WHAT IS IT?

A Customer Satisfaction Index is a weighted average based on a number of questions. This is important because it means that it is more robust and less volatile than measures based on a single question.

It is reported on a scale of 10 to 100. Our methodology, which is also used for the Institute of Customer Service’s UKCSI, is based on weighting satisfaction scores by importance. This means that your Customer Satisfaction reflects the extent to which you are “doing best what matters most” to customers.

HOW TO CALCULATE IT

To calculate a Customer Satisfaction Index using our methodology you need both satisfaction scores and importance ratings for a range of attributes, ideally on a scale of 1 to 10.

1. We start by adding up all the importance scores...

   =SUM(B2:B6)

2. ...then divide each one by the total to create our weights

   =B2/B$7

3. We multiply each satisfaction score by its matching weight...

   =D2*C2

4. ...then add up these weighted scores to create a weighted average

   =SUM(E2:E6)

5. Finally this weighted average is multiplied by 10 to create an index out of 100

   =E7*10

WHAT TO WATCH OUT FOR

The formula for calculating a Customer Satisfaction Index is simple, but using it in practice can be difficult. Here are some common roadblocks.

Individual or aggregate calculation?

In this example above we looked at calculating a CSI for one customer’s scores. It’s also possible to calculate the index at an aggregate level, based on average scores. This can work, although it means you have to run the whole calculation every time you run a new piece of analysis, but can lead to problems, notably...

Missing values

When there are missing values, in other words when customers haven’t given a score for one or more questions, it needs to be dealt with carefully. If you work out a CSI for each individual customer, then you need to make sure that only importance ratings with a matching satisfaction score are used in the calculation of their index, so that it is theoretically possible for them to get a CSI of 100.

If you work out a CSI at the aggregate level, then missing scores create a big problem as attributes with many missing values will have more weight than they really should. This commonly affects satisfaction with complaint handling, which is often only scored by the 10-20% of customers who have experienced a problem. If you calculate a CSI at the aggregate level, based on average scores, then the net result will be that your CSI is shown as much lower than it should be.

SUMMARY

A Customer Satisfaction Index is the most reliable headline measure, as long as it is based on the things which are most important to customers. It is sensitive, robust, and easy to communicate.

+ Pros

• Easy to understand & communicate

• Robust & sensitive

• Reflects customer needs

- Cons

• Dependent on an accurate list of attributes

• Requires importance and satisfaction scores

• Can be complex to calculate with missing values