRM) platform like Nutshell.

Not only can Nutshell help you store and analyze your data, but it can also help you send out emails and organize marketing campaigns to help improve customer satisfaction. Plus, it’s affordable and comes with the support of an excellent customer service team.

Interested in trying out Nutshell? Just check out our 14-day free trial today!

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