It is said, that you can’t manage if you can’t measure effects of your actions. Organizations all over the world are looking for the ideal question / measure, that will allow to gauge and predict customer loyalty.
The result is a specific “arms race” that leads to a new question. Which metric and question is the best one? To find an answer we compared three different frameworks – CSAT, NPS, CES.
Customer Satisfaction Score (CSAT)
Longest in use but also most often criticized measure; mostly for a week customer loyalty prediction possibilities.
Question
How satisfied were you with your recent product? or How would you rate your overall satisfaction with the service you received?
Scale
very dissatisfied 1 – 2 – 3 – 4 – 5 very satisfied
very dissatisfied 1 – 2 – 3 – 4 – 5 – 6 – 7 very satisfied
Organizations use different questions and scales to measure customer satisfaction. The most popular are 5 and 7-point Likert scales. The bigger CSAT value the better.
Satisfaction management doesn’t finish on simple measures. A common and good practice is to automatically direct each customer that scores service on level 3 (level 4 for 7 points scale) or lower to quality assurance team or proper manager.
CSAT is most often used to measure customer satisfaction from the level of service. It can be also used to monitor impact of changes in training and procedures on customer satisfaction.
Net Promoter Score (NPS)
NPS metric have been introduced in 2003 (in the HBR article), as an alternative to CSAT that can serve as a better measure and predictor of customer loyalty.
Question
How likely would you be to recommend our company to a friend or colleague?
Scale
very unlikely 0 – 1 – 2 – 3 – 4 – 5 very likely
very unlikely 0 – 1 – 2 – 3 – 4 – 5 – 6 – 7 – 8 – 9 – 10 very likely
Formula
NPS = %Promoters – %Detractors
The higher is metric value the better.
Customer Effort Score (CES)
Introduced by Corporate Executive Board (HBR, 2010), as an alternative to NPS. It has been based on the assumption that the key to customer loyalty is answering his basic needs in the most convenient (for the customer) way.
Question
How much effort did you personally have to put forth to handle your request?
Scale
very low effort 1 – 2 – 3 – 4 – 5 very high effort
CES = total sum of scores / number of scores. CES values come between 1-5, the lower metric value the better.
So which metric we should choose?
The answer to this kind of question is not that simple. Each metric can work and prove valuable in certain situations.
| CSAT | NPS | CES | |
|---|---|---|---|
| Scale | usually Likert scale (1-5 or 1-7) |
numeric scale (0-10 or 0-5) |
numeric scale (1-5) |
| Question | several questions | single question | single question |
| Main advantage | ability to measure satisfaction in multiple touchpoints | ability to identify customer expectations and service level | ability to measure customer effort |
| Main disadvantage | week customer loyalty indicator | difficult to compare between industries and cultures | lack of ability to measure other aspects of customer experience than direct interaction with a company |
| When to use | to understand customer satisfaction in different touchpoints | to measure customer experience on the organizational level | to measure customer experience and effort on the transactional level |
References
- Stop trying to delight your customers, July 2010, Matthew Dixon, Karen Freeman, and Nicholas Toman
- The One Number You Need to Grow, December 2003, Frederick F. Reichheld