From the very beginning of engaging with a business, also known as the first touch, customers create an experience that affects their future choices and buying decisions.
Almost 75% of people will choose a brand with a higher customer focus if the quality of goods is equal. And 18% will leave for a competitor after their first touch with poor service. Over the last few years, specifically since the pandemic began, various brands in different sectors including retail banking and pizza delivery have faced problems with their customers' loyalty and willingness to overlook missteps.
Therefore, despite the intangibility of emotional domain and a category such as satisfaction, impressions are important if a company thinks about the following points:
How to Measure Customer Experience? Several metrics are used for this.
If consumers like the product, they can recommend it to their friends and acquaintances. By doing so, consumers will improve the customer loyalty index (NPS, net promoter score), calculated as the difference between positive and critical customers. Interviewees are asked only one question here: "Would you recommend us?" Sometimes the likelihood of a recommendation is asked to be rated on a 1-5 or 1-10 scale.
Together with loyalty, CSI (Customer Satisfaction Index) is calculated, which determines the degree of satisfaction.
After using a service or purchasing a product, individuals may feel that these items meet or exceed their expectations, creating a "wow effect" that characterizes satisfaction. Ideally, it should accompany the whole purchasing procedure, commencing with searching for product details. When there is dissatisfaction, or simply put, when a customer is frustrated, there is a reverse-hate response that can damage reputation.
This index operates by considering the notion that the satisfaction of a store visitor relies on the attributes of acquired item and its significance.
For instance, a man expressed dissatisfaction with the modest packaging. However, since this criterion is not significant to him, he disregards it and the level of discontent is not substantial enough to be significant. It’s a separate issue if there is a pessimistic outlook towards the effectiveness of bought device, especially if it holds significance for this individual.
Researchers from the Stockholm School of Economics first mentioned customer satisfaction index (CSI) as an important non-financial indicator in 1989. Later it developed into the American version of ACSI, which is used less frequently in Russian practice.
Competition in the business world is increasingly focused on delivering an exceptional customer experience. Competitors anticipate the consumer expectations of customers and lure them to them by being highly customer-centric with offering the same assortment. Therefore, companies implement CSI, NPS, CSAT metrics, strive to maintain constant contact with customers to identify opinions, understand and address the causes of dissatisfaction in a timely manner.
By definition, the index is calculated using the following formula:
level of importance of the selected indicator for customers * customers’ assessment of this indicator as applicable to the company's activities * 100%
Interviewees can be initially segmented by social status, gender, age, average earnings, place of purchase, products chosen.
It’s advisable to engage participants who have recently interacted with the available range.It’s advisable to engage participants who have recently interacted with the available range.
The questionnaire usually reveals opinions about: quality characteristics of goods/services, their cost, level of service, after-sales service, compliance with the ideal.
Questions should be clear, simple, and relevant to the business's nature, and should identify the specific person's position. Therefore, the appearance of employees holds little relevance for e-service.
For example, let's take the most common metric — price/quality. Firstly, participants are requested to rate a criterion's importance on a scale of 1 to 10. For example, a pensioner may be more concerned with low price - eight points - and less concerned with breadth of range and quality - five points. And the middle class is more interested in quality - nine points, and the question of cost/cheapness is not so important - four points.
Each characteristic is assessed through an estimation of the level of that characteristic when making purchases at the chosen company. With cheap quality products, the point scores will be close to 10. By the way, the popularity of private labels in grocery retail has a lot to do with it.
Interviewee
Rate the importance of product price (1 to 10).
Rate the importance of product quality (1 to 10).
Pensioner
8
5
Middle management
4
9
How satisfied are you with the quality of our product (1 to 10)
How satisfied you are with the price (1 to 10)
10
Businessman
7
Variations of the methodology also permit the incorporation of weights in the formula to determine the significance of parameter and price concerning each other. Thus, it’s feasible to calculate the proportion of cost to quality, cost to range of products, cost to service, etc. This calculation is contingent on parameters examined.
The procedure is available in several format options, including face-to-face interaction, phone call, online survey, depending on the composition of the interviewees. For example, those in the older generation may be minimally involved in commenting on a company's website.
In a face-to-face or telephone survey, the number of questions should be such that the store visitor or subscriber can answer them quickly, in no more than 10 minutes. Note that every third customer statistically declines to participate in surveys, which should be considered during the planning of marketing events.
How to calculate CSI score based on the above example?
We need to get the average importance of price = (8 + 4) \ 2 (participants, but there may be several hundred or thousands of them) = 6 and multiply by the average grade level = (10+8) \ 2 = 9. This works out to 6 * 9 * 100% = 54%.
Do the same with the quality parameter. (9 + 5) \ 2 = 7 and multiplied by the grade point average = (10+8) \ 2 = 9. That works out to 7 * 9 * 100% = 63%.
Individual characteristics indicate that customers prioritize quality over price, 63% compared to 54% who prioritize the price tag.
The final satisfaction index is calculated with averaging = (54% + 63%) \ 2 (indicators) and results in 58.5%.
Such an affordable yet quality product is a rarity. Hence, there is a possibility of presenting the business with a product range that matches the same level of quality, albeit at a higher price, while avoiding any unfavorable responses. Which probably won't reduce the satisfaction of such consumers, but will increase the company's profits. This is how CSI assists in identifying areas of potential improvement.
Index recalculation studies are conducted periodically after implementing measures to adjust the current index.
Marketers believe that customer satisfaction is the basis for both profit growth and company development. Therefore, the benefits of implementing the index outweigh the drawbacks and associated costs.
CSI satisfaction score allows:
III. analyze the product parameters and identify the most significant ones for customers.
Customer Satisfaction Index involves more calculations and analytical work than NPS or CSAT. The CSAT reveals the interviewee's attitudes toward a single aspect of performance with pre-prepared responses on a simple scale of 1 to 5. The significance of this aspect for consumers is not being considered.
An example of a CSAT survey that requires minimal effort on the part of a respondent:
"How do you feel about the new design of the online store?
The CSI survey is more complex and time-consuming for the respondent, thereby increasing the probability of incomplete responses. Therefore, there is a clear need for additional incentives and motivational measures that will produce quality responses. These can be gifts, bonuses, discounts, coupons, etc.
CSI-index gives an opportunity to carry out segmentation of own users with identification of their preferences and satisfaction, to perform analysis of competitors' products, which makes this tool useful for any business.