Before we jump into which metric is the best, it is important that you understand what they both stand for. NPS stands for Net Promoter Score, whereas CSAT stands for Customer Satisfaction.
Both of these metrics are used for customer service to understand how satisfied your customers are with your services. Throughout this blog, we will explore the differences between NPS and CSAT, which metric is best and much more.
NPS (Net Promoter Score)
NPS is a metric that is used in customer experience to measure the loyalty of customers to your business.
This is done through a single question, such as ‘How likely are you to recommend our product/ service to a friend or colleague?’.
From this, the responses are scored on a scale of 0-10. Here is an example of how a NPS survey looks:
Once customers have responded, they are categorised into the following three groups:
- Promoters: ( 9-10): These are loyal customers who will keep buying from you and referring you to others.
- Passives (7-8): These customers are usually satisfied with your business but can be easily swayed by competitors.
- Detractors (0-6): These are unhappy customers who could negatively affect your business through word of mouth if issues aren’t resolved.
NPS can be calculated by subtracting the percentage of detractors from the percentage of promoters.
For example, if 20% of your respondents are detractors, 10% are passives and 70% are promoters, then this would mean that your NPS score would be 50 (70% - 20%).
What Are the Advantages of NPS?
There are many benefits of using an NPS survey for customer service. For example, an NPS survey is straightforward and easy to understand, which means that customers will be more inclined to complete the survey.
If a survey is too complex, then you may find that customers will be put off completing it due to it being too time-consuming.
NPS is also used across different industries, which makes it easier to compare your performance with other competitors.
The only drawback to NPS is that it doesn’t always provide specific reasons behind the score, which means that you may not understand why people are unsatisfied with your services.
However, this can be easily resolved by adding a follow-up question along the lines of: ‘What was the reason behind your score and what can we do to improve?’.
CSAT (Customer Satisfaction Score)
CSAT is a different type of metric that is used to measure customer satisfaction. This survey is used to track how satisfied your customers are with your products and services. It is measured through one or more questions that usually come up at the end of a customer feedback survey.
This question could be something along the lines of: ‘How satisfied are you with our product/ services?’
You calculate CSAT by taking the number of satisfied customers (the ones who scored a 4 or 5 on a 5-point scale) and then you divide that number by the total number of respondents.
Once you have done this you want to multiply that result by 100 to get your percentage.
What Are the Benefits of Using a CSAT?
There are many advantages to using a CSAT survey to measure customer satisfaction. For example, a CSAT survey provides you with immediate feedback and actionable insights into different aspects of customer satisfaction.
These surveys can be flexible and tailored to different touchpoints and interactions with your customers' journeys.
CSAT allows businesses to pinpoint specific areas of their business that need improvement (this could be products or services).
Finally, CSAT scores can be easily shared across different departments within an organisation, such as customer service, product development or marketing.
This is ideal as it ensures that customer satisfaction is a shared goal, which in turn enhances overall business performance, customer satisfaction and loyalty.
What Are the Main Differences Between NPS and CSAT?
Although NPS and CSAT are both used for customer service, there are some differences that set them apart. For example, the scoring range for an NPS survey is from 0-10, whereas the scoring range for CSAT is from 1-5 or 1-10.
Moreover, NPS surveys are split into three categories:
- Promoters
- Passives
- Detractors
Whereas CSAT is split into two:
- Satisfied
- Unsatisfied
NPS indicates loyalty but not specific issues whereas CSAT provides you with specific feedback on how satisfied your customers are with your services.
NPS is used to focus on customer loyalty and their likelihood to recommend, however, CSAT focuses on immediate satisfaction with a product or service.
Finally, NPS is easier to benchmark across industries, whereas CSAT can be more complex.
So, Which Metric is Best for Your Business?
The metric that is best for you completely depends on your business goals and objectives. For example, if your goal is to measure overall customer loyalty, benchmark against competition and predict long-term growth, then NPS is best for you.
However, if you would like more detailed feedback on specific interactions or aspects of your products or services, then CSAT may be the solution for you. This survey is beneficial for operational improvements and gaining immediate insights into customer satisfaction.
NPS is useful for high-level strategic insights, whereas CSAT is ideal for operational improvements and gaining immediate insights into customer satisfaction.
Overall, the choice between the two metrics should align with your business objectives, the type of insights you are looking to gather and the customer's journey.
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