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NPS or CSAT? How to Measure Client Satisfaction the Right Way

3 Feb 2016

The client satisfaction conversation usually begins with all the reasons why you need to be measuring it.

For example in our webinar, From Dissatisfied to Evangelist, we talk about why the simple act of asking for feedback can make your clients more loyal and profitable over time.

But after why, the next question is:

How?

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Net Promoter Score vs. Client Satisfaction Scores

The two main ways to measure client satisfaction, Net Promoter Score (NPS) and Client Satisfaction Scores (CSAT), have very vocal opponents and detractors on their respective sides.

That’s because they’re a very different approach to the same question: what do my clients think?

Here’s a quick breakdown of each:

Net Promoter Score: A Relationship Metric

The Net Promoter Score is based on the assumption that happy customers are more likely to recommend a company or service to others.

It measures this by asking one question:

On a scale of 0-10, how likely would you be to recommend [company name] to a friend or colleague?

Responses are then categorized according to the following scale:

  • 9-10 = Promoters
  • 7-8 = Passive
  • 0-6 = Detractors

The Net Promoter Score metric itself is calculated by subtracting the percentage of detractors from the percentage of promoters. Average scores vary wildly by industry, but it’s safe to say that 40 or above is awesome.

3 reasons people use NPS:

  1. It asks just one simple question
  2. It’s a standardized metric (good benchmarks)
  3. It provides insight into the client-company relationship

CSAT: A Transactional Snapshot

Customer satisfaction scores are captured in relation to a specific transaction, experience, or product.

For example, in some airports there’s a kiosk near the baggage claim that asks:

How happy were you with the speed of baggage delivery today?

The answer scale is sometimes a numeric range, but more and more often you'll see a selection of emoticon faces ranging from very happy to very sad.

Some CSAT systems offer a standard metric, like the Net CSAT Score, but in other cases a higher percentage of positive responses over negative responses insinuates a higher rate of satisfaction.

3 reasons people use CSAT:

  1. It offers versatile question/measurement options
  2. It provides actionable feedback
  3. It is focused on a specific transaction

Of course, the million dollar question is: which one should you be using?

The answer might surprise you.

Relationship Measurements vs. Transactional Measurements

First, let's take a look at the difference between a relationship measurement and a transactional measurement.

A relationship measurement:

analyzes the client-company relationship on a larger scale. It gauges how clients, or customers, feel about a company, or brand, overall. It has an emotional aspect to it, and is often thought to be a measure of loyalty as well.

A transactional measurement:

is more relative, and takes place within a focused frame of reference. It often refers to a specific service, experience, or product. Because it drills down into a transaction, transactional data often provides more actionable insights.

So NPS measures satisfaction on a relationship level, and CSAT measures satisfaction on a transactional level.

But what does that mean, exactly?

It means NPS and CSAT actually measure different things.

NPS + CSAT = A Complete Picture of Your Service Delivery

Now, finally, the answer to, “Which client satisfaction measurement system should you be using?”

Drum roll please...

Both of them!

NPS and CSAT aren’t opponents. They measure different things, and the data they provide is complementary, not conflicting.

Measuring client satisfaction on a relationship and transactional level gives you more insights about your clients overall.

moo-customer-survey Customer survey from Moo.com using NPS and CSAT.

 

Of course, your next question is probably, "When do I use CSAT, and when do I use NPS?"

Don’t worry--we’ll be answering that one, right here, in the following weeks.

Do you agree or disagree? Join the NPS or CSAT? conversation on LinkedIn.

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