CSAT vs. NPS is an inevitable comparison that surfaces whenever a company launches a Voice of the Customer (VoC) program to optimize their customer experience (CX) strategy.
A Voice of the Customer program focuses on gathering and analyzing customer insights so you can identify trends regarding your customers’ needs, wants, and expectations. In essence, VoC gives your customers a voice within your organization.
While these metrics are not difficult to calculate, they’re not always intuitive to action. They’re used in different ways to make different decisions. Understanding the differences is vital to making meaningful improvements to your business. In this article, let’s explore CSAT vs. NPS so you can use them effectively to drive more revenue through happier customers.
CSAT vs. NPS: an overview
To briefly introduce these metrics, let’s look at when to use them and how to calculate them.
The Customer Satisfaction Score (CSAT) is typically related to a specific interaction. This interaction could be a support ticket, an onboarding session, a sales process or a particular feature of the product.
It revolves around the question: “How would you rate your experience with [placeholder of brand name]?” You can also add an option for the respondent to leave a comment and explain his or her rating.
The rating scale is usually a 1-5 scale with the options ranging from very satisfied to very dissatisfied. CSAT is measured by calculating the percentage of satisfied (score 4) and very satisfied (score 5) responses. The equation being: number of satisfied customers (4 and 5)/number of survey responses x 100 = percent of satisfied customers. A CSAT score of 80 percent is a good indicator of success, although it will vary by industry.
Net Promoter Score (NPS) asks a similar question: “How likely is it that you would recommend [company] to a friend or colleague?”
It’s rated on a scale of 0-10 or 1-10. The question is about a broader experience with your organization, and overall product or services. On the rating system, people who select 9 or 10 on the NPS survey are considered Promoters, people who select 7 or 8 are Passives, and people who select 6 or below are Detractors.
To calculate the NPS score, you subtract the percentage of Detractors from the percentage of Promoters (percent Promoters – percent Detractors = NPS). An NPS rating score above 0 is considered good, an NPS score above 50 is considered excellent, and any score that is 75 and above is considered world class.
The calculation focuses on the concept of Promoter vs. Detractor. As an example, let’s use something we’ve all done—eaten at a new restaurant:
- Promoters are people who will actively tell others about the restaurant. Think of when you came into the office the day after visiting a new restaurant and talked about the excellent service or great food and atmosphere without prompting. These comments are actively promoting a particular restaurant.
- Passives are people who could have enjoyed the restaurant, or may have a few complaints, but aren’t swayed enough to actively speak about the experience either way. If prompted by a friend asking about a place to eat, you may or may not recommend the venue to them.
- Detractors are the people who actively tell you not to visit a place. These are the people who had a bad experience, awful food, or rude service and are unlikely to visit again and will often tell others not to go.
CSAT vs. NPS: a detailed comparison
CSAT and NPS are not interchangeable. They are complementary to each other and need to be used appropriately for maximum benefit. It’s not a matter of which is better or worse. It’s about the positive impact using them correctly can have on your customers’ experience.
Who, when & where to engage with customers
CSAT is used to measure a specific interaction with a customer. It lets you know that the service or action was satisfactory. The CSAT survey should be sent to a potential respondent either directly after the action you are trying to rate, or be a part of the action itself. The respondent is always the specific person(s) involved in the action.
Examples of how to engage a user are:
- When a support ticket is closed
- When a CSAT survey is emailed out
- After logging into a web app, etc.
Conversely, you do not want NPS to be tied to a specific event. NPS surveys should be sent out either on a cadence, for example quarterly, or tied to some seemingly random set of actions that a user may accomplish. For example, after completing one or more milestones within your product.
NPS also targets a wider audience than CSAT. The survey should be presented to all stakeholders within the organization. It is essential to understand not just the users’ opinion of your product and services, but also the decision makers and the business’ opinions.
This best practice ensures you’re getting a good overview of the entire lifecycle of your customer experience, from the sales process to implementation and usage, through to the business value you are driving.
To accomplish this outcome, you may need to have a mix of places where the survey is delivered. In-product NPS surveys are popular and made easier with survey tools, but they only target users. Surveys sent out via email can target other stakeholders.
Creating positive outcomes
One significant similarity between the two is that the metrics themselves are not directly actionable. Ratings of 75 percent CSAT or an NPS of 22 by themselves cannot be used to make a change.
As mentioned above, to drive positive outcomes, you should always include a follow-up question with your survey. For example: “What was the main reason you selected that rating?” or “What could we have done to improve your rating?”
Once you have that information, you can make a meaningful change. Even with that data, however, the expected outcomes from CSAT and NPS should be different.
Customer Satisfaction Score (CSAT) responses should be used to alter the specific experience that isn’t satisfactory or expand similar traits to other experiences if it is satisfactory. For example, if you have a lot of positive ratings and the reasons are because of the low effort to access your knowledge base, you could expand your knowledge base to include other departmental FAQs. Alternatively, if the ratings are negative because of the wait times in connecting the caller to a person, you would want to alter the phone system process.
Net Promoter Score (NPS) has less of an ability to drive specific outcomes, but it is excellent at discovering themes. Focus on correlating keywords within the follow-up question responses to the numeric rating. Trends might emerge such as, Detractors are really dissatisfied with the product quality, and Promoters love having active account management. Identify these trends and use those to create annual goals for your team or a task force to dig deeper into the results.
CSAT vs. NPS: how to use each effectively
Making the most of CSAT and NPS takes time and discipline. It’s easy to collect data; it’s hard to put it to use for your company.
Tie your responses to meaningful action
To effectively use CSAT and NPS, you need to have processes in place that allow you to assign ownership to common feedback themes. If you use a Customer Engagement Tool (CEM), you can often directly link a response to an assignable action. For example, if a particular account has two or more Detractors or has an unsatisfactory experience, send an action to the CEM which will assign it to their account manager or success manager to follow up.
Staying ahead of problems by engaging with the most at-risk customers in real-time will show you care about the customer journey. These meaningful and visible actions will also create goodwill and reflect well on your commitment to your customers.
Don’t coast on good marks
A common mistake when it comes to CSAT is assuming that everything is perfect if your rating is high. It’s really easy to see a 95 percent CSAT rating and assume you have achieved near perfection. The fallacy is that satisfaction is the same as overall happiness. For example, I can be satisfied that my support ticket was handled well, the agent was polite, and my problem was solved, but still absolutely furious that I had to talk to support in the first place. I could easily have questions such as: Why couldn’t I self-help? Why is your product quality so low? Why is the UX poor? CSAT measures a specific thing, such as in this example, satisfaction with support.
A high rating does not mean you don’t need to take any action or make any change elsewhere. To present CSAT meaningfully, you need to make sure to explicitly include the question asked so you can avoid confusion with overall sentiment about your organization.
One solution does not fit all
If your business deals with different products, verticals, and customer types, you need the ability to filter your NPS and CSAT to watch for variances between the relevant groups. The calculations for both depend highly on aggregation and can hide variances between different tiers or types of customers. Many mail merge and survey tools allow you to correlate responses to customer metadata which can make this analysis incredibly easy. Once you understand the concerns, you can start to vary your offerings based on the needs of the customer.
Driving internal outcomes
CSAT is an excellent metric on which to set goals for a team, individual, or leader. It makes a lot of sense for a customer support leader to set a goal around high Support CSAT. However, make sure your survey tool allows you to filter out non-related ratings. It isn’t fair to penalize a support team for a rating that refers to a bad product experience or vice-versa.
NPS however, should not be used as a way to set goals for a single team, individual, or leader. Because of the nature of NPS’s calculation, large amounts of effort can translate into smaller increments of change in the metric. Since NPS is a broad metric regarding the entire company, aligning a goal or variable bonus of a specific person to NPS can penalize them for something to which they have no visibility or control. It is good to strive for high NPS as a company, or at the executive level, but not at the departmental level.
CSAT vs. NPS: complementary metrics
Overall, NPS and CSAT must be used as complementary to the overall improvement of your customer experience. There is no “better” metric. Which you use, and when, will depend on what your ultimate goal is. If you want to improve a specific area of your offering, CSAT is there to help, and if you want to get a sense of the public sentiment of your organization, NPS will be more useful.
The single most vital thing you must do to succeed with NPS and CSAT is to use the data. It’s so easy to ask for information, but actually making that data work for you is the real outcome toward which all organizations should strive.