In this article we will discuss about the customer satisfaction index and its benefits.

Customer Satisfaction Index:

Customer satisfaction refers to the degree to which purchasers of goods and services are happy with not only the goods and services themselves, but the experience of ordering them, the delivery process, and every other part of the process.

Companies should try to satisfy their customers. Satisfied customers usually return and buy more, they tell other people about their experiences, and they may well pay a premium for the privilege of doing business with a supplier they trust.

People are used to the concept of rating things with numerical scores and these can work well in surveys. Once the customer has been given the scale, they can readily give a number to express their level of satisfaction. Typically, scales of 5, 7 or 10 are used where the lowest figure indicates extreme dissatisfaction and the highest shows extreme satisfaction.


The scores that are achieved in customer satisfaction surveys are used to create a Customer Satisfaction Index or CSI, There is no single definition of what comprises a customer satisfaction index. Some use only the rating given to overall performance. Some use an average of the two key measurements – overall performance and the intention to re-buy (an indication of loyalty).

There is more than one organization that carries out a customer satisfaction index, so it is important to note where customer satisfaction index ratings come from in order to determine their value. Some ratings suppliers are industry-based, some are country-based, and some are international.

A national customer satisfaction index is a balance to the Gross Domestic Product (GDP). While the GDP informs about quantity i.e. the total market value of the services and goods produced in a country in a specific time-frame whereas the corresponding customer satisfaction index provides a measure of quality for the same services and goods for that time period. An industry customer satisfaction index helps make comparisons among peers, which could be credit card companies, members of the marine industry, or IT providers, etc.

Industry members who participate in a customer satisfaction index are able to benchmark their performance both against their own goals, against their competitors, and against their past record. The results may also provide access to detailed customer comments. Investors can spot trends and rank businesses against their peers, while governments gain access to information that can help in economic decisions. Customers may benefit because their voices are heard and customer service may improve in response to the process.


Customer Satisfaction Index (CSI) has determined that in most cases, quality is more important than price. It has been found that while quality of a product or service is the top priority, price doesn’t even enter into the top ten priorities overall, which, in addition to quality, include treatment as a valued customer, speed, friendliness, how problems and complaints are handled, how queries are handled, competence of staff, how easy it is to do business with the company, whether or not the customer is kept informed, and how helpful the staff is.

Benefits of Customer Satisfaction Index:


The information obtained from customer satisfaction index benefits the following:

(a) Investors:

They need to know the relationship between a firm’s current condition and its future capacity to produce wealth. The health of a firm’s customer base, as indicated by how satisfied customers are, says a great deal about the current condition.

(b) Managers:


They need to know how to improve the firm’s current condition by allocating scarce resources such that the strength of customer relationships is maximized.

(c) Government:

It needs to know how to best encourage economic growth, consumer utility, and living standards for its citizens.

(d) Consumers:


They should have a voice in measures that reflect their material living standards.