Every company wants to make sure their customers are happy, but how do you do that? Start by sending SMS surveys, as you can take advantage of the high open rate of text messages to get a large number of responses. Combine that with the satisfaction measuring method of your choice. There are a few different methods of measuring customer satisfaction, including the customer satisfaction score (CSAT) and the net promoter score (NPS).
In this article, we’ll take a closer look at these two scores, the differences between the two, and help you decide which one you should use.
Customer Satisfaction Score
A customer satisfaction score looks at the level of client satisfaction throughout their journey as a buyer. This usually uses a percentage scale, but you can also use averages. The main goal of a CSAT is to measure satisfaction with a particular part of your service or product.
How You Calculate a CSAT
Your CSAT calculation starts with a survey. For example, you could ask, “How satisfied are you with our services?” Then, you would ask the respondent to rate their answer between 0 and 5, from “highly unsatisfied” to “highly satisfied.”
As we mentioned, this calculation relies on simple percentages most of the time. So, you just divide your satisfied respondents by the total respondents and multiply it by 100.
As an example, assume you have 60 satisfied responses out of 100 surveys. You would divide 60 by 100 and multiple it by 100 to get 60% satisfaction.
Net Promoter Score
The net promoter score is a score ranging from zero to 100. The goal of the NPS is to show whether your customer would buy from you again AND whether they would recommend you to others.
The goal is to have a high NPS. That said, there are also various benchmarks for NPS depending on the industry. After all, you want your NPS to be better than (or at least equal to) your competitors’.
How You Calculate an NPS
When you send out a survey with the goal of calculating your NPS, you will ask questions, such as “Would you recommend our service to others?” and give numerical options between 0 and 10. The 0 would mean “highly unlikely” while the 10 would mean “highly likely.”
Then, divide your respondents into three categories:
- Promoters: These people love your product and give you a 9 or 10.
- Passives: They are sitting on the fence. They don’t think you’re amazing, but they also don’t think you’re worse than the competition. They give you a 7 or 8.
- Detractors: These are the people who rate you between 0 and 6. These clients are likely to switch to a competitor and are your unhappy customers with poor brand perception.
With all that information, you can finally calculate your NPS. The formula is simple.
NPS = Percent of Promoters – Percent of Detractors
So, let’s assume your results say 40% of respondents are promoters, 40% are passive, and 20% are detractors. Your NPS would be 20% (40%-20%).
Important Differences Between NPS and CSAT
Before we get into whether you should use the net promoter score (NPS) or customer satisfaction score, make sure you understand the key differences between the two.
- What They Measure: NPS measures brand loyalty along with customer experience, while CSAT focuses on client satisfaction.
- Scales Used: CSAT typically uses a five-point rating scale, while the net promoter score typically uses a 10-point one.
- Insight Level: Experts refer to NPS as measuring macro-level insights because it looks at the customer experience and journey as a whole. By contrast, CSAT delivers micro-level insights since it looks at specific stages in the journey. Similarly, NPS measures customer happiness over a long period while CSAT measures customer sentiment over the short term. So, you can think of NPS as measuring overall satisfaction while the CSAT score measures satisfaction at a particular stage in the customer lifecycle.
- When You Use Them: CSAT scores come into play after a specific interaction with the client, such as after placing an order or engaging with customer service. By contrast, you measure the NPS when the buyers’ journey is complete. As such, you may use CSAT multiple times for a single client or buyer journey but will only ever use NPS once per journey.
- How They Influence Decisions: CSAT can help you set goals for specific teams, as it looks at specific parts of the buyers’ journey. NPS is an overall rating, so you can’t use it for specific goals.
Of course, there are also some similarities. Both help you better understand your customer on a deeper level. The goal for either metric is to reduce churn and boost the quality of your service. Either metric can help you minimize a negative experience across all touch points.
CSAT Vs. NPS—Which Should You Use?
Now we’ll let you in on a little secret that some people might not realize—you don’t have to choose between CSAT and NPS. You should be using both.
So, the question becomes: When should you use each? After all, you need to format your customer satisfaction surveys differently depending on the customer satisfaction metric you want to measure.
Pros of NPS
To start, consider the advantages of the NPS:
- Helps you predict the rate of customer expansion
- Indicates brand loyalty
Pros of CSAT
And the following are some crucial advantages of CSAT:
- Helps create a customer-centric brand
- Lets you track performance in real-time, allowing for fast adjustments
- Helps with customer listening
When to Use Each: In Brief
Overall, you should opt for NPS if you are more focused on customer emotions and feelings in the long run or want to look at the customer journey overall from a macro-level perspective.
Some specific examples of when to measure NPS include the following. You will notice they are all situations when something changed with your company, product, or service, not with the customer.
- After you make major changes, from mergers to shifting your products or services
- After a PR crisis
- After managing a PR crisis
- Regularly, to track customers’ satisfaction
Opt for CSAT if you want to see how customers feel about a specific step in the buying journey or a specific process. It is ideal if you want to evaluate a one-time, micro-level perspective. For example, you can use the CSAT to evaluate your onboarding process, a new feature, or the customer support experience.
Some specific scenarios to measure the CSAT include the following. You will notice these are all various points in the customer’s journey.
- After closing a customer’s support ticket or following an interaction with customer service teams
- After a customer makes a purchase
- After a customer finishes their trial period
Measuring your NPS and CSAT lets you gain an overall insight into customer satisfaction. When used together, they allow you to see both a macro-level and a micro-level picture. This lets you make necessary changes to optimize the customer experience.
When measuring either of these metrics for customer experience management, you will do so via customer satisfaction surveys. The easiest method of collecting customer feedback is via SMS surveys, something Podium can help you with. This method will give you a high response rate to customer satisfaction surveys, providing valuable insights.