The Customer Satisfaction Index (CSI) is a far more specific way of measuring customer satisfaction than the similar-sounding CSAT score. As you’ve probably guessed, CSI measures how satisfied your customers are, but the most important thing about it is that it’s built on metrics of the key things about your business that matter to your customers.
Because it is composed of several elements, you can even produce scores that place greater emphasis on an element that’s crucial to overall customer satisfaction. Overall, your customer satisfaction index not only indicates how happy your customers are, but also shows you what makes them happy.
Read our guide to customer service.
Why Knowing Your Customer Satisfaction Index Means a Lot to Your Business
While it’s common knowledge that happy customers are a good thing, it’s still worth reminding yourself of the reasons why they’re such an important asset to your business. So, before we dive into calculating CSI, let’s do just that. Satisfied customers are important because:
- There’s a far better chance they’ll support your business again. This raises customer lifetime value. In other words, each customer you win brings in more revenue over the medium to long term.
- They’re more likely to recommend you to people they know. Happy customers are ready to share the love. When someone they know expresses a need similar to the one that led them to you, they’ll be quick to help out with a recommendation.
- You improve your competitive advantage, without reducing prices. People are willing to pay more for products that leave them feeling good. In addition, a lot of businesses are failing in the customer satisfaction stakes. Get this win, and you can beat them easily.
The bottom line is this: If you don’t have satisfied customers but have a great product, you will lose out to businesses with a similar, better, or even a lower-quality product if they leave customers feeling more satisfied about their experiences than you do.
How to Calculate Your Customer Satisfaction Index
Let’s kick off with a very simplified example. Through market research, a SaaS company has determined that the most important contributors to customer satisfaction are:
- Pricing
- User friendliness
- Unique technical features
- Good customer support services
They can find out how customers feel about each of these elements and express it as a percentage. For example, 80 percent of customers are happy with pricing, 60 percent think the product is user-friendly, 70 percent like the features, and 90 percent feel positive about customer support.
The average percentage could represent a customer satisfaction index. However, it will only do so effectively if each element is equally important to their customers. To make the customer satisfaction index measurement meaningful, you need to know which of the measurements matter most to customers and weight the score toward that feature.
Developing a Weighted Customer Satisfaction Index
Mathematically, it’s easy to give one element greater weight than others. Let’s say price is the most important feature for customers, and it is 20 percent more important than other elements you’ve included in your customer satisfaction index.
Instead of calculating a straightforward average between all scores, you can give pricing more weight than the other elements when calculating overall customer satisfaction. Because of weighting, the overall score will more accurately reflect the extent to which customer satisfaction is impacted.
Tips for Implementing a Customer Satisfaction Index as a Key Metric
Metrics are worthless unless you choose the right things to measure, align them with your strategic goals, and aim for continuous improvement. So, our first tip is to embrace this metric as an important indicator and get your team on board. Next, it’s time for some brainstorming and research.
Learn What Matters to Customers
You may know why customers buy your product and like your business, but you may be less certain about what they see as the most important keys to satisfaction. Your best customers fit the profile you would like all your customers to have, so ask them to help you out by ranking attributes you’ve identified and asking if they have any additional comments. To get a good response rate, consider offering them a little incentive.
Apply Measurements Consistently And Look For Omissions
It may be worth analysing customer satisfaction and asking for input at different stages of the customer journey. In addition, whenever something you do changes, find out how it affects customer satisfaction. Remember that some things change without you having done anything.
For example, a SaaS product that was best-in-class six months ago may no longer occupy the top spot in customer perceptions now. Applied an update? Find out whether customers are satisfied with your efforts. As time goes on, you can refine the elements you implement in your customer satisfaction index to get increasingly accurate measurements and gain a deeper understanding of how you can work to keep your customers happy.
Compare Your CSI Score to Sales Performance and Churn
If you’re scoring sky-high on your CSI but are still losing customers, you may need to revise your opinions on what you are measuring. Monitoring how customers move through your sales funnel and noting areas where you lose prospects may indicate an important customer satisfaction element you are not yet considering. Losing converted customers may not be a sign of dissatisfaction, but it is worth finding out if it is.
Listen to Your Customers
Having a customer satisfaction metric that offers a fair idea of how happy or unhappy your customers are and gives you clues as to why is all very well. Still, good old-fashioned listening can tell you much more.
In today’s world, where remote transactions and automated communications are the norm, it’s easy to lose touch with the real people who support your business. Your customer satisfaction index can give you an overview of how they feel, but the most valuable intelligence still comes from in-person interaction.
Having dedicated customer service agents equipped with software that allows you to identify common customer issues helps you learn what matters to customers. For every person who takes the time to talk to your representatives, there may be ten or more who simply give up and walk away dissatisfied.
RSVP: Because it Takes People To Understand People
Metrics like the customer satisfaction index are great ways to benchmark your positioning and measure progress toward new heights, but there are people behind the numbers. It takes people to understand people and build connections.
With RSVP, you can understand your customers like never before. It is fully scalable, equipped with the latest tech, and, most importantly, staffed by caring people who will represent your brand as well or better than you could yourself.
Learn about your customers and what matters to them. Act on the information, and see your customer satisfaction index soar. Customer service outsourcing could be the best thing you ever did for your business. Contact us today and let’s work together to boost customer satisfaction, loyalty, and, of course, your sales.