Everything you need to know about customer satisfaction

You might have an idea about customer satisfaction, but do you really know what goes into satisfying customers? Do you understand the difference between customer satisfaction, customer experience, and customer service? What about the correlation between employee satisfaction and customer satisfaction?

If you’re hesitant about any of the above answers or have a thirst for knowledge, have no fear: We’re going to answer all of the above and more in this blog post, including some commonly asked questions about our data. We are, after all, the American Customer Satisfaction Index (ACSI).

What’s the difference between customer satisfaction, customer service, and customer experience?

Customer service is an element of the customer experience, and both can contribute to overall customer satisfaction.

To break it down, let’s say you’re a customer shopping in a grocery store. An employee helps you locate chips in aisle three, then a cashier helps you during the checkout process. Both interactions are customer service elements of the customer experience, but the overall satisfaction is more than that: It includes the cleanliness of the store, the price you paid for those chips, etc.

Sometimes, customer service doesn’t factor into customer satisfaction or customers provide their own services. For example, shoppers may use the self check-out option instead of speaking directly with a cashier.

Customer satisfaction can also occur with a specific product. For example, how did those chips you bought taste? Were there enough in the bag to justify the cost?

While nuanced and somewhat intertwined, satisfaction, service, and experience play different roles.

Does employee satisfaction impact customer satisfaction?

The correlation between employee and customer satisfaction is closer than you think. Both are part of the value chain. For companies, customer satisfaction starts with the company’s products or services. Drilling down further, there’s the quality of the employee’s service or quality of the manufacturing. And all of that flows back up to investors; good products/services mean more customers and more money.

The happier your employees are, the better service they’ll provide, which means you’ll have happier customers. If customers are happy, they’re more likely to be repeat shoppers and generate more revenue for the company. This leads to higher stock prices, bigger returns on investment, and happier shareholders. And (the smart companies) can turn that capital around to give employees bigger benefits, which in turn makes them, and their customers, even happier.

Basically, satisfied employees equal satisfied customers, which equals satisfied investors.

However, the opposite happens, too. If employees aren’t as happy, then they may not treat each other or customers as well (compared to competitors). Quality of products and services may go down, causing stock value to drop, then there’s less cash to utilize.

It’s the circle of life.

What are a few things any company can do to improve customer satisfaction?

The secret is: There’s no secret. Because every company and situation is different, there’s no “one thing” companies can do to improve customer satisfaction. However employee satisfaction is the keystone of any positive customer experience, as explained above.

A common denominator among companies with low customer satisfaction scores is they typically have unsatisfied employees. Mismanagement is another theme. If products or services were performing well and then changes to business strategy impacted the performance, that can influence customer satisfaction.

Greed is another pitfall. Specifically, profit-taking during mergers and acquisitions. Often the first step to please shareholders is to cut costs, which typically starts with labor costs and downsizing. That means there may not be enough employees to help, which means service can suffer. Even if staff provide high-quality service, there may not be enough bodies to handle requests, which then causes satisfaction to dive.

That’s the exact opposite of what should be done. Investing in employees can create happier customers, which means they’ll stick around and keep their money in your pockets.

Bottom line: Consider your employees as you consider your customers, and satisfaction is likely to follow.

Is customer satisfaction a bigger priority or focus for companies now?

In 25 years since the ACSI was founded there have been shifts in customer satisfaction; however, there haven’t been many changes in the last decade or so.

Customer experiences have a greater portion of businesses’ attention, particularly on the end-to-end experience. We’re starting to see a growing interest around metrics, which help companies determine where best to allocate resources to improve their operations or products. But just because a business collects customer satisfaction data, doesn’t mean they will make good decisions based on it.

What are some major changes in customer experience?

We’re living in a digital world. Now, companies need to be concerned about their online presence, creating mobile-friendly options, and the power of the internet. Companies need a good website and the ability to do business online, whatever that business may be. For retail, that means having clothing for sale; for travel, that means booking flight reservations efficiently; for banking, that means setting up automatic bill pay options.

Finding that balance between digital and brick and mortar is the latest obsession in satisfying customers. Companies can set themselves apart by customizing the experience to meet individual needs. That may mean having store pickup or a great website. Offering different incentives to keep customers coming back can help improve the overall experience.

The digital experience is the heart and soul of transformation: Companies need to understand different customers’ needs and interests and develop a range of options to accommodate.

While customers are more self-sufficient in this digital world and that tends to increase customer satisfaction — more service required, the lower the customer satisfaction — there is a caveat: If there’s a problem, all of this goes out the window.

If customers run into a snag on the website or have trouble getting answers in a live chat, it can negatively impact overall customer experience. In fact, call center satisfaction tends to rate at the bottom of most industry benchmarks.

What goes into the ACSI’s measurement and methodology?

 The ACSI’s process has been extensively tested for over 25 years. While we can’t reveal all the details, we use an econometric model developed at the University of Michigan’s Ross School of Business. It factors in customer expectations, perceived quality, perceived value, complaints, loyalty, retention, and more criteria.

There are also specific benchmarks relevant to each industry’s products and services, whether that’s website satisfaction, battery life for cell phones, seat comfort for airlines, or speed of service for restaurants.

For more on the science that goes into measuring customer satisfaction, check out this chart on our website.

 How are companies selected for the ACSI’s reports?

The ACSI conducts its syndicated research independent of any of the companies measured. Inclusion is based solely on market share, meaning the companies included are of sufficient size to meet sample size thresholds that create statistically reliable data.

No company is included or excluded based on the company’s request, though companies can hire the ACSI to do an in-depth customer satisfaction analysis.

What’s the sample size collected in your studies?

Based on our advanced Partial Least Squares (PLS) structural equation modeling methodology, the ACSI can achieve statistically reliable results from a range of 100 to 250 respondents per company each quarter. Sample sizes at the industry and company level are not defined arbitrarily; using a historical database of nearly 3 million interviews and a Bayesian statistical procedure, sample sizes are adjusted based on prior information about data variance and stability.

How do I obtain access to specific company scores?

Full confidential data sets for a particular company or industry are only available to ACSI clients. For more information on how to subscribe and what that entails, please contact Tina Dettloff.

I don’t see my company among the list of measured companies; can I get an ACSI score to compare among the industry and my competitors?

The ACSI offers proprietary solutions that allow any organization to obtain data via the same survey methodology the ACSI utilizes across all industries. Companies will be provided with metrics calculated for the corresponding industry with apples-to-apples benchmarking opportunities. That’s the beauty of our national, cross-industry measurement! For more details contact Tina.

 

If you have any other questions, leave a comment below and we’ll be sure to get back to you — and possibly include it in another FAQ post.

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