According to the Customer Service Report 2018 by LiveChat, the average customer satisfaction dropped by almost 3% in 2017 compared to the previous year.

In 2018, it was at only 83.5%.

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I don't want to worry you, but the report is based on data from over 21,000 companies representing 22 industries using live chat and tickets for customer service and sales. All in all, we've analyzed data from 334 million chats and 17 million tickets, so I think we can trust the outcome.

To be clear, it's not my intention to scream here and there about how bad things are in customer service. But it's my job to let you know about the state of things and offer immediate advice on how to work on them. Are you ready for some improvements?

The Reasons Why Customer Satisfaction Metrics Are Down

In 2017, businesses experienced an 8% increase per business in chat demand in comparison to 2016. This means that for every 100 customers contacting these companies, there are now an additional 8 customers requesting live chat assistance every month.

You can work with the existing resources on your team to improve your customer service and level of customer satisfaction — so read on to find out how.

1. Your first response time needs help.

People might think they can do several tasks at the same time, but can they do it effectively? Not usually.

Let's say you're talking or live chatting with one customer — Ben. You dove into his case and you were eager to resolve it as soon as possible. But then, along comes another customer — Kate — and she really needs to know if you can send her an invoice for your product ASAP. The best thing you can do in this situation is to take a break from Ben's case to answer Kate: "Hi Kate, Yes I can do it for you. Give me a moment so I can download the invoice for you." You then go back to Ben, but in the meantime, you also download Kate's invoice.

Why is it so important to answer Kate so quickly? First response time is important for building trust and not overusing the customer's patience. It's one of the first steps that contribute to the customer's overall experience.

Here are some data from the report: Australia is the country that scored the highest customer satisfaction rate third year in a row. In 2015, it was 92%, in 2016 it was 91% and in 2017, it was 89%. The second country with the best customer satisfaction was Philippines — which achieved a score of 89% satisfaction.

Even though companies from both of these countries faced a growth in the number of their chats, they were able to speed up their replies to customers: Australia by four seconds and Philippines by almost six seconds, which made them the countries with the fastest response time — only 27 seconds, on average. Fast response time is something that all companies should aim for.

To see how important this is, try a little thing from Jeff Toister, the author of "The Service Culture Handbook:"

2. You can't solve cases in one interaction.

The most successful companies we surveyed in 2017 were tech companies: software, web hosting, and IT companies achieved 89% customer satisfaction — far higher than the global average.

What's interesting is that these businesses have some of the longest average handle times. Looking at their happy customers, it's clear that the length of time it takes to solve a customer's problem doesn't impact overall satisfaction — if you manage to solve the case in one go.

That's an important fact that deserves highlighting. For a long time, customer service team members believed that a quick handle time made customers happy — but the data proves something else.

If the first response time is quick, and the bond between the rep and the customer is created, then when the case is solved, it won't really matter that it took a little longer. The result is that a customer is satisfied with your service.

3. You don't have a customer service strategy for the future.

A lot of customer support teams start hiring more reps when things start picking up — and when more customer tickets are coming in. But that isn't always the right approach to hiring to meet customer demand.

This strategy can work in the short term, but when your organization reaches a hypergrowth stage — when you're rapidly acquiring new customers and making changes to your product or service that your customer support team can't keep up with — you'll see customer churn increase when there aren't enough reps to meet demand.

Instead, you should plan to scale your team before the demand storm arrives — using this formula to figure out exactly how many reps you need.

One thing is for sure: You can never have too many satisfied customers. It takes consistent work improving communication skills and using customer service tools efficiently.

But how can you tell if your hard work is paying off? Well, there's a variety of customer satisfaction metrics you can monitor to see if your customer service experience is actually fulfilling the needs of your customers. Take a look at the next section for some of the most important customer satisfaction metrics to keep an eye on in your business.  

1. Net Promoter Score

Net Promoter Score, or NPS®, is a very popular metric that's used to measure customer satisfaction. That's because NPS is a simple, one question survey that provides your business with both quantitative and qualitative data about the customer's experience with your brand. Having both types of data wrapped into one metric makes it easier for businesses to categorize and identify specific trends in your customer reviews.

NPS is a survey that determines how likely customers are to refer your brand to another lead. It asks customers to rate their experience on a numeric as well as provide a brief explanation for their rating. You can then organize and review the ratings that are the highest and lowest to see what people like and don't like about your company.

2. Customer Satisfaction Score

Customer satisfaction score (CSAT) is another survey that your business can use to determine customer satisfaction. Similar to NPS, customer satisfaction score asks customers to rate their experience on a scale, however instead of inquiring about referrals, CSAT focuses on a specific product, service, or customer interaction.

Customer satisfaction score is one of the most fundamental surveys used to measure customer satisfaction. Unlike NPS, businesses can ask customers multiple questions, each regarding different aspects of the customer experience. This makes it easier for your company to obtain customer feedback about specific features of your product or service.

3. Customer Effort Score

Customer Effort Score (CES) is a survey that determines how user-friendly your products and services are. These surveys are typically one-question prompts that are displayed immediately after a customer performs an action. For example, e-commerce sites may ask customers how difficult it was to locate and purchase an item they just bought on the site. This way your business can remove any roadblocks that may be impeding the customer's journey.

Customer Effort Scores are valuable because they give your company immediate feedback regarding the usability of a product or service. Many customers who are having trouble using your product will be reluctant to provide feedback that specifically addresses their pain points. Instead, they'll give up and cancel their subscription without ever telling you why, or they'll say your product is too confusing. Since customer effort scores are proactive, you can reach out to these customers and correct usability issues before people begin to churn.

4. Customer Health Score

Customer Health Score provides overall summary of a customer's satisfaction with your business. It combines all of your historical data — like CES, CSAT, and more — on the customer and displays a color that symbolizes how the customer feels about your company. Green means they're content, yellow means there's room for improvement, and red mean's they're at risk to churn. Your customer-facing employees can use this color code to ensure they're providing the best service possible to customers who have had poor experiences with your company.  

Not only does the color code make it easier for your employees to spot unhappy customers, but it also highlights people who may present a financial opportunity. The customers who are marked yellow represent a chance for your company to provide added value to their experience. Marketing, sales, and customer service teams can target these customers and provide offers that improve their opinion towards your business. If successful, these customers can be converted into customer advocates who will refer your company to other potential leads.

5. Abandonment Rate

Abandonment rate is the percentage of customers who terminated an interaction with your company before an action or request was completed. Depending on your business and the services you offer, abandonment rates can measure a few different aspects of your company.  For example, most companies who have a call center will measure the abandonment rate for customer service calls. If your company has an ecommerce site, you can measure the abandon rate of shopping carts on your online store.

Abandonment rates give you a good idea of how satisfied customers are with their interactions with your business, regardless of the product or service they're using. By comparing the abandonment rates of different components of your business, you can determine if you're providing a consistent, omni-channel experience for your customers. If your rates are high, you can pinpoint where exactly customers are dropping off and remove any roadblocks that may be preventing their success.

These metrics should provide you with a complete picture of customer satisfaction at your business. And, if you can come up with the right strategy that provides effective customer service, you will significantly improve customer satisfaction.

Want more on customer satisfaction? Read about some other ways you can measure customer satisfaction.

Net Promoter, Net Promoter System, Net Promoter Score, NPS and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

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Originally published May 3, 2019 9:11:18 AM, updated May 03 2019

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Customer Satisfaction