CSAT and Net Promoter Score address different needs
By Daniel Abramson, HRSource
Why do we often hear “Please hold for a survey” after chatting on the phone with a customer service representative?
Because businesses are routinely conducting more customer satisfaction (CSAT) and, more recently, Net Promoter Score (NPS) surveys to gauge customer sentiment and loyalty. Both survey types contain a simple close-ended question to help businesses assign satisfaction scores, as well as an open-ended question to understand the reasons behind each rating.
The main difference between CSAT and NPS is that the former measures short-term happiness following a recent interaction with your brand, while NPS assesses overall brand satisfaction and overall customer loyalty over the long term.
Customer Satisfaction Surveys
CSAT expresses the customer’s level of satisfaction with a brand, its product or services, or a particular interaction during the buyer’s journey. CSAT surveys are designed to measure customer happiness following each meaningful touchpoint, such as completing a sale or speaking with a rep, or before an important milestone like renewing an extended warranty.
A CSAT survey usually asks customers to rank a recent experience on a scale of 1 to 5, in which 1 is “Very Unsatisfied” and 5 is “Very Satisfied.” The average response score is the CSAT score.
As noted, CSAT surveys should be measured right after meaningful touchpoints or before milestones. Occasions include:
- After closing a service ticket, to evaluate the performance of your support reps and the quality of your customer service;
- After completing a delivery, to see if customers like your product and determine how you did;
- After making a purchase, to detect any potential issues or hot spots.
In contrast, NPS is an indicator of whether your customers or staff members will recommend or promote your company, product or service to friends or colleagues. NPS surveys ask respondents to express their referral intention on a scale of 0 to 10; for instance, “How likely would you be to recommend XYZ company to a friend or colleague?”
Based on their responses, customers or staff members will fall into one of three groups:
Promoters (9 – 10): These customers are your main advocates. They are happy with the overall customer experience and are willing to spread the word about your brand, whether to friends and family or on social media.
Passives (7 – 8): These individuals are indifferent to your product or service and are at risk of looking elsewhere for something comparable. You need to work harder to exceed the expectations of these customers or else they could easily switch to the competition.
Detractors (0 – 6): These customers are unhappy with your brand or company and could potentially harm your reputation by sharing negative feedback. Analyzing open-ended responses as well as the NPS score can shed light on which aspects of your product or business are making your customers unhappy, giving you a chance to address those issues.
To calculate your business’s NPS score, subtract the percentage of detractors from the percentage of promoters.
NPS should be measured at the end of a buyer’s journey. It may be useful to choose neutral touchpoints, so that customers don’t link their answer to their most recent interaction. For example:
- After making any big changes, like a shift in the services or products you offer, or a new delivery service;
- After a crisis like the pandemic, to measure brand perception (and to see if that image improves because of your actions).
Finally, make sure to send NPS surveys regularly (for example, the same month every year), so you can keep track of the results and analyze brand happiness and loyalty over time.
Here are some NPS benchmark numbers to give you an interesting point of reference. According to global benchmark data, which accounts for the NPS of more than 150,000 organizations, the average NPS score is 32. Some of the highest NPS scores were earned by Costco, 60; Amazon, 61; Apple, 65; Netflix, 68; Ritz Carlton, 69; Starbucks, 77; Airbnb, 74; and Tesla, with an astounding 96. (BTW, Walmart scored a 14.)
An easy way to remember the difference between the two survey types is that NPS provides macro-level metrics while CSAT gives you micro-level metrics. But regardless of which approach you use, always include open-ended questions.
Need some help designing NPS or CSAT survey questions to determine your customers’ satisfaction? Call me at (540) 535-8484.
Daniel Abramson is managing lead of HRSource, a comprehensive collection of customized employment tools and turnkey solutions exclusive to BrandSource members. For more information, contact Daniel at (540) 535-8484 or firstname.lastname@example.org.