Restraint is seldom a marketer’s first instinct. When you see a potential customer who could be surprised or delighted, it’s your instinct to do whatever it takes to make it happen. But in evaluating customer-satisfaction metrics, a little perspective—and restraint—is beneficial.
Customer satisfaction is inextricably tied to perceived value, which means that achieving perfect customer satisfaction is impossible. It would require offering a perfect product, supported by a perfect buying experience, for free.
Even if your product is a hit, “perfect and free” is probably not your business model. Therefore, real-world customer satisfaction becomes a balancing act: You’re trying to maximize the value you get from your customers while also delivering enough value so that they’re satisfied with the exchange, stick around and, ideally, tell others about it.
Here are four principles to consider when putting your customer-satisfaction (CSAT) scores into perspective:
1. CSAT IS RELATIVE.
Your customer-satisfaction scores mean most compared to those of your direct competitors, as this MIT Sloan Management Review study illustrates. That means you can survive with mediocre ACSI scores (American Customer Satisfaction Index; the leading such metric) in an industry with generally low marks—as long as you’re best in class, you’re probably fine. But if you’re in a category where your rivals are battling to outdo one another in customer delight, be prepared to pony up.
Don’t forget that, over time, consistently over-delivering against customer expectations will simply reset those expectations. What may be a market differentiator for you or your competitors right now may not be in a year or two.
2. CSAT IS TEMPORAL.
Customer-satisfaction surveys capture sentiment related to a specific interaction or purchase. They’re snapshots, accurate in terms of their depiction of a singular moment, such as a purchase experience or call-center interaction, but not meant to reflect your broader relationship to the customer, nor the entirety of the customer’s journey. They can be useful in determining how a given facet of your larger operation was perceived, but shouldn’t be mistaken as a summary of the customer’s overall feelings about your brand.
This call for context is also useful to remember if your brand suffers a misstep or is forced to make a change that will yield short-term blowback. For example, customers revolted last year when century-old outdoor retailer L.L. Bean scaled back its lifetime return policy. But the sentiment softened as time passed and customers realized that Bean’s modified policy still offered exceptional value, even in a category where competitors such as Patagonia, Osprey, and Filson also offer generous warranties.
3. THE LINK BETWEEN CSAT AND THE BOTTOM LINE ISN’T STRONG.
The MIT Sloan study found that CSAT correlates only marginally with share-of-wallet, and often has an inverse relationship with market share—in other words, market leaders often trail their smaller rivals in CSAT. That means going all-in to improve your ACSI scores isn’t likely to turn your business into a juggernaut. And it means you shouldn’t panic if your scores dip.
As with any experience metric, there is likely to be some element of “lag,” where it takes time for improved offerings to actually be reflected in your scores. Consider tracking external events, too; anything that affects your industry (such as bad weather delaying deliveries) will also be reflected in scores, so a temporary dip may just be that: temporary. Look toward trends over time rather than chasing a specific number.
4. CSAT IS MOST POWERFUL WHEN COMBINED WITH OPERATIONAL DATA.
It helps to identify just how much a CSAT increase is worth to your organization, particularly when comparing multiple touchpoints in your customer’s journey. Understanding what really drives your customers to deliver more value while keeping your cost-to-serve under control is what ultimately brings the best results.
Customer-satisfaction surveys are part of the toolset you can use to nurture healthy, long-term relationships with your valued customers. But it’s important to consider them in context: CSAT scores reflect on individual moments within a broader customer journey, and don’t tell the full story of a customer relationship on their own.
Leonie Brown is the Experience Management Scientist at Qualtrics.