What is CSAT and Why You Should Care?

If you or anyone in your organization deals with customers, your CSAT Score should matter. CSAT is short for Customer Satisfaction, which is a critical metric for all businesses. You are probably already measuring customer satisfaction to a certain degree, but is there more you can do in that area?

If you think like a consumer, you will see the value of CSAT for your organization. For our example here, we will discuss CSAT for hotels. When evaluating a hotel room there are a lot of variables at play. We will only focus on two and assume that price, all other amenities and location are equal to the consumer.

WHAT IS CSAT?

Customer Satisfaction (CSAT) is critical for every business. The last time you booked a hotel room the satisfaction rating probably came into play in your decision. CSAT for a hotel is the satisfaction rating of the hotel on various websites. This is different from the star rating.

CSAT is a measurement of the guests who have stayed at a particular hotel. When they give a rating of 5 out of 5, they really enjoyed their stay. Whereas a rating of 1 out of 5 means there were serious issues. This satisfaction rating is extremely useful for visitors to a new city. It's a crowd-sourced evaluation of a new hotel in a new city. It gives the consumer more confidence in selecting one hotel over another.

Hotel A and Hotel B have the same nightly rate, but Hotel B has a 4.6 travel website rating and Hotel A has a 3.2 rating. All other aspects being equal, you probably chose Hotel B. How does the consumer choose between two hotels with a rating of 4.6? Most consumers will then look at the number of reviews.

Any time you have received a follow-up survey, the company is calculating their CSAT score. This can happen at different times in the customer process. We will cover that shortly.

HOW IS CSAT CALCULATED?

CSAT is a weighted average. Looking at any travel website for hotel guest satisfaction, you will typically see a review out of five for each hotel.

Here is a sample rating for a particular hotel

HOTEL A

Notice that to keep this simple, Hotel A had exactly 100 ratings. Adding up all the ratings and multiplying them by the point value, gives us the following

Averaging the Expanded Values gives the 4.2 CSAT rating.

WHY DOES CSAT MATTER TO YOU?

If you run a hotel, this number is very important to you. It could mean the difference between your hotel being chosen by a guest, or the guest selecting a different hotel. We want your hotel to be selected.

Let's take a look at a couple of different ratings for hotels.

HOTEL A

This is the same chart as above. A 4.2 rating based on 100 reviews.

Now, look at this one.

HOTEL B

Which hotel would you stay at? I would stay at Hotel B because there are more reviews. The consumer will have more confidence in 1,000 people instead of 100 people.

With all this new information, what should you focus on? The great reviews, or horrible reviews? Both. The great reviews will show you what you are doing well. Of course, that is obvious. Take those great reviews, find common themes, bring that back to your team, and keep doing those things well. Do guests love the front desk staff? Let them know. Do they rave about the restaurant? Keep the restaurant running well.

The bad reviews are gold. They give you ways to improve. Go through those and find common threads. Do guests complain that the carpet is dirty and worn down? Get it cleaned and repaired, then put carpet replacement on the maintenance list when you have the capital. Did a guest express concerns about a room not being up to their standards? First, verify the complaint. If the guest is correct, provide additional training to the housekeeping staff, and develop better checks and balances for cleanliness. The customer is not always right, but they will tell you how to improve your CSAT score.