Get CloudCherry to analyse your customer’s journey, solve problems and delight them
Puma enhanced their ‘Customer Experience’ with the help of CloudCherry.
What is the difference between CSAT, NPS and CES?
CloudCherry | Featured | January 16, 2016
A closer look at a few important customer satisfaction metrics and how to make the most of them.
People say that the IT world is obsessed with acronyms. That’s just because they don’t take a look behind the scenes when it comes to marketers. We adore our acronyms. In fact, we started the acronym trend. If you can string three words together, some marketer will turn it into an acronym and we’ll all follow suit because we like to sound really smart.
Well, we’re going to do the unthinkable and unravel the “great mystery” behind three customer satisfaction measurement acronyms, namely CSAT, NPS and CES.
CSAT – Customer Satisfaction Score
CSAT stands for Customer Satisfaction Score and covers a wide range of questions designed to determine how satisfied customers are with the interaction they had with a brand or a product they just purchased or a service they just used. Essentially, CSAT is used to measure the short-term satisfaction of your customers.
In CSAT surveys, respondents use a 5-point scale to rate the service/product/interaction. This scale ranges from “very satisfied” to “very dissatisfied”. The score is calculated by working out the percentage of customers that rated the service/product/interaction as “somewhat satisfied” and “very dissatisfied” and, generally, companies that hit a score higher than 70 percent think they are doing more than enough.
The Problem with CSAT
The Customer Satisfaction Score is the worst of the three when it comes to forecasting the future behavior of your customers. So, if you had a crystal ball that could show you the future, the CSAT score would not be it. The main problem with CSAT is that it makes the customer focus on the details so much (the delivery of the product, or how polite the customer service rep was) that they forget about the overall relationship/customer experience with the company. The customer might be annoyed that the ordering process took forever but if you ask about delivery, they’ll focus on that and forget about the other issue, at least in that moment. When they buy again, they’ll remember that particular annoyance, and choose someone other brand.
CSAT measures short-term customer happiness, but allows for a lot of ambiguity.
Additionally, the very structure of the scale makes it so easy for customers to flake out. It’s much easier to give an ambiguous answer than it is to commit to a strong viewpoint. Somewhat satisfied could mean a lot of things, including “I wouldn’t use your company again but I’m too polite to tell you that your customer service is terrible.” And let’s not forget that someone who is really unhappy with your company is much less likely to fill out a survey, so you’re starting with skewed results from the get-go.
NPS® – Net Promoter ScoreSM
The Net Promoter Score uses a single question to determine how loyal a customer is. Rather than asking outright how satisfied they are with the relationship with your business, NPS takes a roundabout approach and asks how likely the customer is to recommend the business/service/product to friends and family. This is based on the idea that a customer who will recommend the said business/product/service is happy with his/her interaction and is more likely to be loyal.
Respondents answer on a 10-point scale and are subsequently split into three categories based on their answers:
• 9 – 10 Promoters
• 7 – 8 Passive
• 0 – 6 Detractors
NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. Scores over 0 are considered to be a good start, while some of the best companies in the world would be pleased with a score above 50.
Unlike CSAT, NPS is considered to be a good predictor of future customer actions. The simplicity of the survey is also considered an advantage because customers are more likely to respond.
Start measuring your NPS today!
The Problem with NPS
Some concerns have been raised over the fact that someone saying they are likely to make a recommendation doesn’t necessarily mean that they have done so or that they will actually do so, thereby diminishing the effectiveness of NPS as a predictor of future actions.
NPS is a good predictor of future performance, but doesn’t dig deep into motivations.
Issues have also been raised that NPS doesn’t dig deep enough, but here we have to disagree. NPS isn’t designed to dig deep. That’s what follow up is for. NPS is a simple tool designed to help you determine customer loyalty quickly. It’s also an effective tool for customer segmentation so you can tailor further research accordingly.
CES – The Customer Effort Score
CES, or the Customer Effort Score, is the new kid on the block and also takes a roundabout approach to measuring customer satisfaction with a simple question. However, the goal is slightly different.
Researchers have discovered that once a customer has had a satisfactory experience with a business, providing them with more impressive experiences does little to increase loyalty. In other words, focusing on already happy customers to make them even happier doesn’t increase loyalty significantly.
Conversely, a customer who has had a poor experience and then has a satisfactory experience will exhibit a significant increase in loyalty, which means that’s where your focus should be. In essence, it’s the law of diminishing returns at work, i.e. more of a good thing won’t result in undying loyalty, but turn a bad thing into a good thing and you will gain the customer’s loyalty.
Studies show that the most effective way of turning a poor experience into a satisfactory one is to minimize the obstacles the customer encounters so he or she has to expend as little effort as possible.
Thus, CES centers around a single statement, namely:
Respondents answer on a 5-point scale that ranges from strongly disagree to strongly agree. The replies are then aggregated and the higher your average, the easier things are for your customers.
The Problem with CES
Like NPS, CES doesn’t dig into why customers are having problems, nor what those problems are. This score is also limited to services since it’s directly tied to effort expended.
CES makes it easy to identify areas that need improvement, but is limited to service areas.
CSAT, NPS or CES?
While each of these measurements have their issues, some are more effective than others in providing actionable insight. CSAT, for example, gives you a quick snapshot of various areas of your business, but it does so at the cost of the overall relationship. NPS offers an overview, but actionable information is not as easy to come by, while CES provides plenty of actionable information but doesn’t look at the why behind the issues customers are having.
In other words, the most effective approach will employ all of these tools because when used in conjunction, they will provide you with a lot of data. However, for truly effective customer engagement strategies, you need to follow up. You need to dig deeper to discover the motivations and the problems customer are having. And then you need to act on that data. Without action you cannot better your Net Promoter Score, i.e. customer loyalty, which should be the ultimate goal.
Using CSAT, NPS and CES together, along with follow up and action is the recipe for success.
IMPROVE CUSTOMER EXPERIENCE NOW!
“Net Promoter, NPS, and the NPS-related emoticons are registered service marks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld“