Satisfaction & Loyalty: key terms, formulas and examples
Satisfaction is how well the experience meets expectations. Measure it with CSAT and NPS, solve problems at first contact, and use loyalty programs and service recovery.
Example
NPS equals % promoters minus % detractors.
Takeaway
Listen to feedback, reply fast and fix problems kindly.
Key terms
- Customer satisfaction
- How well a product meets customers' expectations.
- Net promoter score
- A score showing how likely customers are to recommend you.
- Loyalty program
- Rewards that encourage customers to keep buying.
- Customer retention
- Keeping existing customers buying from you.
- Customer feedback
- What customers say about their experience with your product or service.
- Customer service
- Help offered before, during and after a purchase.
- Complaint handling
- Resolving customer problems promptly and fairly.
- Response time
- How quickly you reply to customers.
- First-contact resolution
- Solving a problem in the very first interaction.
- Customer effort score
- A measure of how easy it was to get help.
- Empathy
- Understanding how customers feel.
- Refund policy
- The rules for returning money after a purchase.
- Customer expectations
- What customers think they will get.
- CSAT
- A score from asking customers how satisfied they are.
- Service recovery
- Fixing a failure to win back trust.
- Customer delight
- Exceeding what customers expected.
Formulas
Net promoter score%P − %D
Customer retention rate(E − N) ÷ S × 100
Net promoter score%P − %D
Order fill rateF ÷ O × 100
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