Customers who are about to make a purchase come with a personal idea of price and quality and expect a certain level of service. The success of the company, the growth of its financial and non-financial indicators just depends on how much it manages to adapt and meet the expectations of the client.
What does CSI evaluate?
Customer Satisfaction Index (abbreviated as CSI), or translated into Russian - this is the “customer satisfaction index”. It is an assessment of customer satisfaction after his interaction with the company. In other words, with the help of CSI, you can find out how successful the experience of visiting a particular company was by a client.
CSI Customer Satisfaction Index measures the following indicators:
- how satisfied is the client with a particular process, service or product of a particular company;
- how satisfied is the customer with the overall interaction withcompany;
- how satisfied is the client with the interaction with the competitor.
A customer who has a high rate of satisfaction from interacting with a company will definitely come back again, make a purchase again, and also recommend the company to their surroundings.
Specialists consider the customer satisfaction index the most used non-financial indicator. Most company executives view CSI as the most reliable non-financial indicator of future financial performance. In other words, the higher the client's CSI level in the present, the more loyal he will be to the company in the future, which means he will again make purchases in the company.
For executives, the CSI customer satisfaction index helps answer one of the most important questions: how loyal are its customers to the company? After all, studies have shown that retaining a current customer is much cheaper for a company than attracting a new one.
Method of collecting information for calculating CSI
In order to collect complete information, both quantitative and qualitative methods must be used.
Polls are actively used. For example, in most companies you can see special buttons with positive and negative ratings. Customers after interacting with the company are invited to make their choice. Surveys are also used to find out the overall customer satisfaction from using a company's product or service. To do this, the client must supplyrating from 1 to 5, where rating 1 indicates complete dissatisfaction and rating 5 indicates complete satisfaction.
Special focus groups can also be used, in which the company's clients participate. A focus group can provide a better idea of customer loy alty.
CSI Customer Satisfaction Index Formula
An example of calculating the CSI index is the equation below.
CSI=sum Wj (Pij - Eij) where:
- k - shows the number of analyzed attributes;
- Wj - shows the weight factor of the attribute;
- Pij - created perception of stimulus i in relation to attribute j;
- Eij - expected level for attribute j, which is the norm of stimulus I.
American Consumer Satisfaction Index
ACSI, or American Consumer Satisfaction Index, shows a rating that is based on an analysis of the desires and expectations of the consumer, how he perceives price and quality. Thanks to this index, companies can measure customer satisfaction not only on a continuous basis, but also on a quarterly basis. The data will be sourced from various customer surveys.
It is worth remembering that large annual surveys, as well as focus group studies, are quite expensive events. Most often, companies resort to short surveys, as they also provide the necessary information about customer satisfaction, but are relatively inexpensive.
Customer Satisfaction IndexNPS
Net Promoter Score or NPS Customer Satisfaction Index literally stands for "net promoter score". This index has been used for the first time since 2003, when it was proposed by F. Reicheld in a business magazine. In his opinion, the willingness to tell and recommend the organization to acquaintances is most connected with the actual loy alty of the client. This willingness is the only indicator of customer loy alty.
NPS index calculation
The method of changing loy alty is based on two questions that are asked to current customers. Former and potential clients are not considered. The first question is: “How likely are you to recommend the company to your family and friends?” The rating is set in the range from 0 to 10, where the value 0 determines the complete reluctance of the client to recommend the company, and the value 10 - his 100% desire to make a recommendation.
Depending on the answer, the client is ranked in one of the groups:
- Clients-promoters. Those who rated 9 or 10. The most loyal customers to the company. The company can expect their recommendation.
- Neutral customers. These are recipients who rated the company with a score of 7 or 8. Such customers are rated as "passive", they can either recommend the company to friends or not.
- Customers-critics. They give the company a score from 0 to 6. Such customers are dissatisfied with the interaction with the company, it is hardly worth expecting a recommendation from them. Rather the opposite.
Customer satisfaction index calculationproduced by subtracting the percentage of "promoters" and "critics". The index shows the level of customer loy alty. The value of the index can vary from -100, if all the surveyed clients were in the "critics" group, to +100, if the situation is reversed.
CSAT customer satisfaction index
Customer Satisfaction Score is an average measure of customer satisfaction. With the help of this index, the client has the opportunity to evaluate the experience of his interaction with the company. For example, some action, including communication with the support service, obtaining additional information or returning a purchased product, can be evaluated by the buyer on a certain scale.
The indicator is measured by conducting a survey among buyers. This can be an automated questionnaire that sounds after a telephone conversation between a manager and a buyer or is sent via SMS or email. The company, sending out a survey, asks the consumer to rate the level of satisfaction with the experience. The scale often ranges from 1 to 5, where a value of 1 indicates that the customer is completely dissatisfied with the service, and a value of 5 indicates that the customer is completely satisfied. The CSAT Customer Satisfaction Score is displayed as the % of customers who scored 5.
CES and SCI indices
Customer Effort Score allows you to analyze the level of effort the client needs to make to resolve his issue when interacting with the organization. The lowerthis indicator, which means that the client makes less effort when interacting with the company, the higher the probability of his loy alty to this company.
The Secure Customer Index shows the level of reliability and confidence in customers. It is most related to the profitability of the company, its market share, as well as the number of regular customers. If the SCI value is less than 0.7, then these clients belong to the "risk" group, if the value is from 0.9 to 1.0, the clients belong to the safe group, in other words, the most loyal ones. Values between 0.7 and 0.9 define clients as neutral.
Remarks
When analyzing customer satisfaction, it is also worth paying attention to some remarks. In satisfying the needs of customers to improve the customer satisfaction index, you need to pay attention to the cost of achieving a high index score.
Fast growing markets today do not guarantee that with high levels of satisfaction index, the company's financial results are secured in the future. Customers may rate a company's product or service highly, but make a purchase from a competitor because the customer's product seemed more profitable or attractive to the customer.
Companies need to analyze the customer satisfaction index using various methods. A large survey conducted once a year may not be enough to complete the picture of consumer loy alty.
Index values to which the company needs tostrive
By analyzing the customer satisfaction index, companies can also analyze the percentage of customer churn. It should not exceed 5%.
The final calculation according to the NPS customer satisfaction index formula should not be lower than 50. It is this value that is positive for the company. The CSAT should be close to 80%.
The level of customer satisfaction can be affected by the reliability of the company, the range and cost of products, the ability to use various credit and installment programs. Also, the client's opinion is influenced by the presence of documentary evidence of the safety of the company's goods. An important parameter is the client's opinion about the service in the company: fast or long, friendly or not. All small factors add up to one single opinion, which is precisely what allows us to analyze consumer satisfaction indices.
