If you work for an organization that measures customer success or happiness, you’ve likely heard of the customer satisfaction (CSAT) and Net Promoter Score (NPS) metrics. Both can provide valuable insights into how your customers feel about your company and the products and services you offer.
What’s the distinction between CSAT and NPS? We’ve got the answer to that question and more below. Keep reading to get the full rundown on CSAT vs NPS so you can measure your performance more effectively.
Insights on the CSAT vs NPS debate
What exactly are the CSAT and NPS metrics?
Both CSAT and NPS gauge customer happiness with regard to your business, but each metric has a different focus:
- CSAT measures a customer’s satisfaction with your company’s products and services. You would typically employ CSAT surveys (whether formal or informal) at the end of a key customer interaction — such as a purchase or a call with a customer service agent.
- NPS measures customer experience, customer loyalty, and overall perception of your brand; it also predicts business growth.
“NPS is future-looking because it helps predict customer retention and referrals,” says Teo Vanyo, CEO of Stealth Agents. “CSAT is more about measuring the past — how satisfied, for instance, customers were after certain changes you made in your service offering. However, this satisfaction is not necessarily a predictor of loyalty.”
Vanyo explains that a customer might not be happy with one of your services after you change it, but that doesn’t mean they’ll stop being a customer altogether. The same logic applies in reverse — you may provide one service that impresses a customer, but they still may not like your company. “That’s why NPS is a more effective tool for identifying overall customer value and how likely customers will impact future business.”
How do you calculate CSAT vs NPS?
You can calculate both CSAT and NPS through customer surveys, but you have to ask slightly different questions to get accurate results for each metric.
To measure CSAT, ask a question similar to this one:
On a scale from 1 to 10, how would you rate your overall satisfaction with the [product/service] you purchased?
You can then use the CSAT formula to calculate the score:
CSAT Score (%) = (Sum of all ratings / Sum of maximum possible ratings) x 100
For example, if you sent a survey to 10 customers, the sum of maximum possible ratings would be 100. So let’s say the sum of all ratings from your customer responses was 80. Using the above formula, your CSAT score would be 80 percent.
To measure NPS, ask a different type of question:
On a scale from 1 to 10, how likely are you to recommend [the brand] to a friend or colleague?
NPS identifies three different respondents:
- Promoters are those who give a rating of 9 to 10, are the most loyal, will likely refer others, and will positively contribute to growth.
- Passives are those who give a rating of 7 to 8, are lukewarm but still satisfied, and may find offers from competitors worth considering.
- Detractors are those who give a rating between 0 and 6, aren’t happy, and may negatively impact your growth with their reviews.
To calculate NPS, use this formula:
Percentage of promoters (which could range from -100 to 100) – percentage of detractors
Need a tool that can help you measure both CSAT and NPS? Try Jotform, an easy-to-use form builder. You can easily create customized surveys to ask questions that make sense for your business, and then you’ll have the information you need to calculate these key metrics.
How do you use CSAT and NPS in practice?
Ritu Maheshwari is the vice president of product management at AVOXI. Her customer service and product teams use CSAT and NPS insights to evaluate the success customers have with their products and determine where the company might need to make improvements to retain customers over the long term.
“CSAT and NPS are both important metrics for our team, and they can be directly linked to customer retention and revenue growth,” Maheshwari explains. “The scores we receive empower us to shift focus where needed, so we can enhance our current offerings and launch new features to bring more value to our customers’ businesses.”
Maheshwari looks at CSAT to measure the happiness level of their customers. For example, after releasing a new feature, her team follows up with customers to see the impact the feature has had. “We aim for a CSAT score of 85 percent or higher. Anything lower, and we investigate further to determine whether there are any issues with the feature.”
As for NPS, Maheshwari takes a slightly different perspective from the norm. Instead of inquiring about the business, her team asks this question: How likely are you to hire the representative with whom you interacted?
“The answer to this question lets us know how impactful each team member is to customer loyalty. Our goal is for all respondents to rate 9 or higher,” Maheshwari says. As you can see, the CSAT vs NPS debate isn’t so much a battle over which is better — it’s more of a discussion about two metrics that provide important (and slightly different) perspectives about customer happiness. Use both to gain a full view of your customers — and make your work easier with JotForm. Get started today with one of over 400 prebuilt survey templates.
Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Net Promoter ScoreSM and Net Promoter SystemSM are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld.