Part 2. MM4XL Tools > 2. Analytical Tools > Business Formulas > 1. Customer Satisfaction > Customer Satisfaction

Business Formulas

Customer Satisfaction

Customer Satisfaction ratings are typically used to focus employees on the expectations of customers, and are useful for warning of issues that may affect sales and profit.

The measurement of satisfaction is also often applied to employees and partners of an organization.

Perhaps the most widely used measure of customer satisfaction is the Customer Satisfaction Index (CSI). In the literature there is no one single method to compute the CSI. MM4XL Business Formulas tool provides two kinds of CSI:

  • CSII: Weights satisfaction scores by the importance weight
  • CSIW: Weights satisfaction scores by a satisfaction class weight defined by the researcher
More complex ways to compute the CSI apply regression analysis, weighted variance of the importance rates, Partial Least Square (PLS) path modeling, and other techniques. Among popular methods published in the peer reviewed literature there are the ServQual method, which measures customer satisfaction as a function of customer expectations and perceptions, the Kano method, and the American Customer Satisfaction Index (ACSI).

All measurement methods have in common the collection of raw data done by means of marketing research applying a judgment scale of the Likert's kind. The answer classes vary from 1-5, 1-7, 1-9, 0-10 and so on, where the lowest score stands for Totally unsatisfied and the highest score means Completely satisfied.

Paul Farris, 2006, Marketing metrics: 50+ metrics every executive should master
Chuck Chakrapani, 1998, How to measure service quality and customer satisfaction
Laura Eboli and Gabriella Mazzulla, Journal of Public Transportation Article in Volume 12, Issue 3 (2009), A New Customer Satisfaction Index for Evaluating Transit Service Quality
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