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3 Useful Metrics for Analysing and Improving Customer Satisfaction

StartUp Growth Guide Staff

StartUp Growth Guide Staff

Customer satisfaction is defined by a set of key metrics that are used to evaluate customer experience and the factors that influence it. Customer experience is the paramount driver of brand loyalty and a key success factor for any organization. 

In order to measure customer satisfaction, it is important to have a reliable set of customer metrics that reflect how the company’s performance and value are perceived by customers. 

The best companies in the world are using important customer satisfaction metrics to refine their marketing strategy. This helps them to drive personalized relationships and develop strong customer experiences.

In this article, we consider three quantifiable metrics. These metrics give a correct picture of how your service delivery impacts the experience of your customers. 

Customer Retention Rate

Generally, the retention rate measures the number percentage of customers who return to your company, product, or service. Each return a customer makes is a sign that the previous interaction or purchase was, at least, satisfactory to them. 

A high retention rate indicates that most customers are content with your product or service.

The common formula is to subtract the number of customers acquired over the period from the number of customers you had at the end of the period; then divide the result by the number of customers that you had at the beginning of the period. 

For example, say, a business had 107 customers on July 1st, acquired 32 customers throughout July, and by the month’s end had 124 customers. The customer retention rate over July would be:

124-32 = 92


(92/107)*100 = 86% CRR for July.

Average CRRs vary by industry. According to data from Statista, find the average retention rates for various industries below:

  • Media – 84%
  • Professional Services – 84%
  • IT Services – 81%
  • Financial Services – 78%
  • Banking – 75%
  • Consumer Services – 67%
  • Retail – 63%

Customer Churn Rate

It is normal for a business to lose a certain number of customers now and then, especially the larger companies. But sometimes, the rate must be probed to determine why customers may be leaving. 

The customer churn rate has a direct impact on a business’s profitability because each customer lost is revenue lost. The global average value of every lost customer is $243. For small businesses, in particular, each lost customer can be a major setback. 

How do you calculate the churn rate? Divide the number of customers lost over a period by the total number of customers that the business had at the beginning of the period. Then multiply the result by 100. 

If a business starts July with 577 customers and loses 63 customers in that month, the churn rate would be (63/577)*100, which gives us an 11% churn rate for July. 

The average churn rate by industry varies widely. In the US, general retail has a yearly churn rate of 24%; online retail, 22%; Telecom/wireless, 21%; travel, 18%; etc.

A churn rate well below 10% for any given period gives the business boasting points. 

Average Resolution Time/Time to Resolution

The idea behind this is simple: the faster you resolve a customer’s issue decisively, the more satisfied the customer is. 

Certainly, some issues require more complexity than others and so may take more time to resolve. However, your goal must be to continually drive down the average resolution time. 

You can also compare average resolution times by customer service employees, the nature of the issues reported, the channel of communication (phone call, social media, email, etc.), or any other relevant factor. 

The multiple viewpoints help you to paint a true picture of the situation and uncover opportunities on how to improve ticket resolution for future issues. 

It is important to note, too, that when it comes to ticket resolution, checking only the average resolution time, regardless of the factors, may give you misleading data if you ignore the context. 

For instance, a customer would be quite satisfied if their issue took 10 days to resolve but throughout the period, they received regular updates. The same customer would be less satisfied if their issue took 7 days to resolve but you didn’t keep them informed through the period.

Therefore, you should apply this metric with carefulness, taking into account the context and overall customer experience. 


Note that these metrics are only meant to help you understand how effective your tactics and overall strategy are; they are not figures for you to obsess over. 

If you want your business to be successful, then you need a way to understand your customers better and react accordingly.

In this post, we have highlighted some powerful metrics that can be used to analyze and improve customer satisfaction – as well as the behaviors that create these experiences.

Data is power and we expect that these insights would enable you to collect accurate information and refine your service delivery in ways that improve customer satisfaction.

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