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SURVEY METHODOLOGIES

Customer Satisfaction Metrics

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What are “Customer Satisfaction Metrics”?

Customer experience, abbreviated as “CX”, is of utmost importance to all businesses. Most businesses strive to ensure high customer satisfaction in order to retain their existing customer base and gain potential new customers as well.

There are various customer satisfaction metrics, or tools, that allow businesses to quantify customer experience (CX) and satisfaction, in order to identify problem areas and improve on them.

Types of Customer Satisfaction Metrics

The most commonly used metrics to measure customer satisfaction are:

  1. Net Promoter Score (NPS)
  2. Customer Satisfaction Score (CSAT)
  3. Customer Effort Score (CES)

In this article, we delve into each one of these three metrics, along with their advantages and disadvantages.

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    Net Promoter Score (NPS)

    Net Promoter Score, or NPS, is a customer satisfaction metric that quantifies customer loyalty and satisfaction through surveys. In an NPS survey, there is usually just one question, and it’s always along the lines of “How likely are you to recommend us?”. The question will then follow with a 10 point scale allowing respondents to choose between 0 to 10. The lower the score, the less likely the customer is to recommend the company and the higher the score, the more likely they are to do so. 

    Respondents/customers are then categorized into the following groups based on how they answered the question.

    1. Promoters are the customers who choose the score 9 or 10. Promoters are most likely to enhance a brand’s reputation and spread a good word about it.
    2. Passives are the customers who choose the score 7 or 8. These customers like the company but maybe not enough to spread a good word about it, however they are also unlikely to spread a bad word about it.
    3. Detractors are the customers who choose between the scores 0-6. These are the clients who are unhappy with the company, some may even discourage potential customers away from the business, whether through word of mouth or even a social media post.

    How is NPS Calculated?

    NPS is calculated as follows:

    NPS= % of promoters – % of detractors

    NPS will always be expressed as a number between -100 to 100. 

    What is a good NPS Score?

    NPS can range between -100 to 100. If the score is negative, the company has more detractors than promoters and if the score is positive, the company has more promoters than detractors which is favourable. A good score, however, for most big companies is a score of 50+.

    Advantages of Net Promoter Score

    1. Allows for customer segmentation, and gives the business a clear idea of which customer groups they must focus their efforts on.
    2. Quick and easy for customers to answer as they usually have to respond to just one question.
    3. It has accurate and realistic surveys as all customers are asked this question and it gives an honest reflection of the customers’ overall perception of the brand.

    Disadvantages of Net Promoter Score

    1. Need for additional research as companies can’t rely on the response to just one question.
    2. Inability to find the customer’s reasons for their respective rating; NPS is calculated so that a business can quantify customer satisfaction, however it provides no direction as to where improvements need to be made within the business.
    3. Is not relevant for all business types; for instance in a B2B environment where the majority of a business’ income comes from a few large customers, this one-question metric may not be too effective.
    Customer Satisfaction Metrics customer satisfaction metrics

    Customer Satisfaction Score (CSAT)

    Customer Satisfaction Score, or CSAT, measures customer satisfaction levels. CSAT surveys usually have a question about a customer’s satisfaction in regard to the brand, for example “how would you rate your overall satisfaction with the product you received?”. Some CSAT surveys will have more than one question when the company wants to create a more in-depth survey.

    Different kinds of scales can be used such as a five-point or ten-point numeric scale, or even the likert scale ranging from “very satisfied” to “very unsatisfied”.

    How is CSAT calculated?

    CSAT is calculated as follows:

    CSAT = (Happy Customers ÷ Number of Customers asked) x 100

    CSAT scores are generally represented as a percentage. 

    What is a good CSAT Score?

    The higher the percentage, the more satisfied is the company’s customer base. Typically, a good CSAT score will be one that is 75% or more, however this may vary across different industries.

    Advantages of Customer Satisfaction Score

    1. Allows for the use of different formats; CSAT surveys can have multiple questions allowing businesses to get more in-depth responses from their customers.
    2. Allows for the use of different rating scales; such as the likert scale, numeric sales or even emojis.
    3. Easy and quick for customers to fill.

    Disadvantages of Customer Satisfaction Score

    1. Often only reflective of a customer’s short-term attitude toward the company; customers may give their rating based on their most recent interaction with the company, rather than a more holistic response.
    2. Subjectivity of responses; customers may have different standards and interpretations for their own “satisfaction” making results less reliable when quantified.

    Customer Effort Score (CES)

    Customer effort score, or CES, is a metric that strives to measure the ease of experience the customer had in regard to their interaction with the company. 

    Similar to NPS surveys, CSAT surveys also generally use a single question to ask their clients. Respondents are asked to rate their experience from “very difficult” to “very easy”. This metric gives companies an idea of how easy or difficult it was interacting with their company.

    How is CES Calculated?

    CES is calculated as follows:

    CES = % of customers who had –  % of customers who had an easy experience a difficult experience

    This score requires the calculation of the percentage of customers who had an easy experience with the company, and the percentage of customers who had a difficult experience with the company before the CES can be calculated.

    What is a good CES Score?

    There is no defined standard for a good CES score as it varies significantly across companies.

    However, similar to NPS, a positive value is a good indication as it means the number of users that had an easy experience with the company is more than the number of users with difficult experiences. The higher the CES score, the better.

    Advantages of Customer Effort Score

    1. Reliable predictor of future purchasing behavior; most customers who rate a company with “low effort” will usually repurchase from the company.
    2. Could indicate the way customers regard the company; customers that rate the company as “high effort” may be less likely to speak well about the brand in comparison to those who select “low effort”.
    3. Gives data specific to client interaction; vaguely locating problem areas within the business.

    Disadvantages of Customer Effort Score

    1. Doesn’t find reasons as to why customers scored them the way they did; CES gives a company an overall idea of customer ease of experience but can’t be used as a tool to figure out what factors contributed to their rating.
    2. Limited to services; and businesses may not be able to use this tool to get input on other areas of their company.
    3. Possibility of other influences on score; some customers may give a company a bad CES rating on the survey for reasons that may not have to do with customer ease. For example, competitors and pricing may have an influence on this rating.

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