KPI Library – Customer Satisfaction

Customer Satisfaction Index

Description:

Customer Satisfaction Index is based on the premise that satisfied customers will be more likely to carry out repeat purchase of goods/services, remain loyal to an organisation and offer positive feedback. It follows therefore that this measure indicates how successful an organisation is at delivering goods/services to the market. Customer Satisfaction is important to an organisations’ financing, as the cost of attracting new customers is generally higher than that required to maintain a relationship with an existing customer. It also offers a tool to hi-light gaps which may arise between the product/service offered and the expectation of customers. A mix of qualitative and quantitate assessments are considered to provide the most accurate assessment, this may be obtained from a survey immediately following the delivery of goods/service or after a given period of time (e.g. Annually)

Calculation:

The customer scores satisfaction with criteria such as expectations, perceived value, etc. The scores may then be weighted to reflect relative significance to an organisation and combined to form a single numerical score identifying the customer’s overall level of satisfaction or dissatisfaction. Sample size/survey method must also be selected to ensure it is representative of customers.

Example:

For a retail outlet: Post-purchase questionnaire. Score 1 – 5 (1 = poor/dissatisfied) (5 = Good / very satisfied) Perceived quality Perceived value Satisfaction with sales assistance provided No returns – actual data obtained during the survey period. No customer complaints – actual data obtained during the survey period.