Terms

Accounting for the customer satisfaction index. Customer Satisfaction Index: Method of Calculation, Meaning of Indicators

One of the most effective tools for monitoring the performance of a banking institution is the customer satisfaction index. CSI is the English abbreviation for the phrase customer satisfaction index, which means “calculation of the satisfaction index” in Russian. CSI is one of the so-called non-financial key performance indicators (KPIs). Large commercial banks that prefer Western models of work organization actively use it as an indicator of loyalty, rightly believing that with an increase in the satisfaction index, the likelihood of further fruitful cooperation between the bank and the client increases.

How the methodology for calculating the consumer satisfaction index was created

CSI is relatively new to the statistical arsenal of major financial institutions as a non-financial indicator of core performance. The theoretical foundations of the methodology for calculating the customer satisfaction index (CSI) are given in the work of Swedish scientists from the Stockholm School of Economics (1989). The Net Promoter Score (NPS), or Net Promoter Index, competes with the CSI in marketing. Both indexes are calculated by analyzing customer feedback on the quality of services provided by companies.

The CSI customer satisfaction index allows you to identify the disadvantages in the marketing policy of a particular company

American version of the index (ACSI) described in two monographs by an international team of marketers and financiers - Fornell C., Johnson M.D., Anderson E.W., Cha J., Bryant B.:

1996, Journal of Marketing - "The American Customer Satisfaction Index: Nature, Purpose and Findings."
2005, Ann Arbor, MI: The Stephen M. Ross School of Business – “The American Customer Satisfaction Index at 10 Years. A summary of findings: Implications for the Economy, Stock Returns and Management”.

The researchers spoke in an accessible language about what CSI is, how to properly organize the work of the public opinion measurement system in the process of carrying out the main activity. However, the American version is not suitable for the specifics of the Russian economic model and the construction of the services market. The Russian version should take into account all the nuances of doing business in the Russian Federation. Research in this area is carried out by serious and very respected institutions. In particular, specialists from the Higher School of Economics did not remain aloof from this problem.

According to scientists, in the Russian market, researchers of the CSI index should be able to solve a wide range of tasks:

conduct low-cost research and public opinion polls;
to establish the relationship of research results with the financial and economic performance of companies;
carry out a comparative analysis of the intersectoral level of CSI;
to implement the results of the conducted research in the model of building the activities of companies and individual business processes.

CSI measurement model

Long-term studies, privately conducted by the largest banking and financial institutions, have shown that those companies that manage to retain large corporate clients for a long period by improving service are much more successful. The search for new customers does not give such tangible results, since they need a certain amount of time to form a loyal relationship. In addition, the risk of frequent changes in financial and banking service providers by consumers is quite high. Finding "your" bank is a great success for the client. An even greater success for bankers and financiers is to find "their" clients and successfully provide them with a full range of services for a long time.

Methodology for determining the customer satisfaction index

An example of a CSI measurement model

A well-calculated consumer satisfaction index allows you to accurately assess the effectiveness of the company's activities in relation to the plans that were previously adopted.

CSI makes it very clear which of the products offered to consumers does not meet quality standards.

Everything is very simple: if the client is dissatisfied with the way the service works, then there are certain gaps in the organization of the product submission process. Thus, knowing the attitude of customers to the quality of services provided, it is possible to quickly establish a process of improving efficiency. You can keep a client in this way, and nothing else.

Methodology for the formation of the CSI information base

The first task in calculating the CSI index is to collect correct and truthful information that reflects the experience of consumers in the process of using the company's service package. Further calculations help:

identify how loyal customers are to the price and quality of the services provided;
determine the degree of accessibility of services for different groups of consumers;
establish the value of the ratio of price and quality of services in order to unify the costs of customers.

The base model is used for the calculation. It lays down the course of the process of making a decision by the client to purchase a service or product offered by the company. When establishing indicators of customer attitudes towards the quality of company services, it is recommended to combine quantitative and qualitative characteristics.

Two methods are used to collect information:

Objective.
Subjective.

The most popular ways to obtain information include:

blitz survey based on the results of the purchase of goods / services.
survey to assess overall satisfaction. In this case, an evaluation scale is used (for example, from 1 to 5 points) in order to identify the specific relationship of the client to the quality of the service.
selection of focus groups of customers formed on the basis of a single attitude towards the purchased service.

When calculating CSI, it should be clearly understood that this is a kind of average characteristic of the effectiveness of the company's areas of work. For example, the American ACSI is an analytical rating, which is compiled according to several indicators:

client's expectations;
quality and value of services that are actually perceived by the client;
the amount of claims for insufficient quality;
degree of loyalty to a particular product represented by the company.

Determination of the customer satisfaction index is based on objective and subjective data

Index calculation formula

Let's look at how an overall customer satisfaction assessment is carried out. CSI is calculated using various methods. In all evaluation activities, the cornerstone is the quality of goods/services. To assess the quality of goods, it is necessary to conduct a preliminary survey of customers. Its results should be summarized in a single database according to the following principle:

Indicator

(in order of importance)

Importance of the consumer

Quality rating scale

Number of survey participants

Average score

Index

rank

grade

rank

The next stage of work is the calculation of the quality level according to the formula:

Kcpi \u003d ni x Ki / N,

Ki - assessment of the quality of goods, expressed in points;
N is the total number of respondents who took part in the survey.

One of the most popular formulas for calculating CSI is as follows:

Ji = (ni x Ki),

Ji is the index of satisfaction;
ni is the number of respondents who evaluated the product/service;
Ki is an assessment of the quality of goods, expressed in points.

The formula is applied separately to each assessment of the quality of goods/services.

The index is calculated according to a certain formula, after which the analysis of the obtained data is carried out

CSI database analysis

After the formation of the database and the calculation of all the necessary indicators, it is necessary to analyze the results obtained:

identify the indicators that scored the highest average quality scores;
empirically derive the maximum value of CSI and compare with actual research data;
determine a set of measures to improve the quality of services provided to consumers.

In the process of this painstaking work, you should remember that:

the share of quantitative indicators in the index - up to 60%, qualitative - up to 40%;
the minimum time phase between two identical calculations is one month.

The calculation methodology in the conditions of a particular company should be clear to all employees who are involved in the process of creating a database and CSI results. Before the CSI calculation begins, each Satisfaction Index scoring factor must be assigned a number according to a scale of significance. Data sampling should be carried out evenly in all departments that provide services/goods to customers.

Pitfalls of CSI statistics

Ways to eliminate the problems identified by the results of repeated CSI calculations may be different. At the same time, company managers should remember that there are certain risks of deterioration in overall performance. Satisfying the requests of customers about the quality of services, one should not forget about the "reference value". In this case, this may be the threshold for the company's costs to improve the quality of service. Under no circumstances should it be exceeded. This could have a detrimental effect on the overall financial performance and lead to a significant drop in the value of the shares.

The calculation, repeatedly carried out according to a single pattern, at a certain stage will begin to falter. The result of this may be the receipt of implausible information about the nature of the relationship between the company and the client. It is necessary to be creative in the process of assessing customer satisfaction, changing the nature of the questions and the number of evaluation indicators after a certain time. If necessary, the number of surveys per calendar year should also be increased.

Mathematical calculation of customer satisfaction has a number of features

Keeping in mind what CSI and its results mean for the leaders of large companies, banks and insurance companies, marketers are constantly working on the inner essence of the process of increasing consumer loyalty. One of the ways to achieve acceptable results in the company's relationship with the client is the so-called success map. To compile it, you need to do the following:

determination of criteria for evaluating the strategies and business processes used by the company;
identification of the predominant composition of client groups and ways to satisfy their predominant requests;
establishing the ratio of the economic opportunities of the company with the costs of ensuring the satisfaction of the needs of all groups of customers.

With the answers to vital questions based on CSI data, company management can begin to implement a plan to improve the financial climate:

change the pricing process for all types of services provided;
to ensure the market competitiveness of services of the same direction;
carry out work to improve the service;
determine the threshold for allocating funds for the development and innovative types of services for clients.

A competent management approach to solving the whole range of issues related to determining the degree of customer satisfaction and their loyalty to the company's activities is the key to successful and mutually beneficial cooperation for many years to come.

Methods for determining consumer satisfaction indices

The development of the integral value of the product into generalized and detailed consumer expectations is called customer satisfaction tree.
Indexing the degree of consumer satisfaction allows you to quantify the contribution to the general opinion of the consumer about the quality of the object, various components.

As a rule, the standard five-point scale is taken as the basis for the determination methods (very familiar from school and naturally from institute practice).

The value of the components is determined by the table:

Characteristics of quality objects:
Services:

The quality of the components (tree component) is determined by the scheme:

The degree of consumer satisfaction with the quality of execution of each component of the tree	Grade	score	Consumer Satisfaction Index	Three Ways to Present Survey Results
	Grade	score	Consumer Satisfaction Index	a	b	c
Completely dissatisfied	Badly	1	(1)	0	20	The absolute number of consumers who gave ratings of 5 and 4.
Dissatisfied	Failed	2	(1)	25	40
Neutral	Oud.	3	(2)	50	60
	Good	4	(3)	75	80
Completely satisfied	Fine	5	(3)	100	100

How many people answered how they rate "reliability", etc.

All surveys are conducted among the so-called. “external consumers” (remember what “external” and “internal” mean?)

So: "external consumer" can be represented by three main groups.
Typically, consumers are asked to rate the weight (in terms of points) of each entry (component) of the tree. In the tree picture, the opinion of consumers about a particular component is shown as a percentage. Based on the results, the company adjusts not only the work to improve the quality of the product or services, but also the strategy to achieve the main goal - the maximum value of the product for the consumer and its minimum cost for both parties.

Rice. external customers of the company.

For greater clarity, the statistical results of the study of consumer satisfaction can be represented as a map of consumer satisfaction profiles, on the abscissa axis of which the components of the tree are applied, and on the ordinate axis - the opinion of consumers about these components (the average value of their assessment, expressed as a percentage).

Similar maps can be built for each group of homogeneous consumers corresponding to a specific market sector.

They are very useful for comparative analysis.

Rice. PU profile map.

European consumer satisfaction index.

The European Consumer Satisfaction Index is considered to be one of the important outcomes of European quality promotion policies that promote competitiveness and economic growth at both the macro and micro levels.

At the micro level - the UE index shows the most important asset of the company - customer value.

Any PM index is usually designed so that its emphasis is on supporting macroeconomic policy. In particular, the PM index allows assessing the real structure of competition, choosing the economic principles of structural transformations aimed at strengthening competitiveness, and evaluating economic indicators in a broader sense.

Europe has some experience in using national indices. In particular, in 1989 the so-called Swedish "barometer" UP was introduced, and since 1992 - the German "barometer" of consumption. They are also being developed in Austria, Denmark, France and Italy.

The barometer model is based on three levels:

the first deals with the forces driving customer satisfaction (various aspects of the consumer's understanding of quality, expectations, price, etc.);
the second - issues weighted in the PM index;
the third - some indicators representing exclusively the results of customer satisfaction (for example, loyalty).

Rice. PU profile map.

National PM indices being introduced today mostly follow this model.

Customer and customer satisfaction (customer satisfaction), as well as their loyalty, is an important success factor in any business. Regular measurement of satisfaction and its evaluation of a service or product, monitoring of changes will allow you to give an objective assessment of the company's performance. One of the main indicators of customer loyalty is the Satisfaction Index (CSI). However, CSI is difficult to measure, and traditional customer satisfaction analysis asks too many questions and provides too little useful information.

What is the true indicator of loyalty, and what is the most effective way to measure it? This question prompted Fred Reicheld and his colleagues at Satmetrics Systems and Bain & Company to take this topic seriously. The result of research conducted in more than 400 American companies was the concept of NPS (Net Promoter Score), in Russian it is sometimes also called the "Net Support Index".

The study is based on the question: "How likely are you to recommend us to your friends?". The consumer evaluates the choice on a 10-point scale. According to the results of the answers, all respondents are divided into three groups

Promoters

(given ratings of "9-10")

Clients who are loyal to the company and are ready to recommend it to their friends (the so-called "lawyers").

Neutrals

(given ratings of "7-8")

Passive customers who are generally satisfied with the company, but are not distinguished by the desire to recommend it to others.

critics

(given scores of "0-6")

Customer satisfaction with the company is minimal. Perhaps they are looking for alternatives.

The NPS score is calculated as the difference between the percentage of Promoters and Detractors. The higher the share of Promoters, the higher the NPS of the company, the more positive information the market receives about it, the more potential customers choose this company. In addition, promoters are the most profitable part of the company's client base. They are usually less price sensitive and increase volume faster than other customers.

Research company MarketData - professional analysis and evaluation of consumer and customer satisfaction

Each project is implemented taking into account the individual requirements of the customer. Based on the results of measuring customer satisfaction, a detailed report is provided in the form of a presentation and data in SPSS format. It also offers access to a dashboard system, where you can track the dynamics of consumer loyalty to the organization, its products and services.

Why measure NPS/CSI?

Track the dynamics of interaction with the client - monitor customer satisfaction. The calculation of the NPS / CSI index (consumer satisfaction index) makes it possible to evaluate the results of advertising campaigns, staff training events, the implementation of loyalty programs, etc.

Customers who are about to make a purchase come with personal ideas about price and quality, and also expect a certain level of service. The success of the company, the growth of its financial and non-financial indicators just depends on how much it manages to adjust to the client.

What does CSI evaluate?

Customer Satisfaction Index (abbreviated as CSI), or translated into Russian, is the “customer satisfaction index”. It is an assessment of customer satisfaction after his interaction with the company. In other words, with the help of CSI, you can find out how successful the experience of visiting a particular company was by a client.

The CSI Customer Satisfaction Index measures the following indicators:

how satisfied the client is with a particular process, service or product of a particular company;
how satisfied the client is with the overall interaction with the company;
how satisfied the client is with the interaction with the competitor company.

A client who has a high rate of satisfaction from interacting with a company will definitely come back again, make a purchase again, and also recommend the company to their surroundings.

Experts consider the customer satisfaction index the most used non-financial indicator. Most company executives view CSI as the most reliable non-financial indicator of future financial performance. In other words, the higher the client's CSI level in the present, the more loyal he will be to the company in the future, which means he will again make purchases in the company.

For executives, the CSI customer satisfaction index helps answer one of the most important questions: how loyal are its customers to the company? After all, studies have shown that retaining a current customer is much cheaper for a company than attracting a new one.

Method of collecting information for calculating CSI

In order to collect complete information, it is necessary to use both quantitative and qualitative methods.

Polls are actively used. For example, in most companies you can see special buttons with positive and negative ratings. Customers after interacting with the company are invited to make their choice. Surveys are also used to find out the overall customer satisfaction from using a company's product or service. To do this, the client must rate from 1 to 5, where score 1 indicates complete dissatisfaction, and score 5 indicates complete satisfaction.

Special focus groups can also be used, in which the company's clients participate. A focus group can provide a better idea of customer loyalty.

CSI Customer Satisfaction Index Formula

An example of calculating the CSI index is the equation below.

CSI = sum Wj (Pij - Eij), in which:

k - shows the number of analyzed attributes;
Wj - shows the weight factor of the attribute;
Pij - created perception of stimulus i in relation to attribute j;
Eij is the expected level for the attribute j, which is the norm of the stimulus I.

American Consumer Satisfaction Index

ACSI, or the American Consumer Satisfaction Index, shows a rating that is based on an analysis of the desires and expectations of the consumer, how he perceives price and quality. Thanks to this index, companies can measure customer satisfaction not only on a continuous basis, but also on a quarterly basis. The data source will be various customer surveys.

It is worth remembering that large annual surveys, as well as focus group studies, are quite expensive activities. Most often, companies resort to short surveys, as they also provide the necessary information about customer satisfaction, but are relatively inexpensive.

NPS Consumer Satisfaction Index

Net Promoter Score or NPS Customer Satisfaction Index literally stands for "Net Promoter Index". This index has been used for the first time since 2003, when it was proposed by F. Reicheld in a business magazine. In his opinion, the willingness to tell and recommend the organization to acquaintances is most connected with the actual loyalty of the client. This willingness is the only indicator of customer loyalty.

Calculation of the NPS index

The methodology for changing loyalty is based on two questions that are asked to current customers. Former and potential clients are not considered. The first question is: “How likely are you to recommend the company to your family and friends?” The rating is set in the range from 0 to 10, where the value 0 determines the complete unwillingness of the client to recommend the company, and the value 10 - his 100% desire to make a recommendation.

Depending on the answer, the client is ranked in one of the groups:

Promoter Clients. Those who rated 9 or 10. The most loyal customers to the company. The company can expect their recommendation.
Clients are neutral. These are recipients who rated the company with a score of 7 or 8. Such customers are rated as "passive", they can either recommend the company to friends or not.
Critical clients. They give the company a score from 0 to 6. Such customers are dissatisfied with the interaction with the company, it is hardly worth expecting a recommendation from them. Rather the opposite.

The calculation of the customer satisfaction index is made by subtracting the percentage of "promoters" and "critics". The index shows the level of customer loyalty. The value of the index can vary from -100 if all the surveyed clients were in the "critics" group, to +100 if the situation is reversed.

CSAT Customer Satisfaction Index

The Customer Satisfaction Score is an average measure of customer satisfaction. With the help of this index, the client has the opportunity to evaluate the experience of his interaction with the company. For example, some action, including communication with the support service, obtaining additional information, or returning a purchased product, can be evaluated by the buyer on a certain scale.

The indicator is measured by conducting a survey among buyers. This can be an automated questionnaire that sounds after a telephone conversation between a manager and a buyer or is sent via SMS or email. The company, sending out a survey, asks the consumer to rate the level of satisfaction with the experience. The scale often ranges from 1 to 5, where a value of 1 indicates that the customer is completely dissatisfied with the service, and a value of 5 indicates that the customer is completely satisfied. The final score for the CSAT Customer Satisfaction Index is displayed as the % of customers who scored 5.

CES and SCI indices

Customer Effort Score allows you to analyze the level of effort the client needs to make to resolve his issue when interacting with the organization. The lower this indicator, which means that the client makes less effort when interacting with the company, the higher the probability of his loyalty to this company.

The Secure Customer Index shows the level of reliability and confidence in customers. It is most related to the profitability of the company, its market share, as well as the number of regular customers. If the SCI value is less than 0.7, then these clients belong to the "risk" group, if the value is from 0.9 to 1.0, the clients belong to the safe group, in other words, the most loyal ones. Values between 0.7 and 0.9 define clients as neutral.

Remarks

When analyzing customer satisfaction, it is also worth paying attention to some remarks. In satisfying the needs of customers to improve the customer satisfaction index, you need to pay attention to the cost of achieving a high index score.

Today's fast-growing markets do not guarantee that, with a high satisfaction index, the company's financial results will be secured in the future. Customers may rate a company's product or service highly, but make a purchase at a competitor company, as its product seemed to the client more profitable or attractive.

Companies need to analyze the customer satisfaction index using various methods. A large survey conducted once a year may not be enough to complete the picture of determining consumer loyalty.

Index values to which the company should strive

By analyzing the customer satisfaction index, companies can also analyze the percentage of customer churn. It should not exceed 5%.

The final calculation according to the NPS customer satisfaction index formula should not be lower than 50. It is this value that is positive for the company. The CSAT score should tend to 80%.

The level of customer satisfaction can be affected by the reliability of the company, the range and cost of products, the ability to use various credit and installment programs. Also, the client's opinion is influenced by the presence of documentary evidence of the safety of the company's goods. An important parameter is the client's opinion about the service in the company: fast or long, friendly or not. All small factors add up to one unanimous opinion, which is precisely what allows us to analyze consumer satisfaction indices.

In which he presented a new way of measuring loyalty developed by him. The publication was preceded by several years of research on the correlation between indicators traditionally used to assess loyalty and true loyalty, which manifests itself not in words, but in the behavior of the client: more frequent purchases, higher bills and recommendations of the company to friends.

There is an interesting fact that many studies of behavioral psychology write about: once having made a decision - having chosen some brand, service, tariff plan, store - a person tends not to change his choice, unless something pushes him away. The company puts in a lot of effort to attract a customer: you need to surpass competitors, customer expectations, etc. But, having received a client, the main thing is not to push him away with your actions, that is, to provide client experience, corresponding expectations.

In 2013, the US investigated the reasons why customers changed banks. A more attractive offer from competing banks was the reason for changing banks in only 15% of cases. Another quarter of clients changed banks for reasons beyond the control of the bank: change of employer, place of residence, personal changes that lead people to start using banking services in a different way. In 60% of cases, the reason for opening an account in a new bank was the inconvenience created by the old bank for customers - non-compliance with their expectations.

Identifying and eliminating customer inconvenience (reducing the share of detractors) is the main direction of the company's efforts to increase NPS.

At the same time, it is important for the company to identify and eliminate problems that are significant for the largest part of customers. They may turn out to be problems that are not written about in complaint books, that are not addressed to the call center, or that employees do not know about. Solving the problems that are the loudest shouted about will not affect the overall index if only a few are facing these problems.