How to Measure Customer Satisfaction for Small Businesses

Customer satisfaction metrics are a good way to measure the health of your business, and detect and fix problems. If you’re a small business owner, you may measure customer satisfaction on a daily basis by how you interact with customers. But if you’re looking for something more measurable and specific, or if you don’t interact directly with customers as much as you used to, you may be wondering how to measure customer satisfaction in a way that is exact, repeatable, and which makes sense for small business. There are several ways to do this, and which you choose will depend on your business and your customers.

How to Measure Customer Satisfaction for Small Business

The three most common ways to measure customer satisfaction are the Net Promoter Score^℠ (NPS^®), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES). Each of these are simple, straightforward, quantitative, and repeatable, which will allow you to set benchmarks and regularly assess how you’re doing.

All of these customer satisfaction metrics can be collected via email, but there are other creative ways of accomplishing this as well. Whichever measurement you choose and however you collect responses, you’ll need to collect enough responses to draw accurate conclusions. The more responses you get, the more accurate your conclusions will be.

When you are seeking responses, emphasize that the answers are anonymous and only used internally. You might use a giveaway or a discount to incentivize responses, but remind customers that you are looking for honest assessments, and they do not have to respond positively to claim the reward.

Finally, your customer satisfaction metrics can give you a quantitative view of how your customers feel, but they won’t show why customers feel that way. Be prepared to get in-depth with your customers to solve problems, either with a follow-up survey, interview, or requests for additional responses.

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NPS: Net Promoter Score

The Net Promoter Score is generally considered to be one of the most accurate measurements of customers’ satisfaction. The Net Promoter Score first appeared in 2003 in the Harvard Business Review and was developed by Fred Reichheld, Bain & Company, Inc., and Satmetrix Systems, Inc. as a meaningful measurement of customer loyalty. It’s now used by companies large and small, and it’s been found to correlate with other important metrics beyond customer satisfaction, including customer spending, income growth, and customer retention.

Your Net Promoter Score is calculated based on customer responses to a simple question: “How likely is it that you would recommend our company (or product or service) to a friend or colleague?” These responses are measured on a 1 through 10 score. Customers responding with a six or less are considered “detractors,” sevens or eights are “neutral,” and nines or tens are “promoters.” Your total Net Promoter Score is then calculated as a percentage using the following formula.

Net Promoter Score = % of Promoters – % of Detractors

% of Promoters = # of Promoters / Total Respondents

% of Detractors = # of Detractors / Total Respondents

The Net Promoter Score is considered a good indicator of how customers feel about your brand overall, which makes it a good way to measure customer satisfaction for small business at any stage. Generally, any positive score is good, but it’s helpful to compare your score to others in your industry. Industries with a heavy emphasis on customer service, for example hotels, should have a higher score than others.

How to Measure NPS for Small Business

NPS scores are most commonly collected via email. This allows you to gather responses and calculate your score quickly. However, you could also measure customer satisfaction using NPS through a paper or mail survey, text messages, a survey on a receipt, an in-store kiosk, or meetings with clients.

Measuring customer satisfaction with NPS will give you a good idea of how customers feel about your business. Put a plan in place to not only measure customer satisfaction, but also improve it. If you receive a large number of dissatisfied responses, you’ll know you need to improve your experience, and perhaps dig deeper to find specific problems. If you receive mostly neutral responses, you’ll know you need to do something extra to make your business stand out. If you receive a number of high responses, pinpoint what customers enjoy and focus on this strength.

CSAT: Customer Satisfaction Score

The Customer Satisfaction Score, or CSAT, is a good way to measure customer satisfaction about a specific item. If you want to know how customers feel about a particular product, new service, the check-out experience, or something else, the CSAT is a good way to measure it.

The CSAT is very similar to NPS, except you can set the score. You might measure customer satisfaction on a scale from 1 to 3, 5 or 10. The question changes slightly to “how would you rate your overall satisfaction with X?” where X is whatever specific item you’re wondering about. Like NPS, CSAT is calculated as a percentage, but the calculation is slightly different. CSAT scores use only the topmost responses, so your percentage calculation would look something like this:

( [number of responses answering 4 or 5 out of 5] / [total number of responses] ) x 100

How to Measure CSAT for Small Business

When measuring customer satisfaction using CSAT, it’s important to collect the score in a way that makes sense for the item you’re studying. For example, if you’re asking about an online checkout experience, you should use a follow-up email immediately after checkout. If you’re asking about customer service at a restaurant, you might include the survey on a receipt. Make sure your CSAT score collection method is relevant, timely, and easy for customers to understand.

Remember that CSAT is a good measurement about customer satisfaction with a specific product, service, or process, but not necessarily a good measurement of overall customer satisfaction. Choose the item you’re measuring carefully, and make sure this is clear to your customers. Make sure you have a plan in place for using the results that you get, and for taking another measurement at a later date to measure improvement.

CES: Customer Effort Score

The Customer Effort Score, or CES, is similar to CSAT. It looks at a particular process and asks a customer about their satisfaction using a numeric value between 1 and 5 or 1 and 7. However, the goal of CES is to uncover and solve problems rather than create an outstanding customer experience.

The CES measurement tool is based on the theory that the effects of negative customer experiences have a greater negative impact than positive experiences have a positive impact, and therefore negative experiences should be addressed first. A CES question might look like, “how easy or difficult was it to complete your online order?” or “would you agree or disagree with this statement: My problem was easily resolved?” Then, customers can respond with varying levels of ease and difficulty, or agreement and disagreement. It’s helpful to use emoji or color coding to make the responses clear.

CES has also been shown to correlate with overall customer loyalty, especially when the CES is used to assess key processes, like checkout, ordering, answering customer questions or resolving complaints. When customers have a difficult time with these key processes, they’re more likely to switch to a competitor, and therefore less loyal to your business.

How to Measure CES for Small Business

Like the previous scores mentioned, CES responses are most often collected via email, but you can use other methods, as long as they are relevant to the process you are asking about. Once you’ve collected as many responses as you can, average them out to find your score (numeric total of all responses / total number of responses provided). In the above picture, if “strongly disagree” has a value of 1 and “strongly agree” has a value of 5, then an average of 2 would show most customers are finding the checkout process difficult.

It’s helpful to ask a follow-up qualitative question in the CES survey, so you can learn more about what is going wrong or what is helpful. You might ask a question like “what would you change?” or “what was difficult?” This will help you to make effective changes to the process.

No matter how you measure customer satisfaction for small business, it’s important to assess regularly, even if you consistently get good scores. It’s also important to have a plan in place for improvement. Many customer satisfaction surveys can only tell you how customers feel, but not necessarily why they feel that way. Asking follow-up questions, doing user testing or focus groups, and taking a hard look at your business can give you the details you need to make valuable changes.