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Sales & Ecommerce Business

Customer satisfaction can make or break your business, and the biggest question of how to measure customer satisfaction haunts every business owner, especially Ecommerce store owners. 

The importance of customer satisfaction can not be understated, so let’s begin with a short story. 

A man was selling parachutes, and a customer came and asked, ‘what if the parachute doesn’t work in the air?’ He smiled and said, ‘Don’t worry, you can always come back and replace it with a new one.’ The customer bought the parachute and was very happy with his purchase. 

Now, that isn’t precisely what customer satisfaction is, but we hope you get a hint ;p

Let’s get to the serious stuff and know what customer satisfaction is. 

What is customer satisfaction?

Customers are the most critical aspect of a successful business. You must be able to retain as many customers as possible and increase their lifetime value. You can only achieve this by keeping your customers’ satisfaction high. 

Competition in every market is high. It doesn’t take much for a customer to take their business to your competitor due to better product options, pricing, and, most importantly, customer service. 

If you are running an Ecommerce store, customer satisfaction ranks even higher. The only way to ensure that you attract as many customers as possible is by ensuring your customer’s high satisfaction. 

Let’s talk about customer satisfaction in detail. It quantifies your customer’s happiness and satisfaction with your product, service, or experience. You can measure customer satisfaction in many ways, and we will get to that later in the article. 

There are many aspects on which your customers’ satisfaction depends upon. They include the availability of your products, the pricing of your product, the after-sale services you provide, the quality of your customer service, and many more. 

How to measure customer satisfaction? 

Various methods and tools can be used to track your customers’ experience in your e-commerce store and measure customer satisfaction.

Measuring net promoter score (NPS)

Also known as NPS, Net Promoter Score is a metric used to measure the percentage of your customers who are bound to recommend your business to their friends and family.

It is measured through a survey in which you ask the recipient to rate out of 0-10 how likely they are to recommend your company to their friends.

A higher NPS score indicates that your customers are satisfied with your brand and are likely to recommend your brand further. Let’s have a look at a breakdown of the NPS score.

  • Promoters: If you have a score of 9-10, then it means that your customers are loyal to you and highly satisfied with your business. They are highly likely to keep buying from you and refer you to others, significantly increasing your sales.
  • Passives: If you have a score of 7-8, your customers are satisfied with your business but might not recommend your company to others. They are also at risk of being persuaded by your competitors.
  • Detractors: If you have a score of 0-6, your customers are unhappy and dissatisfied with your company and are unlikely to continue purchasing your products.

We live in a digital world, and word of mouth is still one of the most effective ways your e-commerce store can promote. If your customers are likely to recommend your business, it makes your job easier as you won’t have to find customers, customers will find you.

Measuring customer satisfaction score (CSAT)

Measuring customer satisfaction score is one of the key elements in measuring your customers’ satisfaction as it helps you track and measure how satisfied your customers are with your business.

The CSAT score is relatively easier to calculate. You ask a simple question to your customers: How would you rate your overall satisfaction with your purchase, on a scale of 1 to 5?

  1. Very unsatisfied
  2. Unsatisfied
  3. Neutral
  4. Satisfied
  5. Very satisfied

If you send this question to several respondents, you just need to calculate an average of all your responses and determine how satisfied your customers are with your e-commerce store.

Measuring customer effort score (CES)

Customer effort score or CES, is a service metric used to measure how much effort your customers put in to interact with your business. These interactions are of different types, such as how easily they can get their queries and problems solved and how much effort they need to put into using your product or service.
Suppose a customer has to put in a lot of effort or time to use your product or service that should have been done through minimal effort. In that case, they will likely turn their business and attention elsewhere, most probably to your competitors.

It is essential to measure the NPS and CSAT score, but calculating the CES score is equally important to ensure that you can measure your customers’ satisfaction. It is done by asking your customers if your business made it easy for them to use the product or service.

You should then give them a scale of 1-10, where 1 is ‘strongly disagree’ and 10 is ‘highly agree’.

Measuring customer retention rate

As the name suggests, the customer retention rate is a metric used to measure the number of customers your business can retain over a specific period. It is expressed as a percentage of your company’s total number of customers.

The calculation of this metric is a little complex and is not done through a survey. So, let’s have a look at how it is to be calculated.

Monitoring your company’s retention rate is crucial to assessing how many of your customers are willing to conduct business with you in the long term and helps you understand lifetime customer value and the efficiency of all the practices you are undertaking to ensure that you retain as many customers as possible.

Calculate conversion rate

Conversion rate is a metric that records the percentage of users who have completed a desired action, i.e, made a purchase, clicked on your advertisement, etc. There are many people that will visit your e-commerce store, but only a fraction of those users will actually make a purchase.

The procedure of calculating conversion rate is, take the total number of users who completed a desired action, divide it by the number of people that visited your page, and then convert that figure into percentage by multiplying it by 100.

Calculating conversion rates is an effective way to compare and analyze the performance of all the different marketing activities you have been undertaking. This way you can determine if you are able to get a favorable return on investment (ROI) from your marketing campaigns or not.

Sending out email surveys

You would be surprised to know how effective sending emails to your customers is. People are always on the lookout for emails from the brands they have had a good experience with, even if they are feedback or survey emails. 

Many tools, such as Retently, StatisMeter, etc., can help you automatically send out survey emails to your customers. You can even send out these mails manually by creating your own survey through Google Forms and sending it to your email list. 

Ensure you are not asking your customers to fill out lengthy forms. Simply ask your customers to rate their experience by asking them simple questions and using a scoring system that is easy for you and your customers to understand. 

Customer churn rate

Also known as the rate of attribution for customer churn, the customer churn rate is a metric used to calculate the rate at which customers stop doing business with your Ecommerce store. 

It is calculated in percentage form and measures the customers that have stopped conducting business with you over a period of time. 

Calculating the churn rate is essential because it helps you evaluate the effectiveness of different marketing efforts and understand the level of your customers’ satisfaction. 

Another reason to calculate is that retaining existing customers is always easier and cheaper than acquiring new ones. If your churn rate is high, it can also help you understand how and why this is happening and what you can do to reverse it.

Get the most out of your ecommerce store

We want to remind you that customer satisfaction is the backbone on which the success of your e-commerce store rests. Your business plan and goals should always align with what your customers expect and want from you. 

A pro tip is to put yourself in your customers’ shoes. If you can figure out and deliver what your customers want from your business, you are halfway to owning and running a successful e-commerce store. 

No matter how tedious this task sounds, it is doable. Through this article, we hope you have a better understanding of what customer satisfaction is, how to measure it, the different tools you can use, and the various metrics you need to calculate to determine customer satisfaction in your e-commerce store. 

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