Definition: Customer satisfaction is a measure of how well a product, service, or overall experience meets or exceeds the expectations and needs of customers. It indicates the level of contentment or happiness customers have with their interactions, purchases, or ongoing relationships with a business.
Measurement: Customer satisfaction can be assessed through various methods, including surveys, feedback forms, customer ratings, and reviews. Common metrics used to measure customer satisfaction include Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES).
(Customers Classified as Satisfied)/(Total Customers) or (Average of all Customer Rating)
Benchmark: Benchmarking customer satisfaction is often done by comparing the scores or ratings obtained from customer satisfaction surveys against industry standards or competitors’ performance. The benchmark can vary depending on the industry and customer expectations, but higher scores or ratings generally indicate higher customer satisfaction.
Importance: Customer satisfaction plays a vital role in the success and growth of a business. Satisfied customers are more likely to become loyal, repeat customers, refer others to the business, and provide positive word-of-mouth. It helps in building customer trust, improving customer retention rates, and fostering long-term relationships, ultimately leading to business sustainability and profitability.
Alternate Terms: CSAT, Customer happiness, Client satisfaction, Customer contentment.