Customer Experience Metrics: NPS, CSAT or Customer Effort: Explained!

If you’re trying to pick the right customer experience metric for your CX improvement efforts, we can help you work out which is best.
NPS, CSAT and CES all have their pros and cons, but one will work for you - we’ll show you how to pick.
We’ve helped hundreds of organisations improve customer satisfaction, so use our experience to accelerate your own CX improvement.
Our founder, Guy, will take you through the pros and cons of each metric, and explain when to use each, and how you can combine them for extra effect.
Just as importantly, Guy will outline the other important steps you need to take (apart from getting the right metrics), to make sure your customer satisfaction project delivers results!
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Read more at: www.customersu...

[@Incamal]

Great & simple!

[@Customersure]

That's exactly what we aim for! Thank you for taking time to comment.

[@NarifaMohamed]

Great explanation! This helped me a lot

[@torgom.bleyan]

great job

[@Customersure]

Hi Tom - Thanks for the kind comment! Guy

[@syarifusman27]

we use all of them... CSAT, NPS, CES & ServQual as well...

[@Customersure]

Thanks for the comment. It's good to use the metric(s) that are most appropriate to the customer at any given step in the customer journey.

[@kabirgarba9942]

By enlightening. Thanks

[@tacosnachosburritos]

Who needs an MBA with KZbin?

[@leoofgl]

Very thank you!!!

[@admiralhipowa7158]

Are NPS & CSat supposed to be used against employees, for example, bonus etc? How does NPS & CSat differentiate between a score customers give to the company product & the employee the customer interacts with? My experience is that employees suffer from bad scores because customers are unhappy with the product or price they are being offered, so is it fair to use that low score against an employee on a monthly basis for something that is beyond the employees control. Can somebody please answer this for me.

[@Customersure]

You make a helpful point, thanks for the question. I agree that bad targets demotivate good employees. (Here are some better targets to set: www.customersure.com/why-you-shouldn-t-set-a-target-for-customer-satisfaction-score-and-the-better-targets-you-should-set/ ). Customer experience metrics like NPS and CSat are excellent measures. But they are poor targets. Look up Goodhart's Law for the best explanation. The strength of NPS is that it measures a customer's loyalty to the organisation 'all things considered'. It is a good indicator of whether a customer is likely to stay or to leave themselves, and it is a good measure of how confident they are to risk their personal reputation by giving a word-of-mouth referral to a friend or colleague. This willingness to recommend is based on the whole experience of dealing with the company - product, service, people's behaviour, commercial policies, business processes, brand reputation, corporate and social responsibility....everything about the organisation. So it is not only unfair to use NPS to measure the performance of an individual, but also nonsensical from a business point of view. And as if that weren't enough reason, it is also open to abuse. 'I won't get my bonus unless you score us a 9 or a 10, so I can't feed my children'. Setting NPS as a target, individual or corporate, drives poor behaviours which end up making the score unreliable and, well...how would you feel as a customer if someone told you to give a high score for that reason? It's a true example by the way, from an employee at a company that really should know better. CSat it better suited to measuring individual performance, it's good for measuring quality of service or quality of product. For example, "How satisfied were you with the adviser who took your call?" But for the same reasons as NPS, it's good when used as a measure of performance and bad when used as a target. For targets, stick to 'hard' goals which are direct measures of the business. NPS and CSat are proxies which can be gamed and manipulated, which in the extreme case means you could have declining profitability despite an (apparently) excellent NPS. Better targets to set are profitability, rate of new customer acquisition, customer retention. NPS and CSat then play a part as your diagnostic measures - they help you to find and fix the problems that are hindering your growth, profitability and retention.

[@tastyyummyrecipes2702]

How to show cost reduction when CSAT is increasing. Because usually when CSAT increases, cost also increase for that particular activity which we started to increase CSAT. Is there any way here to show cost reduction??

[@Customersure]

It's a good question, thanks for raising it. And a tough one to answer in a big organisation which wants simplistic answers to multi-variable problems. It's interesting that you see costs rising as CSAT rises, I don't see that happen everywhere but it's not necessarily a bad thing. For example, if your company is growing because of successful marketing, you'll probably keep investing in marketing so the cost of that will go up too. High costs are only a bad thing if they are not delivering profitable growth. My suggestion would be that rather than looking for a narrow cause and effect relationship between CSAT and cost in an environment where many other factors are at work, instead look at hard metrics like new customer acquisition, customer retention and profitability. If they're growing strongly then spend more on the things that are delivering those results, such as CSAT initiatives.

[@omega.n]

🙌🍀

[@osamasharinghisthoughts]

How do you calculate Customer Satisfaction Index?

[@guyletts8442]

Thanks for the question. There's no recognised standard for CSAT in the way that there is for NPS, for example, so you're free to calculate it how you like. Perhaps the most common way is to sum all the scores and divide it by the number of respondents. Do pay attention to make sure that the number represents customer experience as a whole - so measure it across all steps in the customer journey, and all segments of your customer base. Once you've chosen how you want to calculate it, just keep doing it the same way, and once you've established how to do this on an ongoing basis, then move on to the far more important job of trying to improve the scores you receive. DO NOT under any circumstances compare your CSAT (or NPS, or any satisfaction score) with any other company. It is impossible because you will never be comparing 'like with like'. This is a fruitless distraction which does not benefit your customer or your organisation. Take comfort - it doesn't matter how you've calculated it. The most valuable thing for a business is not its score, but how you respond to each customer who responds. Have they given you praise? Make sure it reaches the person who dellivered great service. Have they suggested an improvement to your business? Thank them and tell them what you are going to do about their suggestion. Have they told you about a problem they're having as an individual that's making them unsatisfied? Fix it, immediately. This approach is the way to IMPROVE satisfaction, which should be the only reason why you would ever measure it.

[@osamasharinghisthoughts]

@@guyletts8442 thanks a lot for such a comprehensive reply and guidance.

[@tacosnachosburritos]

@@guyletts8442 This is awesome, I had the same question as @osamawaheed.

[@Customersure]

@@tacosnachosburritos Hi, Daniel. Glad it helped!

[@astongonsalves66]

Formula for CSAT call center

[@sondralarkins4196]

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