Customer satisfaction is closely correlated with customer retention and revenue. Any business that wishes to continuously improve its sales and achieve new sales KPIs needs to adopt a customer-centric culture within its organization.

Numerous studies have shown that businesses that focus on improving their customer service perform better financially and bring in more revenue than those who don’t. In addition to that, a study by Accenture found that poor customer service costs U.S. companies a total of $1.6 trillion each year.

This is because customers are willing to abandon companies that they were loyal to if the customer service or experience isn’t up to par. Losing loyal customers is very detrimental to any business, as loyal customers often purchase more than the average customer, their purchase orders have a higher value, and they even tend to bring in new customers thanks to positive word-of-mouth recommendations or online reviews.

As you may know, acquiring new customers is between 5-25 times more expensive than retaining existing customers. Thus, the best thing any business can do is strive to improve its customer service and experiences to reduce customer churn.


What is Customer Satisfaction?

Customer satisfaction can be defined as the level of satisfaction that a customer has with your business, product, and services. The main goal of every business should be to meet these expectations or surpass them.

How to Measure/Monitor Customer Satisfaction

There are numerous ways to measure customer satisfaction. Generally, businesses make use of different customer satisfaction surveys that measure different metrics. Please note that no single metric is a perfect indicator of how satisfied your customers are.

Your best bet is to measure and monitor all of the below-mentioned satisfaction metrics to get an idea of how your customers’ satisfaction is fluctuating over time.

Customer Satisfaction Score (CSAT)

Customer satisfaction score is measured by asking your customers how they would rate their experience with your business/product/customer service department. The typical rating scale can range from very unsatisfactory to very satisfactory.

The higher the score, the better.

Net Promoter Score (NPS)

Net promoter score surveys ask your customers how likely they are to recommend your business or product to others, on a scale of 1 to 10. Based on their rating, customers are then divided into three different groups – the promoters, the neutrals, and the detractors.

To calculate your NPS, you have to subtract the percentage of detractors from your promoters. The higher your score, the better.

Customer Effort Score (CES)

To calculate the customer effort score, ask your customers how difficult (on a scale of 1 to 5) it was to get from point A to point B. This could mean how difficult it was to purchase your product, how difficult it was to contact customer service, or how difficult it was to resolve a problem with your customer service department.

In this case, the lower the score, the better.

Where to Ask for Feedback

Now that you know what kinds of questions you should be asking, it is also important to ask these questions on appropriate platforms.

Most SaaS businesses send out in-app surveys, while other e-commerce businesses send out automated email surveys, utilize surveys in their email signatures, or at the end of live chat conversations.


What is Customer Retention?

Customer Retention

Customer retention can be defined as a business’s ability to retain customers over a specific period. Alternatively, retention can be defined as the actions a business takes to prevent customer churn.

High customer retention indicates that your customers continue to return to your business to purchase more products or services, rather than defecting to the competition or abandoning your products altogether.

How to Measure Customer Retention

To calculate customer retention, you’ll need three pieces of information:

  1. The number of customers at the end of a period (E)
  2. The number of new customers acquired during that period (N)
  3. The number of customers at the start of that period (S)

The formula for calculating the customer retention rate is: ((E-N)/S)*100.

In essence, you need to subtract N from E and divide that number by the total number of customers at the start of the period. Finally, you multiply that number by 100.


How are Customer Satisfaction, Retention, and Revenue Intertwined?

Customer satisfaction directly impacts customer retention, which directly affects revenue.

The more satisfied your customers are, the more likely they are to remain loyal to your company. This means purchasing from you repeatedly, trusting that your products will bring them value, and acting as brand ambassadors that are keen to share their positive experiences with your business with their peers, friends, and family.

The more you engage with your customers, and can retain them through impeccable service and experiences, the higher lifetime value they will have. As such, satisfying your customers should be your number one priority.

If your business isn’t customer-centric, your customers will likely abandon you. It takes only 1-3 negative customer experiences for a customer to abandon ship and warn others about the shortcomings of your business.

Not only is it more expensive to acquire new customers, but it’s also harder when there are negative reviews about your business circulating online. The more frustrated your customers are, the more they will address their concerns on review sites and your social media profiles, warding off potential customers.

Thus, the best way to increase your revenue without breaking your acquisition budget is to focus on providing the best experiences for your customers. The experiences have to be seamless across all channels and show the customer that they are valued at all points of sale and contact.


3 Tips for Keeping Customer Satisfaction High

Customer Satisfaction

There are many ways to keep customers satisfied. We could make a very long list of what your customers expect and consider to be good service. However, we believe that all of the efforts that you put into bettering your customer’s experience can be filed under one of these 3 methods.

Fast, Personalized Service

According to Forrester, respecting a customer’s time is one of the most important things that a business can do. Customers are impatient and want their problems resolved as quickly as possible.

Thus, it’s important to provide them with a multitude of channels that they can use to contact you and receive speedy responses. As a general rule of thumb, you should have an active email address, phone number, and live chat where your customers can contact you. In addition to that, you should answer your customer’s queries on social media and do your best to provide them with self-service options, such as a comprehensive FAQ section, a knowledge base, or a robust customer portal.

Apart from providing your customers with speedy service, you should always strive to tailor each customer experience to your customer’s needs. This means personalizing the communication from start to finish, based on the information you’ve collected about each of your customers.

This information should be easily accessible by all support agents, so they can view it before assisting your customer, or in real-time. Your support representatives should have access to everything from past purchase history to past communications, as well as general contact information.

Having this information at the ready will allow you to provide your customers with knowledgeable and speedy service which, in essence, is all that customers want.

Help Customer Derive Value from Your Product or Service

Customer Value

The next thing you should aim to do is to monitor your customer’s usage and satisfaction with your product. You can do this by monitoring customer engagement. The more engaged your customers are with your product, the better, as the chances of them churning are lower.

If your customers see value in your product, they’ll continue using it. As such, you should assign a designated customer success manager to every important client. This manager will monitor usage and engagement, provide training, and help your customers reach their business goals with your product.

If your customers don’t derive value from your product, they’ll likely churn, as it makes no sense paying for a product or service that has no real value.

Reduce Customer Effort

The last way to improve customer satisfaction is to reduce customer effort. Map out the entire buying process as well as the steps towards contacting customer service. Make note of what steps the customer has to take, and how long each step takes.

If the customer has to register for an account before purchasing your product, it could be too much effort for them, resulting in an abandoned cart. Thus, it’s important to review all the steps in your purchase process to see if they are all necessary. If not, remove them.

The same rules apply when it comes to contacting your customer support. If your customers have to search your website extensively for some contact information, you’re in trouble.

Just the other day I was trying to contact an airline for a flight refund due to COVID-19, and they didn’t have any contact information on their site. The only way to reach the airline was through a call center, that didn’t provide toll-free numbers, and charged high prices per minute. My initial thoughts were that this was a sinister way to make money off of affected customers.

Next, I contacted the airline on Instagram, as it’s one of the few social media I have and still received no answer, 48 hours later. If your company is like this, it’s bound to anger and disappoint your customers.

Make sure that they always have a way to contact you, and don’t have to put in a ton of effort to do so.



Customer satisfaction directly impacts the revenue and profitability of a company. As such, all businesses, regardless of the industry they’re in, should strive to keep their customer satisfaction high. Our recommendation is to measure and monitor satisfaction and create strategies that will help you continuously improve the service and experiences you’re providing.

The best thing you can do is value your customers and their time, which you can show by providing speedy, knowledgeable, and personalized service. In addition to that, it’s important to reduce customer effort and create a seamless omnichannel experience for your customers, regardless of the communication or sales channel they use to get in contact with your business or to purchase your products.

In the end, it’s all about keeping your customers happy, so that they don’t churn and turn to the competition. By keeping them happy and showing them the value of your products, they’ll remain loyal to your business, have a higher lifetime customer value, and even bring in more customers by sharing their positive experiences with your business online, or through positive word-of-mouth recommendations.