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Measuring Customer Satisfaction: CSAT, NPS and CES

Mathew Maniyamkott

Mathew Maniyamkott

8 min read

Measuring customer satisfaction should be an important metric that points to your success. You have roving sales but face with raging customers, then there is something fundamentally wrong with your business. Well, then you will have to go for a customer satisfaction analysis.

So, how to measure customer satisfaction?

There are many tools for measuring customer satisfaction, but the first part which you need to get right is the conviction that you need to get feedback from your customers.

Three of the most popular metrics for measuring customer satisfaction are as follows:

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

1. Customer Satisfaction Score

It is easy to guess that this is one of the survey methodologies for measuring customer satisfaction. It is calculated by measuring the answers to the questions asked on a scale. The question could be as simple as “How happy are you with the product?”. The survey corresponds to a scale, there is no universal number for the scale, and it could be 1-3, 1-5 or 1-10, in fact, any random number.

how happy are you with the productThe specialty about this method is that it is extremely simple for the customer to answer. You can easily get the customer to respond, thanks to the scale which makes it specific. As someone who is interested in measuring customer satisfaction, you can see the level of satisfaction you achieved.

There is no requirement on the part of the customer to outline any of the experiences in words, it is usually a radio button where the answer needs to go. This type of customer survey takes less time to finish. Therefore, you can apply this for multiple experiences for measuring customer satisfaction.

When should you use CSAT?

The best time to send a CSAT survey is after you complete at least one milestone with the customer, it could be after onboarding, after the installation and setup or even after the first service. This is because, at this point the customer has a decent idea of the kind of service you offer. You can also benefit from sending a survey after each milestone so as to know how you are faring as a business and take corrective measures.

You can conduct the survey at many points in the customer journey. Make sure you take the survey results into cognizance and take steps to ensure the customer gives the highest rating possible on the scale.Conducting these surveys constantly will keep you on track even if your firm doesn’t add any feature or plan any major launch. This constant feedback will be helpful for you to monitor your progress and act accordingly.

How to implement CSAT in your business:

CSAT is one of the best customer satisfaction metrics and getting a high CSAT score is the dream of most businesses. Once you have the numbers that show what a customer thinks about your business, the next question that begs is how you use that information for your business.

Experts agree that CSAT score of 3 or less requires immediate follow-up. By getting feedback for existing services and products, you can measure your customers’ satisfaction and meet customers’ expectations by making improvements. By engaging with customers during many levels, you make them feel valued and in turn, increase their loyalty. Take an inside look as well by getting to know what your employees think about your company by asking questions and getting their feedback.

Advantages of using CSAT:

  • It has high response rates
  • The questions are usually simple and short
  • Different types of rating scales can be used based on the context
  • They are easy to implement and cost-effective

Disadvantages of using CSAT:

  • Since it is based on the last association for a customer with the company, it shows short-term sentiment
  • One can never know what a good or bad score is because benchmarks differ across industries and companies
  • Customers who are “dissatisfied” and “neutral” do not fill out surveys usually

2. Customer Effort Score (CES)

It is the type of customer satisfaction survey that measures the ease of an experience with a company for a customer. For example, when a customer buys a product, uses a new feature or does any other action, you can ask how easily did your company make it for them to complete the action. The ease of a given experience is a definite predictor of customer loyalty than directly measuring customer satisfaction.

This customer satisfaction metric concentrates on asking about customer’s experience rather than satisfaction. The easiest way to gain customer loyalty may depend on how effortlessly the job gets done and not just through overtly wooing the customers.

customer effort quote harvard business review

In a CES survey, after the question is posed, it is followed by options ranging from ‘Strongly Agree’ to ‘Strongly Disagree’ with other options in the middle too. There are also surveys that ask a Yes/No question. After answers to these questions, give the option to a customer to add any additional comments or an explanation as to why they gave that particular score. Answers to these questions will give the business ideas on where there have been pitfalls in terms of service and take appropriate action.

What should you use CES for?

CES is the best customer satisfaction metric to use to see if you want to optimize the loyalty of your customers. Why? Because it helps you understand if there are any hassles that you need to get rid of and if there is any customer effort that you can reduce. Here is how you can make the most of CES:

Use it as a real-time feedback system:

When you get your Customer Effort Scores, it shows if customers are unhappy during a particular interaction with your business.  Collecting feedback at regular intervals will help you keep on top of your customer’s problems, so that you can solve it by taking suitable measures at each step. If a customer had to take a lot of effort to complete something, an account manager from your team can reach out to the customer to apologize for the inconvenience and educate them better.

See the distribution and analyze it:

In the CES metric, you need to be aware of both the distribution scores and the average because scores of 1’s and 8’s means something is wrong even if the average is 6. There are chances that some customers might be experiencing a torrid time not able to navigate around your offering at all.

Analyze the distribution, see how much effort the customers have to put. Check for any section experiencing difficulty regarding the same. If there are, find those people and take action to reduce their effort.

Find areas that take high effort:

CES helps you to identify if there are specific areas for customers that they find really difficult to work on. If it is only one section of people having that issue, you can get on a call with them to discuss their travails. But if the pattern is widespread for everyone, you might need to devise ways to make the process easier for them. Find out the areas where the CES score is lesser than the average score and work on them specifically.

Advantages of using CES:

  • High CES scores indicate that customers will purchase in the future. This is not something other methodologies will be able to predict.
  • The results are highly specific.
  • It can predict if customers will indulge with referrals. It is mostly likely to happen when there is a high CES score.
  • You can easily identify between a positive and negative experience.

Disadvantages of using CES:

  • There is no segmentation of customers
  • It cannot measure aspects that is outside of customer experience
  • CES doesn’t address why someone is facing a difficulty using your product

3. Net Promoter Score (NPS)

The Net Promoter Score is a powerful measurement of client satisfaction which asks only one question. Fred Reichheld, a Management Consultant of Bain & Company developed this customer loyalty metric in 2003. The objective behind it is determining a clear and easily identifiable score to compared between industries over time. NPS measures the extent to which a customer is willing to recommend your business’ products or services to their family and friends.

Jeff Bezos word of mouthThe question is framed in the method below:

“How likely are you to recommend brand/product of X to your friends, family, and colleagues?”

The answers are graded on an 11-point rating scale with ‘0’ being most unlikely and ‘10’ being most likely.

The respondents are divided into 3 categories based on the score:

  • Promoters: Responders who give 9 or 10
  • Passives: Responders who give 7 or 8
  • Detractors: Responders who give any score between 0 and 6

You can find the Net Promoter Score by calculating the difference between the percentage of Promoters and Detractors. i.e. NPS= %Promoters-%Detractors. Here’s a free NPS calculator to check your score.

Let’s say you have 30% Promoters, 50% Passives, and 20% Detractors, then the NPS will be +10. Wonder what is a good NPS score to have? One can consider any positive NPS as good.

NPS is used in many large companies for customer satisfaction analysis. The resultant number is unambiguous and easy for all stakeholders to understand as an input to steer the business forward. You can track NPS over time and use it as a benchmark for various products and areas. But that’s not all you can even check your score against the industry average.

Reduce the Passives and Detractors by asking a follow-up question and act upon their complaints. This will boost your NPS in the long run.

Why should you use NPS?

With NPS, you’re asking customers if they liked your product and would they recommend it to their friends or family. Opinions spread faster over social media and all of this boils down to word-of-mouth. It is imperative to measure your favorability in that aspect. In fact, positive NPS scores have a direct correlation with success of the business. From start-ups to some of the biggest MNCs, do not shy away from asking customers bluntly, if they would recommend their business or not. NPS is simple, quick, benchmarkable, quantifiable and standardized, making it one of the most popular customer satisfaction metrics. In fact, more and more organizations are resorting to this metric, thanks to some brilliant NPS software in the market.

Advantages of using NPS:

  • Functional and Interpretable for every stakeholder
  • It allows you to measure at which stage of organization you are in the growth process
  • Since many companies use NPS, you can easily benchmark and see how your organization compares with your competitors
  • Trusted by some of the biggest brands in the world which is a measure of its effectiveness

Disadvantages of using NPS:

  • The model is too simple.
  • It cannot accurately measure customer behavior because people who claim that they will recommend might not necessarily do so.
  • NPS only takes the present customers into account while it ignores non-customers. They are usually the biggest source of Passives and Detractors.

Measuring Customer Satisfaction: Comparing CSAT, CES, and NPS

We have given an outline of each of the three means of measuring customer satisfaction so that you are more equipped to choose one of the best online survey tools based on your requirements. It should be clear by now that there is no one-size-fits-all tool for measuring customer satisfaction. Instead, it depends on your business needs and the customer interaction stage at which you are present. CSAT is a useful metric to measure the short-term happiness of your client. Many consider NPS as a good indicator of customer loyalty as the metric focuses on measuring long-term happiness.

While comparing CSAT and NPS, one can easily argue that the latter is a better predictor. Be it customer behavior or company growth, NPS speaks in volumes. CES provides plenty of actionable information but doesn’t give the motivations behind those actions.

Use the methods in conjunction to get a holistic overview, depending on what the customers expect from you and what they think about the product/service so far. Ask more questions to the customers and dig deeper to understand the motivations behind the answer. That’s how you procure the best results. Using the troika of NPS, CSAT and CES along with follow-up questions along with appropriate actions will give success.

Net Promoter, Net Promoter System, Net Promoter Score, NPS, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.

 

Mathew Maniyamkott
Mathew Maniyamkott

Guest Blogger at SurveySparrow

Regular contributor to various magazines. Passionate about entrepreneurship, startups, marketing, and productivity.

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  • Mohammed Alqudah

    1. What are the possible scales for CES? Is 1-10 one of them?
    2. What are the calculation methodologies? Can I use average?

    • Hi Alqudah!

      The original CES scale ranged from 1-5, as proposed by its creators. And yes, the calculation of CES is carried out by adding the scores and dividing it with the total number of responses received. However, an evolved form of CES now contains a scale ranging from 1-7. The calculation remains the same, though. As you know, low the CES score, the better it is! 🙂

      Hope my answer was helpful, Alqudah!
      Cheers!

      • Mohammed Alqudah

        Appreciate your prompt response, than was really helpful.

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