The 5 Most Important KPIs to Track for Customer Satisfaction

Safalta Expert Published by: Vaibhav Kumar Updated Fri, 29 Dec 2023 11:42 AM IST

Highlights

Happy customers are the lifeblood of any business. But measuring their satisfaction isn't just about warm-and-fuzzy feelings – it's about tracking hard data that drives real business results.

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In today's customer satisfaction is more important than ever. Happy customers are more likely to stay loyal, spend more money, and recommend your products or services to others. That's why it's essential to track key performance indicators (KPIs) that measure customer satisfaction. Here's a glimpse into stats and insights for different types of  KPIs.
Average annual revenue growth for companies with strong financial KPIs: 15%, Impact of a 1% increase in net profit margin: 5% increase in shareholder value, Average debt-to-equity ratio for healthy companies: 0.5-1.0, Benchmark for current ratio (liquidity measure): 2:1
Table of Content
What are KPIs?
There are many different types of KPIs, but some of the most common include:
The 5 Most Important KPIs to Track for Customer Satisfaction
Customer Satisfaction (CSAT) Score
KPIs should be SMART:

What are KPIs?

Key performance indicators (KPIs) are measurable values that track progress toward a specific goal. They are used in businesses, organizations, and even in personal development to track progress and success.
Think of KPIs as the gauges on a car's dashboard.

Source: Safalta

Just like the speedometer tells you how fast you're going, the fuel gauge tells you how much gas you have left, and the temperature gauge tells you how hot the engine is, KPIs tell you how your business or organization is doing in terms of achieving its goals.

There are many different types of KPIs, but some of the most common include:

Sales KPIs: These track things like revenue, sales volume, and customer acquisition cost.
Marketing KPIs: These track things like website traffic, leads generated, and conversion rates.
Financial KPIs: These track things like profitability, return on investment (ROI), and cash flow.
Operational KPIs: These track things like productivity, efficiency, and quality.
Customer service KPIs: These track things like customer satisfaction, resolution time, and net promoter score (NPS).

KPIs should be SMART:
Specific: They should be specific enough to be meaningful. For example, "increase sales" is not a specific KPI, but "increase sales by 10% in the next quarter" is.
Measurable: They should be measurable so that you can track progress. For example, "improve customer satisfaction" is not a measurable KPI, but "increase customer satisfaction score by 5 points in the next year" is.
Attainable: They should be attainable, but not too easy. If your KPIs are too easy, they won't be motivating.
Relevant: They should be relevant to your overall goals. If your KPIs are not relevant, they won't help you track progress towards those goals.
Time-bound: They should have a specific timeframe for achievement. For example, "increase sales by 10% by the end of the year" is a time-bound KPI.

By tracking KPIs, you can gain valuable insights into how your business or organization is performing. You can use this information to identify areas for improvement, make better decisions, and achieve your goals.
 

The 5 Most Important KPIs to Track for Customer Satisfaction

There are many different KPIs you can track to measure customer satisfaction, but here are five of the most important:
1.Net Promoter Score (NPS)
The NPS is a measure of customer loyalty. It is calculated by asking customers a single question: "On a scale of 0 to 10, how likely are you to recommend our company to a friend or colleague?" Customers who answer 9 or 10 are considered "promoters," those who answer 7 or 8 are considered "passives," and those who answer 6 or lower are considered "detractors." Your NPS score is calculated by subtracting the percentage of detractors from the percentage of promoters. A good NPS score is 30 or higher.

2. Customer Satisfaction (CSAT) Score
The CSAT score is a measure of how satisfied customers are with a specific interaction, such as a purchase, a customer service experience, or a product launch. It is typically measured on a scale of 1 to 5, with 5 being the most satisfied. Your CSAT score should be tracked over time to identify trends and areas for improvement.


3. Customer Effort Score (CES)
The CES is a measure of how easy it is for customers to do business with you. It is typically measured on a scale of 1 to 5, with 1 being the easiest and 5 being the most difficult. Your CES score should be as low as possible, as this indicates that customers are having a positive experience.

4. Customer Churn Rate
The customer churn rate is the percentage of customers who stop doing business with you in a given period. A high churn rate is a sign that you are losing customers, which can be a major problem for your business. Your goal should be to reduce your churn rate as much as possible.

5. Customer Lifetime Value (CLV)
The CLV is the amount of money a customer is expected to spend with your company over their lifetime. A high CLV is a sign that you are doing a good job of keeping customers happy and coming back for more. Your goal should be to increase your CLV as much as possible.
  In today's customer-centric world, satisfaction reigns supreme. To measure and master it, we wield the mighty KPIs - five key warriors in our arsenal. NPS, the loyalty champion, reveals who sings your praises. CSAT, the interaction guru, gauges post-encounter delight. CES, the ease champion, unveils friction in your customer journey. Churn rate, the defection detector, exposes cracks in your customer's fortress. And CLV, the value oracle, predicts the customer gold waiting to be mined. Track these five, analyze their whispers, and act upon their insights. For in understanding your customers' hearts, lies the true path to satisfaction's promised land. So, arm yourselves with these metrics, champions, and watch your customer kingdom flourish!

Why are customer satisfaction KPIs important?

Happy customers are loyal customers, driving repeat business and positive word-of-mouth. KPIs pinpoint areas for improvement to keep them satisfied and your business thriving.

How can I track these KPIs?

Use surveys, feedback forms, customer support data, and analytics tools to gather customer data and calculate your scores.

What should I do with the results?

Analyze your KPIs to identify strengths and weaknesses in your customer experience. Use them to set goals, prioritize improvements, and track progress over time.

Are there any additional KPIs I should consider?

Absolutely! Depending on your business, industry, and goals, other metrics like resolution times, product adoption rates, and brand sentiment can be valuable.

Where can I learn more about customer satisfaction KPIs?

Online resources, industry reports, and customer experience experts can offer valuable insights and guidance.

What should I do with the results?

Once you have tracked your KPIs, you need to analyze the results to identify areas for improvement. Then, you need to take action to address those areas. For example, if you have a low CES score, you might need to streamline your processes or make your website easier to navigate.

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