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How To Calculate A Customer Satisfaction Index (CSI)
You need an overall measure of how good a job you’re doing for customers, something to track your progress and use to compare departments, customer types, or brands
Several headline measures are popular, including Customer Satisfaction Index (CSI), Net Promoter Score (NPS), Customer Effort Score (CES), and many organisations choose to use more than one.
In this guide we’re going to look at what a Customer Satisfaction Index is, explain in detail how to calculate your own, and give an overview of its pros and cons.
You can download a PDF copy of the guide here.
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.
WHAT IT TELLS YOU
A Customer Satisfaction Index is the best single-number summary of how well you are meeting the needs of customers, and the best tool for tracking improvements or making comparisons.
You can think of it as representing the extent to which your customers are totally satisfied (which would be a CSI of 100).
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.
We start by adding up all the importance scores...
=SUM(B2:B6)
...then divide each one by the total to create our weights
=B2/B$7
We multiply each satisfaction score by its matching weight...
=D2*C2
...then add up these weighted scores to create a weighted average
=SUM(E2:E6)
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.
Where did your list of attributes come from?
The Customer Satisfaction Index gives you a measure of the extent to which you are doing best what matters most to customers, but only if the list of attributes on which it is based is an accurate reflection of their priorities. The only way to be confident that your list is correct is to base it on thorough exploratory research to ensure your questionnaire is grounded in what matters most to customers.
It’s also important that you don’t pad your CSI with too many closely related items, something which is often the case with high-scoring questions about staff (“friendliness of staff”, “helpfulness of staff”, “professionalism of staff”, “expertise of staff”, etc.).
How often does importance change?
You don’t necessarily need to re-measure importance in every survey, as importance scores are often very stable over time and across customers. It is vital, though, that you re-measure importance periodically to reflect slow (and occasionally rapid) movements in customer priorities.
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
Want to Know More?
Send us a message if you would like to learn more about customer research to help you calculate your own Customer Satisfaction Index.
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