NPS vs CSAT – What It Is and How to Measure It

No matter how long you’ve been in business, you probably already know that customer satisfaction is an essential component for staying in business – and being successful.

But how exactly do you go about measuring customer satisfaction – and how do you use that information to improve customer loyalty and create satisfied customers for life?

In this article, we’ll explain:

  • How tracking customer satisfaction scores (CSAT) can improve your customers’ loyalty.
  • How to collect net promotor scores (NPS) from your customers to gauge brand loyalty.
  • How you can use data from both scores to create a more complete picture of your customers’ experience.

 

What Does CSAT Mean?

csat score

CSAT is simply an acronym that stands for customer satisfaction score. A commonly used metric, it serves as a key performance indicator for product quality and customer service.

While customer satisfaction is really more of a general idea, CSAT is a defined metric that can be expressed as a percentage, with 100% being the best and 0% being the absolute worst.

 

How Do You Calculate CSAT?

CSAT can be calculated in a number of ways, but it is generally measured through customer feedback gathered by questions like “how would you rate your overall satisfaction with the product you received?”

To answer that question in customer satisfaction surveys, customers can respond on a 1 to 5 scale with 1 being very unsatisfied and 5 being extremely satisfied.

These results can then be averaged out to give a Composite Customer Satisfaction Score, although CSAT is typically expressed as a percentage.

Again, these scores can be elicited from customer satisfaction surveys that appear as a traditional questionnaire, a pop-up form on a website, an app message, or an SMS response.

Once you have the data from your surveys, you can calculate your CSAT score by using the responses of 4 and 5. Because they are the two highest values on feedback surveys, they are usually the most accurate predictors of customer retention.

You’ll need to know the total number of responses you received and then use the following formula to arrive at an overall CSAT percentage score. The CSAT formula is:

(Number of satisfied customers (4 and 5) / Number of survey responses) x 100 = % of satisfied customers.

 

When Do You Need to Measure CSAT?

computer screen measuring customer success

You can measure CSAT at any time, but of course, you don’t want to overdo the surveys!

Therefore, the best time to collect customer feedback and measure customer satisfaction scores is going to vary. If you offer an experience that persists over time, like a subscription or an item for long-term use (like furniture), you might want to wait before sending out a customer satisfaction survey.

After all, the customer lifecycle is nowhere near complete yet.

If you offer a product that’s meant to be used once or used quickly, you can use CSAT as a “right here, right now” customer satisfaction metric that relates specifically to that one experience – rather than an ongoing customer lifecycle.

If it’s a repeat customer that you’re dealing with, it’s perfectly fine to ask for feedback on the customer experience more than once. Just make sure you don’t overdo it on the survey requests – this may decrease the overall customer sentiment as it relates to your brand.

 

What is a Good CSAT Score?

thumbs up vs thumbs downOnce you’ve implemented a CSAT survey and gathered your data on the customer experience, you might think that’s all there is to it.

However, your work is far from done. You need to be able to tell if your customer satisfaction score is good and figure out what you can learn from it to help your business grow.

It’s not an exact science – every business and every product is different, so it’s impossible to compare the customer experience and satisfaction scores across industries.

However, you can leverage resources like the American Customer Service Index to get benchmark scores for various sectors, brands, industries, and companies to get an idea of where you stand.

Ultimately, the best thing you can do is to track customer satisfaction across the entire customer journey. To increase your customer lifetime value, track customer satisfaction score leads regularly – don’t just use this as a one-off measure but instead, gather this data often so you can keep an eye on whether your score is moving from lower to higher over time.

Progress is key when it comes to your overall customer satisfaction score, no matter what that progress actually looks like.

 

How is CSAT Different from CES (Customer Effort Score)?

CSAT is also frequently confused with CES – or customer effort score. A customer effort score measures how easy it is for a customer to find you, while CSAT measures how a customer reacts to that product once they’ve found you. While CES is a bit more limited, CSAT can be used in a variety of contexts to focus on various parts of the customer experience.

CES complements both CSAT and NPS, adding a new dimension to the data and predicting the likelihood that a customer will be loyal in the future.

Like both NPS and CSAT, CES is usually a single-question metric with a scale of responses.

 

Pros of CSAT

The customer satisfaction score is just one part of the puzzle when it comes to evaluating the customer experience and the overall success of your business. However, it has key benefits.

 

Easy to Measure

person taking a customer satisfaction score csat survey

The biggest advantage of using the customer satisfaction score (CSAT) is that it’s easy to get a score without having to jump through too many hoops.

The customer satisfaction measurement can be done in as little as one question with a simple rating scale format. Not only is it simple for customers to answer, but it also accurately reflects customer sentiment and is easy for you to aggregate data from as well.

 

Doesn’t Detract From the Customer Experience

Too many companies use complicated, lengthy customer surveys that require a lot of time for their customers to complete. This can detract from the overall customer experience and make it hard to get positive responses and honest customer insights.

Too many customers – particularly those who are actually satisfied with the experience – just won’t take the time to respond.

CSAT surveys don’t fall into this category. Because each consists simply of a basic customer rating scale, it doesn’t take long for customers to respond – so they won’t be detracted from the overall experience they’ve had with your company, nor will they be deterred from offering you repeat business.

 

Generates User-Friendly and Actionable Data

The CSAT score produces reliable, actionable data that’s easy to read. CSAT surveys don’t require a bevy of statisticians to analyze – you can easily generate a CSAT score for yourself without having to have a Ph.D. in statistics.

 

Universally Regarded

Finally, another benefit of using a CSAT survey to get an idea of customer success scores is that these measures are universally regarded. As a standard measure, it’s easy to benchmark the success of your business against others – or even to use your excellent score in marketing and advertising promotions to grow your business later on.

 

Cons of CSAT

While there are plenty of benefits associated with using CSAT surveys, there are also a few disadvantages to keep in mind.

 

Reliant on Self-Reported Data

As you are probably already aware, self-reported data is very vulnerable to bias. Even something as simple as a CSAT can be skewed depending on someone’s mood or life events when they respond to the survey.

 

Limited in Detail and Depth

measure of honest feedback

A CSAT survey is a quick survey. It can sometimes be difficult to get a clear idea of the customer experience from a CSAT because it is very limited in its questions. It doesn’t capture nuances but is instead a blunted measure of negativity or positivity – and nothing more.

One-Person Responses

Although a CSAT survey can be incredibly beneficial when someone has an individual experience, it isn’t quite as helpful when it comes to measuring a group’s customer experience. If someone is responding on behalf of a team, business, or family, it’s hard to tell who benefits most from the service or product.

 

Can Be Biased

In your life, how many times have you left a negative review for a product? How many times have you left a positive one? What about one that’s right in the middle?

As you might expect from your own responses to those questions, responses to a CSAT survey tend to consist either of very negative or very positive responses – those in the middle ground are limited. People who feel neutral about a product or service might be less inclined to take the survey.

 

How is CSAT Different from NPS (Net Promoter Score)?

Now, the question you’ve been wanting to know the answer to all along – how is CSAT different from NPS?

CSAT measures customer satisfaction, while NPS (or Net Promoter Score) measures customer loyalty to your brand.

NPS also has a single-question loyalty measure. It usually consists of questions like, “how likely is it that you would recommend this product to a friend or family member?”

By asking customers about their opinions on whether they would recommend the brand, it focuses more on their overall intention and complex feelings rather than a general perception of the brand.

 

When to USE NPS

Company, Social Network, Community, Survey, Poll

NPS is a measure of overall satisfaction just like CSAT, so it should also be sent after a customer has achieved some sort of meaningful milestone with your brand.

This could be after the first “aha” moment with the brand, such as just after the time when the customer has completed the onboarding process or made the purchase.

Again, considering the type of product or service you provide is essential in finding the right time to send an NPS survey.

Some professionals recommend sending NPS surveys quarterly while others advocate for sending one no more than every six months. In some cases, you’ll only send one NPS survey total – and that’s it.

It really comes down to how often you introduce new products that can impact a customer’s perception – and how much time it will take for customers to realize the value in those products.

In that regard, it’s quite similar to how frequently you might administer and then analyze a CSAT survey. The two can be used hand-in-hand to produce actionable data that can help grow your business.

 

Why You Should Measure CSAT and NPS to Improve Customer Satisfaction

Both CSAT and NPS can dramatically improve your customer satisfaction ratings. Here’s how:

 

Exceeds Customer Expectations

CSAT and NPS are two of the most commonly used and benchmarked pieces of data when it comes to the customer experience, giving you a quantitative idea of how satisfied your customers are – and why.

More often than not, the primary cause of customer dissatisfaction is that expectations don’t match results. Customer satisfaction and NPS surveys will collect point-in-time feedback at various customer touchpoints. That way, you can uncover customer expectations and figure out whether you have been able to meet or exceed them – and then figure out how you can improve.

 

Drives the Improvement of the Customer Experience

CSAT and NPS can also be used in a more targeted fashion to identify issues related to sales, customer service, onboarding, internal processes, and other major touchpoints. By improving the overall experience – both for customers and for employees – you can increase brand loyalty and boost customer lifetime value.

 

Finds Ways You Can Differentiate

one red character surrounded by blue characters

As a company, there’s a good chance that you differentiate yourself based on your customer experience. You can use CSAT and NPS scores to assure new or prospective customers that you’re the best. Simply publish your high scores to show that you offer fast and effective post-purchase care – and that your customers rave about these features, too!

 

Identify Causes for – and Limit the Frequency of – Customer Churn

Last but not least, NPS and CSAT can be used to reduce customer churn. Without a valuable method of collecting data, it can be difficult to tell who your happy or unhappy customers might be.

Customer satisfaction surveys like NPS and CSAT can identify the customers who are getting ready to churn – that way, you can do something to resolve the problem before it’s too late to make a difference.

 

Using CSAT and NPS for Big Results

Both CSAT and NPS can be used in tandem to measure customer experience and improve your overall performance.

However, you shouldn’t rely on CSAT and NPS alone to drive big business decisions. While they can be valuable tools, you will need to supplement them with further qualitative research to really understand them. Then, you can take action to boost customer experience – and enhance your business.

Gordon Tan

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Gordon Tan is an entrepreneur based in Australia who has started and sold multiple technology companies with a combined value of $150m. This included a client satisfaction benchmarking platform which gave him first hand insight into the best practices of over 6,000 businesses. After retiring at 35 he is now a recognised thought leader on winning and retaining clients - His two passions: making clients the heartbeat of a business no matter what the product or service and this blog.

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