NPS Vs. CSAT: Which is a better measure of customer satisfaction?

Customer satisfaction is a cornerstone for business success, providing invaluable insights into customer behavior, perceptions, and experience. Regularly assessing customer satisfaction will help you to:

• Identify areas for improvement

• Make data-driven decisions

• Elevate the customer experience

Surveys are an effective tool for gauging customer satisfaction. They allow companies to:

• Understand customer perceptions

• Foster brand loyalty

• Increase customer retention

• Drive sales growth

Net promoter score (NPS) and customer satisfaction (CSAT) score are two widely adopted metrics for gauging customer satisfaction. Both survey types include a single, close-ended question to determine satisfaction scores, and open-ended questions to gain an understanding of the reasoning behind each score. While both assess customer happiness, they each possess unique characteristics.

This article provides a thorough comparison of NPS and CSAT, and offers guidance on which metric is better suited for measuring customer satisfaction. 

Let's jump into our in-depth comparison of NPS and CSAT.

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NPS and CSAT serve distinct purposes, so companies can use both metrics in conjunction to get a complete picture of their customer's experience and satisfaction.

NPS: A measure of overall brand satisfaction

NPS takes a long-term view by gauging the overall satisfaction and customer loyalty towards a brand. It is a more comprehensive measurement that provides insight into a customer's relationship with a company, rather than their experience of a single transaction.

It is a more relational tool than CSAT and provides businesses with macro-level insights.

CSAT: A measure of short-term satisfaction

CSAT measures the level of happiness a customer experiences after a recent interaction with a brand. It provides an immediate evaluation of a specific transaction, such as after making a purchase or closing a support ticket.

It is a more transactional tool than NPS, allowing businesses to analyze interactions or experiences at the micro level.

The net promoter score (NPS) is a widely employed metric to assess customer satisfaction and devotion. It provides valuable insights into the likelihood of customers recommending a brand, service, or product to others.

NPS surveys tend to have a single question that asks customers something like:

"How likely are you to recommend our product/service/company to others?"

This type of question is usually accompanied by a scale of 0–10, where 0 represents "very unlikely" and 10 represents "very likely.

How is NPS measured?

Based on their answers to your NPS survey, respondents are classified as promoters, passives, or detractors.

Detractors/demoters

These are respondents who select scores between 0 and 6. Detractors tend to be unhappy with your offering and can harm your reputation by sharing negative feedback.

The NPS score and the analysis of the open-ended responses can shed light on factors contributing to customer unhappiness and dissatisfaction with your brand. This allows you to address the issue promptly. It is also advisable to reach out to detractors to discover the root cause of their dissatisfaction and offer a solution.

Passives

Passives are respondents who give scores between 7 and 8. They tend to be indifferent and can easily seek alternative solutions elsewhere.

It’s crucial to try and exceed these customers' expectations to avoid them switching to your competition. To understand why these customers gave average scores on your survey, analyze NPS responses to queries like: "What can we do to improve your experience?”

Promoters

Promoters are customers who select a score of either 9 or 10. They tend to be the brand's main advocates. Promoters are happy with the general customer experience. As such, they are willing to market your brand to their friends and colleagues.

Advantages and disadvantages of  NPS

Let’s take a look at the pros of NPS.

• Simplicity: customers love NPS surveys because they are short, quick, and straightforward

• Clear feedback: NPS offers feedback with clarity compared to other survey methods

• Measure of loyalty: NPS is widely recognized as a metric for measuring customer loyalty. By analyzing your customers’ attachment to your brand, NPS provides insight into the effectiveness of your word-of-mouth marketing.

• Measure of employee engagement: NPS can also be a tool for evaluating employee engagement, providing insights into employee satisfaction and the potential for skill development and improvement

• Discovery of your ‘fans’: an NPS survey helps you meet your brand advocates

• Real-time data: NPS allows real-time data collection, enabling quick follow-ups with dissatisfied customers

• Helps you to improve your offering: NPS enables you to enhance your overall customer experience journey

On the flip side, some drawbacks of using NPS include:

• Limited insight: NPS does not provide deep insights into the views of customers, employees, stakeholders, or prospective customers. An NPS score allows you to ask only a single question, which isn’t enough to understand why someone left a negative or positive rating. It can be almost impossible to ask why they like doing business with you, what your drawbacks are, and how you can improve your offerings.

• Not ideal for exploring employee issues: NPS is not always the best tool to address employee issues and does not provide a way to understand employee well-being or feelings

• Poor predictor of behavior: NPS surveys are a poor predictor of what customers are likely to do because none of us know how we will feel about something in the future

How to increase NPS score response rates

There are several best practices you can follow to help increase your NPS response rates:

• Include the survey in the emails you send customers and prospects. Personalize the survey by including the customer's name and relevant details about their recent experience.

• Use clear and concise language in your NPS survey so that customers understand what they are being asked.

• Keep the survey short and to the point to increase the likelihood of customers completing it.

• Use a clear and simple scale, such as from 0 to 10. For a mobile app survey, you can use a shorter 5-point scale because it is more compact and needs less screen space.

• Follow up with customers who provide feedback to thank them for their response and address any concerns they may have raised. This may encourage them to complete future surveys when asked.

• Track response rates over time to gauge the effectiveness of your NPS survey and make necessary adjustments to future surveys.

Customer satisfaction (CSAT) score is a service metric or KPI that organizations use to measure how happy their customers are with their brand, services, products, or particular interactions during the buyer's journey.

CSAT scores are valuable indicators of product repurchase and customer retention. They also provide an in-depth understanding of customer expectations and sentiments towards your brand.

Unlike NPS, which measures overall customer experience and perception, CSAT focuses on specific interactions, making it easier to pinpoint areas for improvement.

How is CSAT measured?

The purpose of CSAT surveys is to gauge customer happiness after a recent experience or meaningful touchpoint, such as completing a transaction, or before a key milestone, such as subscription renewal. These surveys usually have a single question that asks customers something like:

"Overall, how satisfied were you with your experience with us?"

Customers can also be asked to rank a recent experience on a Likert scale of 1 to 5, or 1 to 10.

Once you have the responses to your CSAT survey, you can calculate your CSAT score. The method for this is to divide the number of satisfied customers by the number of survey responses. To express this as a percentage, multiply the result by 100.

A good CSAT score is usually determined by your industry benchmark:

• Low score: customers are dissatisfied. You need to improve certain aspects of your business operation.

• Medium score: customers are indifferent. You may need to analyze some aspects to impress indifferent customers.

• High score: you exceeded your customers' expectations by providing an excellent customer experience.

CSAT surveys also include open-ended questions to gather further details of customer experience. Analyzing this qualitative and quantitative data together gives a clearer picture of how your customers view your business.

Maximizing the use of CSAT scores in your business

Your CSAT scores are powerful tools that can provide valuable insights into how your customers perceive their recent interactions with your brand.

Here are some  ways you can leverage CSAT scores in your company:

• Gauge customer satisfaction after a purchase or trial period: Use CSAT scores to gauge the thoughts and opinions of your customers and target audience on recent interactions with your brand. These scores can help you understand their level of satisfaction and identify any potential issues.

• Monitor key interactions: Collect CSAT scores after customers make a purchase, complete a trial period, or close a support ticket. These scores can provide a deeper understanding of what your customers like and dislike about your offerings and support, allowing you to make data-driven decisions to improve these areas.

• Identifying areas for improvement: Analyzing CSAT scores can help you identify areas of your business that need improvement and can guide your decision-making process as you work to enhance the customer experience. By regularly tracking CSAT scores, you can monitor your progress over time and make necessary adjustments to maintain high levels of customer satisfaction.

How to increase CSAT score response rates

High response rates to CSAT surveys can provide valuable insights into areas of your business that need improvement and strengthen customer relationships. Here are some best practices to help increase CSAT score response rates:

• Include the survey in emails you send to customers and prospects. Incorporating the CSAT survey within existing email notifications makes it more immediate and convenient for them.

• Use an engaging and compelling subject line to encourage customers to open the email and fill out the survey

• Place the survey at the top of the email and use interactive question styles like five-star ratings to make the survey more engaging

• Directly reference the customer's recent experiences in the questions to make it easier for the customer to respond

• Keep the survey short and simple to increase the likelihood of customers completing it and providing valuable feedback

• Reward survey responders with incentives to increase response rates

• Track response rates over time to gauge the effectiveness of your CSAT survey and make necessary adjustments

The two types of surveys are sent at different stages of the customer journey.

The best times to measure CSAT include:

• After customers make a purchase, to identify potential issues and bottlenecks

• After customers finish a trial period, to find out if they found the product useful

• After customers close a support ticket, to evaluate your support staff's performance and customer service quality

The best times to measure NPS include:

• After a PR crisis to gauge brand perception

• After making significant changes, such as mergers with another business or a shift in your offering

• At the end of a buyer's journey

It is impossible to convert NPS to CSAT and vice versa. NPS and CSAT are complementary approaches to gathering customer feedback. The two metrics measure different aspects of your customers' perception of your brand. NPS and CSAT are best used together.

CSAT and NPS serve varying purposes. While NPS is a better measure of long-term customer loyalty, CSAT is a better measure of user satisfaction and short-term customer loyalty.

As such, if you want to determine which of the two is the best, you must first clearly define what you intend to measure.

Use CSAT if you want to understand how your customers feel about a certain product, service, or interaction. NPS is the better option if you want to measure customer loyalty based on their feelings about the entire customer journey.

When considering which customer satisfaction metric to prioritize, it's important to align it with your goals. As we’ve already seen, CSAT is a useful tool for identifying areas for improvement and measuring specific customer experiences. NPS is a valuable metric for tracking long-term customer opinions and assessing changes over time, including the impact of company alterations and marketing campaigns.

For CSAT, a versatile survey design that allows for multiple questioning lines can provide insights into product quality and customer support efforts. NPS offers a benchmark against competitors and a measure of the impact on customer loyalty.

Supplementing quantitative NPS scores with qualitative customer feedback can provide a more complete picture of customer sentiment. Partnering with a solution provider can help determine the most effective metric for your business needs. Regular benchmarking and follow-up surveys after significant events can help track changes in public perception of your brand.