Keeping track of customer satisfaction and loyalty is key to a successful business strategy, and it will give your organization vital feedback on how your customer service is performing and which aspects you can improve upon to create a competitive advantage.
So, how does an organization gauge the satisfaction and loyalty of its customers? This is where Net Promoter Score (NPS), Customer Satisfaction Score (CSAT) or Customer Effort Score (CES) will provide your business with valuable feedback into your performance.
All three of these metrics can be used to measure customer satisfaction, but which option is the best for your business? Let’s compare them.
NPS is a metric that has increased in popularity over the past decade, and the idea behind it is that the willingness to give a word-of-mouth recommendation is a good predictor of customer loyalty.
NPS aims to find out how likely a customer will act as an ambassador of your brand, recommending your product or services to other people within their network.
NPS simply asks the question: “how likely is it that you would recommend (company name) to a friend or colleague?” It then calculates this with a 0-10 scale, and groups respondents as follows:
- Promoters - Those who score 9-10 are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives - Those who score 7-8 are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors - Those who score 0-6 are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
Subtracting the percentage of detractors from the percentage of promoters yields an organization's Net Promoter Score, which can range from a low of -100 (if every customer is a detractor) to a high of 100 (if every customer is a Promoter).
CSAT is a more traditional way to predict customer loyalty, and can measure how happy or satisfied a customer is with your business, your product or your customer service interaction.
A company's SAT score is determined by asking customers a single question, a set of queries, or a long survey to assess their experiences. For example, a question and potential answers could b: “How would you describe your overall satisfaction with this product?”
- Very dissatisfied.
- Somewhat dissatisfied.
- Neither satisfied nor dissatisfied.
- Somewhat satisfied.
- Very satisfied.
The answers are then quantified and express as a percentage between 0 and 100 percent. The higher the percentage the more satisfied your customers are with your company.
Ever wondered how much work a customer has to go to in order to purchase your products or services? That’s exactly what CES measures. This popular metric looks at the difficulty a customer faces when trying to buy from your organization.
In fact, while this metric looks at something slightly different than the previous metrics, it can be enlightening for many businesses. If customers are finding it particularly difficult to make a transaction with your company, it’s likely they will simply move on to your competitor.
The metric simply asks customers a disagreement/agreement rating question - “How much effort did you personally have to put forth to handle your request?” - and the customer simply answers on a 5-point scale from very low effort (1) to very high effort (5).
Which metric is best for my organization?
No single metric will help you to address all of the factors that go into influencing customer satisfaction. Combining all three of these metrics, and learning which ones work best for your business, will be the most effective strategy for your company.
Once you have established these metrics as a way to evaluate your company’s customer service efforts, you will be able to pinpoint problem areas. Creating the best possible experience for your customers will improve customer loyalty and boost revenue.
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