Understanding customers’ experiences and their feelings towards your brand is essential for running a successful, forward-thinking business. However, getting these feelings into a measurable form can be difficult. Your Customer Satisfaction Score (CSAT) and Net Promoter Score℠ (NPS) are two valuable metrics for measuring and tracking customer sentiment. Each of these can be used to learn different things about your company and your customers. When comparing CSAT vs NPS, here’s what you need to know.
CSAT vs NPS: What Are They?
What is CSAT?
CSAT, or customer satisfaction score, measures customer sentiment about a particular event, feature, product, service, change or interaction on a measure of 1 through 5, with 1 being “very unsatisfied” and 5 being “very satisfied.” Usually, CSAT is calculated as a percent, using the following equation:
(Number of satisfied customers (4 and 5) / Number of survey responses) x 100 = % of satisfied customers
CSAT can be an effective tool for measuring the success of a particular action, product, or interaction. It is generally not the best tool for measuring sentiment towards your overall business or organization. Often, CSAT surveys include open-ended follow-up questions, such as “why did you give that answer?” or “what did you enjoy or not enjoy about your experience?”
What is NPS?
NPS was developed by Fred Reichheld, Bain & Company, Inc., and Satmetrix Systems, Inc., as a way to accurately measure customer sentiment. This tool is similar to CSAT in that it ranks customer happiness on a numbered scale. However, NPS is used to gauge customers’ feelings about the entire business or organization, not a singular product or interaction.
NPS uses the question “how likely is it that you would recommend our company?” and measures responses on a scale of zero (not likely at all) to ten (very likely). The total NPS is derived from Promoters (those who answered with a 9 or 10) and Detractors (those who answered between zero and six) using the following equation:
Net Promoter Score = % of Promoters – % of Detractors
% of Promoters = # of Promoters / Total Respondents
% of Detractors = # of Detractors / Total Respondents
This score, like CSAT, is also calculated as a percent. Unlike CSAT, your NPS score can actually be a negative number if you have more detractors than promoters.
CSAT vs NPS: Which Should You Use?
So, when comparing CSAT vs NPS, which should you use? In short, both of them. CSAT is better for assessing individual interactions or specific things, like how a product performs. NPS is better for assessing overall customer sentiment year over year.
CSAT: When to Use it and What it Tells You
As you introduce new products, open new stores, make changes to your website or hire new team members, you want to know how your customers feel about them. If your customers like what you’re doing, these new additions have a better chance of being successful. But if you miss your mark, you want to know it as soon as possible. You also want to know why it didn’t work. Use CSAT to find out.
To get the most out of your CSAT survey, you need to use it correctly. Here are a few considerations to keep in mind:
- CSAT must be fair. If you’re only giving your CSAT survey to customers most likely to respond positively, it will skew your results.
- Your subject pools should be as large as possible. If only 5 people return surveys, this isn’t enough to draw any accurate conclusions.
- Use a follow-up question. Add one open-ended follow-up question inviting people to comment on their experience. This will tell you more about why customers responded the way they did.
- Use CSAT more than once. If your initial CSAT survey was low, make changes and do another. Comparing scores will show how you’ve improved and if you’re going in the right direction.
Here are a few situations in which you might use CSAT
- Customer service interactions. Are customers actually being helped by your customer service team?
- New product/service. Is your new product/service actually enjoyable and does it solve your customers’ problem?
- New website. Is your new website easy to use and navigable?
- After check-out. If your check-out experience is long, difficult or unpleasant, it’s a serious roadblock to purchase that you should know about.
- Adding new features. Maybe a new feature is exactly what your customers wanted, or maybe not.
- Product/service testing. Before a full-scale launch, you should know how your product or service performs, and where it could be better.
NPS: When to Use it and What it Tells You
NPS is helpful for assessing customer sentiment year over year. This metric is tied to other important indicators of business success, such as customer spending, income growth and customer retention. Unlike CSAT, this survey should not be tied to a single event. If it is, it can skew the results. For that reason, it’s helpful to use neutral touchpoints to make sure you’re asking customers about their overall feelings, not their feelings about a particular interaction.
To get the most out of NPS, it’s important to use it correctly. Keep the following tips in mind:
- Ask the right customers. Your customers should have enough experience with your business to give an accurate opinion, but be sure you’re not skewing your survey towards only your most loyal customers.
- Ask at the right time. Be sure your survey isn’t tied to a particular interaction, such as a brand new product, or this might skew your results.
- Assess regularly. Sending your NPS survey at the same time every year or another regular interval will give you the most accurate measurement over time.
- Use rewards carefully. If you use rewards to incentivize responses, be sure that this isn’t skewing your results.
Here are a few situations in which you might use NPS
- Compare customer happiness/sentiment year over year. Your NPS should be going up year over year. If it’s not, you should find out why.
- After a PR incident. If customers don’t feel good about your company and you took measures to correct it, see if it worked.
- Assess the value of loyal customers. Some companies rely on a high number of new customers while others rely more on existing customers. If you’re one of the latter, NPS can be helpful in calculating the value of this existing customer base.
- After a company-wide change. If your business’s products, services, structure or another important aspect has significantly changed, see how your customers feel about it.
- After a partnership, merger or acquisition. Maybe the new partner you’ve taken on or subsidiary you purchased helped your company, or maybe not.
Now that you know how CSAT vs NPS compare, you’ll know which is best for you, depending on what you want to measure. Either of these measurements can be helpful in the right situation. The more you know about your customers’ needs and feelings, the better you’ll be able to run your business.