Net Promoter Score vs Customer Satisfaction Score
“Your most unhappy customers are the greatest source of learning and making sure you are measuring the right metrics is key to the success of your business, product or service” – Says anybody running a successful business.
Everybody in today’s world is a customer or end user receiving some type of service. Whether you are shopping at a grocery store, flying with an airline or purchasing something online, you inevitably build expectations on a smooth transaction with the highest quality, design, communication and the end result of receiving the right product or service. These expectations are key for a business’s success to deliver above and beyond what is built up in your mind, and the only way they can achieve it is by measuring each point within your journey, learning and enhancing it on a continuous cycle. Furthermore, building a good customer retention policy ensuring loyal and repeat customers is imperative. With this in mind let’s deep dive into two commonly used acronyms in the world of Customer Experience Surveys. The details about CSAT vs NPS surveys will be discussed at great length, as that aspect of customer experience has always been a debatable topic for many researchers and marketers in terms of whatc they mean to a business, why they are different and how best they can be used in conjunction.
Let’s start with the definition of both Customer Satisfaction Score (CSAT) and Net Promoter Score (NPS) to understand the CSAT vs NPS Survey section of this blog in a credible manner.
Customer Satisfaction Score (CSAT)
Simply put, it is a measure of the level of standards that meet a customers expectation.
- What is CSAT in technical terms? CSAT is a Key Performance Indicator (KPI) or Service Metric used to measure the satisfaction of your customer on a percentage scale for a particular product, transaction, interaction and/or service etc. CSAT allows you the leverage of picking different points within your customer journey to understand how happy a customer feels with the service provided.
- Why should you measure CSAT? Real customer data provides you insights on what is working well and what is truly failing. If something is working well, then at the least continue doing it if not better. If something is failing, well there’s no need for explaining the need for course correction. But without the right information taking blind decisions will merely result in guesswork.
- What is the scale of measurement used? CSAT is usually measured on a 5-scale using the below answer examples:
1. Very Unsatisfied / Very Unhappy / Very Bad
2. Unsatisfied / Unhappy / Bad
4. Satisfied / Happy / Good
5. Very Satisfied / Very Happy/ Very Good
- How should you measure CSAT? Customer satisfaction scores are measured by calculating the percentage of the sum of the total number of responses that are ‘Satisfied’ and ‘Very Satisfied’, divided by the Total number of responses.
- When should you measure CSAT? CSAT is usually measured at the end of a transaction, an interaction or specifically a conversation. Take the example of an online buyer, asking a question to rate their experience after the customer is made a purchase will help you evaluate their overall experience with buying this product. Once delivered, asking a CSAT question on the product itself will provide meaningful insights on what the customer feels about the product. Another example is asking a customer how their interaction went with a Call center agent at the end of the conversation, which will help measure the performance of the agent at the task.
- What do the CSAT measurements indicate? By human nature, respondents are usually highly passionate customers. They fall under the categories of extremely unhappy or extremely happy customers. Neutral customers are very rare but they matter on gaining a better CSAT score.
1. Low scores – Your services are below expectations and need a course correction. It is always good to follow through a low score with an open-ended question comment box to provide additional information that can provide more details for course correction.
2. Neutral – These customers feel indifferent about your services and while it is a good practice to understand why to be prepared to get no further comments.
3. High scores – Your services have met or exceeded expectations. Well pat yourself for a brief second but continue tracking your scores to ensure you retain the same perception.
- How long should I measure CSAT? Well as long as you are selling. CSAT over a period of time determines improvements if you are taking real action or deterioration indicating that things are not going as planned. Make sure this is a continuous activity for a successful business!
Net Promoter Score (NPS)
Simply put, NPS is a measure of long-term happiness or customer loyalty.
- What is NPS in technical terms? Net Promoter score is a customer perception index ranging from -100 to 100 that predicts customer loyalty and the willingness to promote the product, service or brand.
- Why should you measure NPS? Repeat customers are a great way to sell more. The happier your current customer is, the greater the chances of them returning to buy again. And even better, the higher the chances of this customer recommending your product to a family, friend or colleague hence resulting in organic self-marketing of your business. Measuring NPS helps you predict the growth of your business with real data.
- What is the scale of measurement used for NPS? The question to ask for NPS usually revolves around the lines “Considering your complete experience with our company, how likely would you be to recommend our products to a friend or colleague?” and the scale used is 0-10, 10 indicating the highest and 0 indicating the lowest.
- How should you measure NPS? Let’s understand the following terms before we measure NPS:
1. Promoters – Those who selected the scale 9-10. These customers are extremely happy with the provided services and the overall experience and are likely to promote your brand. Providing them an avenue to further share their feedback through social media and other review channels could result in positive ways of spreading the word.
2. Passive – Those who selected the scale 7-8. These respondents lie around the neutral side of the spectrum. Something did not meet or exceed their expectations but they are not entirely unhappy.
The Net Promoter Score (NPS) is measured by subtracting the percentage of customers who are detractors from the percentage who are promoters. The result is a score between -100 and 100 called the Net Promoter Score.
- When should you measure NPS? At the absolute end of a transaction to understand if your customer would truly promote your brand. The complete satisfaction of going through the entire journey and support structure will help a customer determine his loyalty to your brand.
- What do NPS measurements indicate? While NPS gives you a measure of where your business or organization stands in terms of brand loyalty, it is a great point to close the loop with detractors. Promoters might bring in more revenue, but the cost incurred to control the actions of a detractor are a lot higher. These measurements should be evaluated across the organization and actions taken in due course of time.
- How long should I measure NPS? Well, my answer would remain the absolute same as for CSAT – As long as you are selling. Negative NPS requires course correction immediately as it reflects not just on a single parameter of your operations but your entire business and brand.
Customer Satisfaction (CSAT) vs Net Promoter Score (NPS) Survey
Customer satisfaction is one of the most established parameters of customer satisfaction. This scale was conducted to calculate customer satisfaction on a scale of 1-5. It was in 2003 that the Net Promoter Score (NPS) was introduced to evaluate customer loyalty and brand shareability.
The primary difference between Customer Satisfaction (CSAT) vs Net Promoter Score (NPS) is that CSAT is usually used to measure short-term customer loyalty while NPS is used to evaluate long-term customer loyalty and happiness. Experts suggest that NPS is a more reliable and accurate form of customer satisfaction measurement in comparison to CSAT. This is because NPS results can be directly associated with an organization’s progress and profit.
Customer satisfaction surveys are extremely convenient for researchers and are widely used in situations where customer service has been provided and immediate feedback is anticipated. Most market researchers implement CSAT surveys to close their customer interaction loop and learn how they met customer expectations. Industries such as retail put CSAT surveys into action to constantly analyze their customer satisfaction standards.
Analyzing customer feedback at every juncture of a customer journey can be fruitful in deciding their long-term loyalty towards an organization. Net Promoter Score (NPS) is used to learn whether customers will be willing to make a purchase from the organization again in the future or how unhappy are the customers with their experience.
Due to the division of customers between Promoters and Detractors, researchers can evaluate the NPS score to continuously analyze customer satisfaction. NPS score is an integral source to understand whether customers will spread a positive or negative word about the organization and directly estimate an increase in business that a promoter could probably bring in for the company. Enhancements can be made in customer experience by improving products/services or boosting customer service to convert detractors and passives into promoters and also keep the promoters engaged.
Net Promoter Score (NPS) and Customer Satisfaction (CSAT) are complementary measures:
Both scores are equally important to measure the success of your business understanding the overall satisfaction and growth of your business helping you evaluate the effectiveness of process changes, product features, and services overall.
- While CSAT helps point out key specific areas for improvement, NPS gives you an overall picture of customer satisfaction.
- CSAT is better to pinpoint areas of interest whereas NPS helps you measure your business as a whole.
- CSAT is more versatile allowing you to ask different types of questions whereas NPS is limited with a single question type.
- While immediate action on negative responses to both metrics is important, an NPS detractor needs to be managed in real time to prevent negative brand perception.
Combining these metrics within your survey will help you compare scores before and after implementing changes to measure greater impact.
Learn more about what metrics are important to implement in your CX program downloading for free The Hacker's Guide in Customer Experience.