Net Promoter Score and Customer Satisfaction Score are key performance indicators for businesses. While these two are complementary, they do not track the same thing. For instance, organizations use NPS to track customer loyalty while CSAT shows how satisfied a customer is with your product or service at a specific time.
To help you understand how NPS and CSAT work, this article will discuss 11 Key differences between these two customer-centric KPIs. At the end of this article, you'd know when and how to use NPS and CSAT to boost customer experience in your organization.
A Net Promoter Score is an important customer satisfaction metric that organizations use to measure consumer loyalty. An organization's NPS can be anywhere within the range of –100 to 100. Your NPS shows you if a customer would not only buy from you again, but also recommend your product to the other people in their network.
From what we've described above, a good Net Promoter Score indicates your organization is creating the right experiences for its customers while a poor score denotes the opposite. Apart from the NPS benchmark, different industries also have specific NPS ranges. Of course, this depends on the degree of competition in your industry and a combination of other market factors.
An organization typically sends out a simple survey with a simple question like, "How likely are you to recommend our product or service to others?" This question comes with numerical rating scale options from 0–10 (10 stands for very likely while 0 represents highly unlikely).
As customers send in their responses, these answers will fall into one of three buckets: Promoters, Passives and Promoters. The promoters are the people who choose options 9 and 10; from every indication, they love your product and are willing to be word-of-mouth evangelists for your business.
The passives are neither here nor there. Passives don't think your product is all that, yet they wouldn't classify it as bad or below average either. Passives settle for options 7 and 8, and you should think of them as sitting on a fence. If you treat them well enough, they can become promoters and if you don't, they can fall into this third group easily: The Detractors.
Detractors go for any of the ratings between 0–6. There's no pretense here—detractors have not had the best experiences with your brand. In many cases, detractors are constantly assessing your competitions, weighing pros and cons, and preparing to make the switch.
So how do all of these come in handy when it's time to calculate the Net Promoter Score? The NPS Formula is:
NPS = % Promoters – % of Detractors.
To determine an organization's NPS, you simply need to subtract the percentage of detractors from the percentage of promoters; the figure you have is your Net Promoter Score.
Here's an example to help you grasp the picture clearly. Let's say you sent out an NPS survey and you got 1000 responses. From the survey analytics, you see that 400 responses are promoters, another 400 are passives while the last 200 are detractors.
To arrive at the right NPS, the first thing to do is find the percentage value of the detractors and promoters. Here, we have 40% for promoters and 20% for detractors. Next, we subtract the value for detractors from the corresponding value for promoters. And this gives a NPS of 20.
CSAT means customer satisfaction score, and it measures the level of satisfaction clients have with your product or service as they go through the different stages of the buyers' journey. For instance, after speaking with an organization's customer facing team, you may be asked to complete a CSAT survey where you share your experience of the process.
Typically, customer satisfaction score is measured using a percentage scale. In some other contexts, you can take the average of the different scores to get some sort of composite customer satisfaction score.
CSAT surveys are ideally sent when you want to see how happy clients are with an action your business took, or certain aspects of your products/services.
First, the organization sends out a survey with a simple rating scale question depending on the context. For example, the question can be along the lines of, "How satisfied are you with our service delivery?" Respondents can choose any answer option in the 5-point scale that reflects their experiences.
To determine your CSAT based on this survey, you'll divide the total number of satisfied responses by the total number of survey responses and multiply the result by 100.
Let's say out of 100 survey responses, 50 of them indicated satisfaction with your service delivery, you'd divide 50 by 100 and multiply the result by 100 to get your NPS. In this case, your NPS is 50%.
NPS stands for Net Promoter Score and it measures customer experience and brand loyalty while CSAT stands for Customer Satisfaction Score and it measures the degree of satisfaction a client has with your product or service at a specific point in time.
A net promoter score shows how likely it is for existing customers to recommend an organization's product or service to the other people in their network. On the other hand, CSAT measures a customer's happiness with their experiences at different brand touch points.
You should measure CSAT immediately after a customer's interaction with your product or service. For example, you can send out a CSAT survey after a customer checks out a product via your e-commerce website. Another example is asking a customer to fill a 1-minute survey after they contacted your customer support team to resolve an issue.
On the other hand, you should measure NPS at the end of the buyers' journey. At this point, the customer has interacted with your brand and product several times and they must have formed a solid opinion. This means they are either sold in on your brand and ready to recommend it to others, or they are dissatisfied and ready to pivot to your competitors.
CSAT is a key performance index that helps organizations to build customer-centric brands. It allows businesses to track their brand's performance in real-time and make necessary adjustments to improve customer experience. Simultaneously, CSAT is an important tool for customer listening.
NPS is a customer perception index that measures the likelihood of repeated business for organizations. In other words, it helps businesses to predict the customer base expansion rate based on the feedback they get from existing clients. NPS is also a strong indicator of brand loyalty.
NPS and CSAT have different formulas. The NPS formula is as follows:
NPS = % Promoters – % Detractors
On the other hand, CSAT is calculated by dividing the total number of satisfied survey responses by the total number of survey responses and multiplying the result by 100. So, what you have is:
CSAT = (Total Number of Satisfied Responses) ÷ (Total Number of Survey Responses) × 100
Let's say you sent out a NPS survey with the question, "How likely are you to recommend our business?" And you got the following as the breakdown of responses:
Total Number of Responses = 100
Your Net Promoter Score would be (60÷100) – (20÷100) = 40
Alternatively, if you sent out a CSAT survey and you got 100 responses with the following breakdown:
Total Number of Responses = 50
Your CSAT would be (40 ÷ 50) × 100 = 80%
Customer Satisfaction Score is measured with a 5-point rating scale which may have the following answer options:
NPS, on the other hand, uses a 10-point numerical rating scale with 0 as the lowest rating and 10 as the highest rating.
Organizations can use CSAT to set team goals and outline objectives for specific teams. For example, you can draw a straight line from the performance of your customer support team to your organization’s customer satisfaction score.
Net Promoter Score cannot be used as a metric to drive internal team outcomes. NPS is a metric regarding the customer’s overall perception of your brand based on different touch points. It is too broad to serve as the core for specific team goals and objectives.
Organizations measure CSAT and NPS at different stages of the buyer’s journey. Typically, CSAT surveys are administered immediately after a customer has some meaningful interaction with your product or service at a significant touch point, For example, you can send out a CSAT survey after resolving a customer’s complaint.
On the other hand, NPS should be measured at the end of a buyer’s journey. For example, you can administer a NPS survey after a PR crisis to measure brand perception or as a part of your social media listening efforts.
Customer Satisfaction Score provides micro-level insight into the experiences of your existing customers as they use your product or engage with your brand on different levels. NPS, on the other hand, provides macro-level insights into brand perception and customer loyalty.
CSAT is used to measure a customer's emotions in the short term; that is, immediately after they have interacted with your product or company. Basically, CSAT shows you whether a customer is happy or sad within the context of an interaction they just had with your business.
NPS shows you how customers feel about your company over a longer period. It reflects the accumulation of a customer's perception based on the different experiences they've had with your business. One simple way to measure customer happiness over the long-term is by tracking satisfaction throughout the buyer's journey.
Yes! CSAT and NPS are important metrics for tracking customer experience in organizations. Typically, businesses combine CSAT and NPS to have a clearer picture of what customers think about them at every point in time. With the feedback from Net Promoter Score and Customer Satisfaction Surveys, you can effect the right changes and create better experiences for your customers.
In this article, we have compared 2 of the most common customer experience indicators for businesses. More than tracking NPS or CSAT, you should also know how they fit into your organization’s goals and the best way to use them for your business.
Customer Satisfaction Score gives you real-time feedback about specific actions and features that a customer experienced at a definite point in the buyer’s journey. However, if you want to have a clearer picture of your organization’s long-term growth, you should pay keener attention to your Net Promoter Score.
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