Net Promoter Score vs. Customer Satisfaction Survey

Net Promoter Score vs. Customer Satisfaction Survey

Did you know that even a single complaint can have long-term damage on your brand? Well, for that one customer who spoke out, there may well be several customers that didn’t choose to send their feedback. Instead, they will silently lose interest in your brand and leave.

Indeed, you can keep those customers from leaving by taking proper action. But you will have to play your cards right. Brands rely on customer satisfaction measurement tools that help collect valuable feedback.

These tools help improve the existing buyer journey and create a better and more pleasant customer experience. In this post, we will discuss two such crucial customer satisfaction or CX metrics – 1) Net Promoter Score (NPS) and 2) Customer Satisfaction Survey (CSAT).

What are the characteristics of customer loyalty metrics?

But before we dive deep to understand these metrics better, let’s figure out how to measure customer loyalty. After all, improving customer experiences should lead to buyers becoming more loyal to your brand. Here are some of the characteristics of customer loyalty metrics you should track.

  • The customer loyalty metric should help differentiate more profitable customers from less profitable customers. In other words, it should help determine the financial outcomes of a business-customer relationship.
  • The customer loyalty metric should help identify customers that will prove profitable to a company if their buying experience enhances.
  • The chosen loyalty metric should have negligible variance. A lower degree of uncertainty will make it easierfor companies to apply changes to the existing buyer journey.
  • An improvement in the chosen loyalty metric should always result in improved financial performance.

What is the Net Promoter Score (NPS)?

NPS is a growth indicator that helps find out how many customers are satisfied with your services, how many of them are loyal to your brand, and how likely they are to recommend your brand to their social network.

This customer satisfaction measurement tool allows companies to predict customer churn rate and identify customers that need an extra push to become loyal.

Net Promoter Score surveys are generally short and straightforward. These surveys commonly feature one question asking customers, on a scale of 1 to 10, how likely they are to recommend a brand’s products or services to other people.  Here ‘0’ means ‘very unlikely’ and ’10’ means ‘very likely.’

The customers that rate your ‘0-6’ are detractors or customers unhappy with your services. Passives or customers that rate you ‘7-8’ are people that like your company but still aren’t sure about becoming loyal.

Customers that are in love with your company and products will rate you ‘9-10’. These consumers turn into promoters and hence are highly profitable for your company.

NPS = (Percentage of Detractors) – (Percentage of Promoters)

The NPS scores range as follows:

NPS Score Result
<0 Bad
0-30 Good
30-70 Great
>70 High loyalty

What is the Customer Satisfaction Survey (CSAT)?

Customer Satisfaction (CSAT) survey is another CX metric that allows companies to measure customer satisfaction levels. It directly reflects how happy customers are with your business or the changes you recently brought in your products and services.

CSAT surveys learn about customers’ satisfaction with a particular product, service, or interaction. Respondents rate the company from ‘very unsatisfied’ to ‘very satisfied.’ You can even let them rate in the 1-5 or 1-10 range.

The answers or customer satisfaction range can be customized to make the survey more relevant to your brand. Not just that, you can even ask multiple questions (open-ended and closed-ended) in one survey!

Once you have the data, you will want to calculate the CSAT score by taking an average of the results. The scores are expressed in percentages.

CSAT Score = ((Satisfied Respondents) / (Received Responses)) * 100

For example, if 70 people out of 100 respondents in the survey marked themselves ‘satisfied’ with your services, your CSAT score will be 70 percent.

Critical differences between CSAT and NPS

By now, we have learned what NPS and CSAT mean and how companies can put these customer satisfaction measurement tools to use. It’s time to discuss some of the most significant differences between the two and find out which tool is better for your business. Let’s get started.

1. What are their purposes?

Both CSAT and NPS help understand customers’ behavior and predict long-term business growth. However, each of the tools has its own way of achieving the end goal.

CSAT surveys measure customers’ satisfaction in a specific area, operation, process, or aspect of your business. The survey helps companies improve how they function.

On the other hand, NPS measures overall customer satisfaction. Companies use the NPS survey to measure customer loyalty. In other words, businesses get to know whether or not their existing customers will recommend their products and services to other potential customers.

2. Where can you put them in a buyer journey?

It is essential to know when companies should use surveys in a buyer journey. You cannot use CSAT and NPS surveys in a single stage of the buyer journey. Here we break down the instances where you can measure CSAT and NPS.

CSAT should be measured whenever a customer reaches or completes a meaningful milestone. These touchpoints can be as follows:

  • Closing of a support ticket. In this, you can measure how well the representatives performed and the overall quality of your customer support service.
  • Ending of the trial period. Do you offer a trial period for your SaaS product? Place a CSAT survey at the end of the trial to see if the customers found the product useful. The survey will even help bolster your remarketing/retargeting campaigns.
  • After customers make a purchase. Conversions are always helpful for business growth. However, you should know how the customers felt while going through the buying process. Did they encounter any issues or bottlenecks that made their customer experience worse?

NPS is generally measured when the buyer’s journey ends. You will want to use them at neutral touchpoints as you are looking to measure overall customer satisfaction. Here are some of the touchpoints you should consider using NPS in.

  • A major shift in service or product. Did you introduce a major update in your services or products? Did you merge with another business? Use NPS to fathom brand perception.
  • PR crisis. Brands can use NPS to measure rapport with the customers after a PR crisis.
  • Regular NPS surveys. Since NPS surveys help measure overall customer satisfaction and brand loyalty, brands send them regularly and collect data to analyze brand happiness over a period.

3. Analyzing macro and micro-level metrics

When it comes to collecting and measuring customer satisfaction at different touchpoints, it is quite clear that CSAT surveys focus on analyzing at the micro-level while NPS doubles down on macro-level metrics.

This is why we suggest brands involve both the customer satisfaction measurement tool as they will achieve a more precise overview of the customer experience.

The qualitative data, measured over a period, will help understand what makes the customer happy or unhappy. More importantly, it will increase the chances of developing a customer experience that expedites business growth.

Pros and Cons of using NPS and CSAT surveys

Customer Satisfaction (CSAT) surveys

Advantages Disadvantages
Flexible customer satisfaction metric. Only reflects short-term customer experience or sentiment.
The rating scale can be tied to the context. Stricken with cultural bias.
Allows using different survey formats (simple to complex). Results could be skewed by customers who didn’t bother filling the survey seriously.
Inaccurate results due to fear of admission.
Doesn’t tell anything about customer loyalty.

Net Promoter Score (NPS) surveys

Advantages Disadvantages
Offers proper customer segmentation. NPS surveys require follow-ups
NPS surveys are accurate and unbiased since questions are broad in nature. Can create a ‘tunnel vision’ effect where businesses turn complacent after a high NPS score.
Long-term customer satisfaction metric.
Surveys are realistic as the sample covers the entire customer base.
NPS surveys get a higher response rate.

Which is better – CSAT or NPS?

So, which customer satisfaction measurement tool is better? To answer that question correctly, brands will have to figure out whether they want to evaluate customer satisfaction in the short term or long term.

Most brands will use both NPS and CSAT as this tactic helps monitor the overall quality of customer experience and, at the same time, improve customer happiness at targeted interactions and touchpoints.

Which customer satisfaction measurement tool makes the most sense to you? Which one would you use for your brand? Let us know in the comments. If you loved reading this post, don’t forget to check out other informative posts on the blog!

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