The Customer Satisfaction Index (CSI) is a ratio that helps you evaluate the satisfaction of your customers. The CSI shows whether the customers like to interact with the company while purchasing, consulting, or in other situations.
If you want to calculate the Customer Satisfaction Index for your business, you need to survey your customers according to different parameters. The parameters show what customer services you need to evaluate: for example, communications with the staff, delivery, location of a shop, etc. The customers should index each parameter using points.
When customers complete the surveys, marketers will sum up all the indexes, divide them by the number of respondents, and calculate the CSI for each parameter.
Why You Might Need to Calculate Customer Satisfaction Index
CSI helps you understand whether customers feel comfortable while contacting the customer service team, placing orders, and shopping offline. Generally, they can rate anything you need.
If your clients are not satisfied with your services, there’s a risk of customer churn: customers will just leave you and go to your competitors. However, if you calculate the Customer Satisfaction Index regularly, you can fix all the issues and retain your customers.
Also, the Customer Satisfaction Index can help you:
- Identify what’s important for customers in the initial stage of the customer journey. For example, you can ask customers not only to rate their experience but also to tell you how much they care about each parameter.
- Understand the approaches to different customer segments. A company can survey different groups of customers that are united by features like age, interests, gender, etc. Thus, a business can understand how to adjust to different customer segments.
- Create a motivation system for employees. You can ask customers to rate different managers or departments. Thus, you can give perks to employees with the highest rates.
How to Calculate the Customer Satisfaction Index (CSI)
Let’s go through the steps for calculating the Customer Satisfaction Index.
Step 1. Create a Survey For Calculating Customer Satisfaction Index
Create a survey and divide it into three columns. The first column is for parameters that are to be rated by customers. Parameters can be anything that concerns your brand: customer support, assortment, pricing, etc.
The second column is for the customers’ rates. Customers should fill it out with the points: for example, they can rate the service on a scale of one to ten, where ten means “excellent” and one means “awful”.
The third column may be called “Importance”. A customer should rate the parameter on a scale of one to ten, where ten means “crucially important” and one means “not at all important”.
Step 2. Distribute the CSI Surveys
You can survey your clients offline or online: give them physical survey forms in shops or send online forms to customers via email or another marketing channel.
Step 3. Process the Data and Calculate the CSI
When you gather all the survey data, you’ll need to upload it or copy it from the survey forms and calculate the Customer Satisfaction Index for each parameter: just find the sum of all the rates and divide them by the number of respondents.
The formula for calculating the Customer Satisfaction Index is the following:
CSI = Sum of all rates / Number of respondents
Step 4. Analyze Your Customer Satisfaction Index
What should you do after calculating the CSI? We’ll give you three ideas:
- Search for issues. When you calculate your CSI, you can see your weaknesses and search for issues. A low CSI means that customers are not satisfied with the website, managers’ work, or delivery. Your task here is to figure out why and fix it.
- Analyze the results in different periods. For example, you can compare your latest CSI with the data from the previous period. If the CSI is lower than it used to be half a year ago, it means that something is going wrong. In this case, you need to understand what’s happening and return your services to the previous level.
- Understand what’s important for customers. If your customers rate some parameters as “highly important” and give negative feedback about them, you need to prioritize these parameters.
Pros and Cons of the Customer Satisfaction Index
There are some pros and cons of the CSI method that you need to know about before calculating it.
Advantages of Customer Satisfaction Index
- Low customer churn. Thanks to the customer satisfaction index, you can quickly understand what’s wrong and fix the situation before customers leave you.
- CSI helps understand which aspects are more important than others. Thanks to the CSI survey, you can understand which parameters are crucial for customers and focus on their quality.
- CSI considers the interests of different customer segments. You can learn what’s important for certain customers and adjust your work to meet their expectations.
- Analyze the work of your staff. The Customer Satisfaction Index helps you see whether your customer support is doing good. If customers give employees low rates, business owners can educate the staff or fire some employees and hire new people.
Disadvantages of Customer Satisfaction Index
- You are supposed to motivate customers to complete the survey. Usually, customers don’t have the time to answer your questions, so you need to motivate them with bonuses, discounts, presents, etc. Thus, you’ll need to spend financial resources to get the data for the CSI.
- HR expenses. You’ll need to hire marketers, developers, and system administrators to launch and manage the CSI campaign.
- The process is not quick. First, you need to create a survey, then distribute it, upload the data, and analyze it. Only if you complete all these steps, you can use the Customer Satisfaction Index to solve your issues.
The CSI or Customer Satisfaction Index is the metric that shows how satisfied your customers are. The CSI can help you understand whether the customers like your support services, consultations, shops, etc.
If a brand regularly conducts CSI surveys, it can quickly identify troubles and take action.
Also, the CSI research helps you figure out which aspects of your brand’s work are important for customers and focus on these parameters.