Measuring Customer Satisfaction to Improve Retention

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  • 0:03 Customer Satisfaction
  • 1:28 Surveys
  • 2:54 Customer Loyalty
  • 4:11 Focus Groups
  • 5:02 Lesson Summary
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Lesson Transcript
Instructor: Stacey Taylor

Stacey Taylor currently teaches college business courses and holds an MBA degree.

Customer satisfaction is the key to a successful business. This lesson will discuss different customer satisfaction measurements that can improve retention and build relationships with customers.

Customer Satisfaction

Have you ever engaged in business with a company and were not satisfied with the product or service? What about a time you were satisfied with the product or service? Whether you were satisfied or not, companies want to know your thoughts. When customers purchase a product or service, they expect to be satisfied with the entire experience. This requires making sure customers are pleased before, during, and after they purchase a product or service. Anything less can have a detrimental impact on a company's reputation by decreasing customer satisfaction.

Let's take a moment and discuss what customer satisfaction is. We would assume that the definition of customer satisfaction is self-explanatory and means satisfied customers. However, the definition is a bit broader than that. Customer satisfaction is a term used to measure how products and services meet, exceed, or do not meet the customer's expectations. Measuring customer satisfaction is an important process for any business as it can increase customer retention and help manage customer relations. While companies love acquiring new customers, it costs them less to retain existing customers. Customer satisfaction is measured by gathering data that shows how satisfied customers are of a company's products and services. Let's take a look at different customer satisfaction measurements companies can use to improve retention and manage relationships with customers.


Surveys are a great tool companies can use to measure customer satisfaction, manage customer relationships, and reinforce pleasing experiences to help retain existing customers. A company can send customers a survey through mail, email or have them complete a survey at the conclusion of a customer service call. Either way, the survey should be short and relevant, as customers may be discouraged to complete a lengthy survey. A three to four question survey is more likely to get answered, as opposed to a ten question survey.

When creating survey questions, it's important for companies to ask the right questions and provide answers that will enable them to get an idea of how customers feel about the product or service. For example, if a customer purchased a product, the company can send them a survey by email inquiring about the product. A question such as 'How satisfied are you with the product?' with answers such as 'very dissatisfied, ' 'somewhat dissatisfied, ' neutral,' 'somewhat satisfied, ' and 'very satisfied' allow companies to measure a customer's attitude toward a product or service.

A customer satisfaction survey should also include a loyalty question. For example, a question such as 'How likely would you repurchase products from ABC company?' with answers such as 'Very unlikely, ' 'somewhat unlikely, ' 'neutral, ' 'somewhat likely, ' and 'very likely' can give companies an understanding of the health of their relationship with the customer.

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