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Evaluating the customer experience using NPS and CSAT

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As the old management adage goes, “You can’t manage what you don’t measure.” This saying still holds true for today’s organizations, particularly those who seek to improve their services. That’s why it’s important for every brand to gather customer feedback and analyze them. Doing so would let you gain a clear view of what your market thinks about your products and services.

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Customers’ insights and opinions can guide your decision making process. They can help you devise a product roadmap, allowing you to increase customer retention. By collecting people’s feedback, you can also identify product advocates, measure buyers’ happiness, and seek ways to improve the customer experience.

After collecting feedback from customers (usually through surveys), most companies apply quantitative methods to make sense of the data they’ve pooled. Through metrics like net promoter score (NPS) and customer satisfaction score (CSAT), they can accurately gauge how people feel about a product, service, or the entire brand.

 

What is NPS?

male customer support agent speaking to a customer

This metric is used to calculate the likelihood that a person will return to your brand, which helps in predicting people’s future buying patterns and long-term happiness. In short, it’s an indicator of customer loyalty. Through this metric, you can also assess the likelihood that a customer will recommend your brand to an acquaintance. As a whole, therefore, it’s directly correlated to brands’ revenue growth.

To create an NPS survey, use questions answerable on a 0–10 scale.

Here’s an example:

“On a scale of 0–10, how likely are you to recommend [brand/product/service] to family, friends, or colleagues?”

Respondents are then categorized as follows:

•     Those who gave scores of 9 to 10 are called promoters. They’re the ones who will continue to buy from you and refer your products and services to others.
•     Those who gave scores of 7 to 8 are called passives. These customers may have a tendency to switch to your competitors.
•     Those who gave scores of 0 to 6 are called detractors. These respondents may be dissatisfied with your products. They may discourage their friends from buying from you.

To calculate NPS, use this formula:

NPS = (% of promoters) – (% of detractors)
 

What is CSAT?

female call center agent with customer service team

CSAT score, on the other hand, measures a customer’s short-term happiness. It’s commonly used after a customer service transaction to evaluate whether a brand was able to meet the caller’s expectations. For your CSAT survey, ask respondents how satisfied they are with a product or with their previous interaction with the company. These questions are answerable on a 1–5 scale.

Here’s an example:

“How would you rate your most recent customer support transaction?”

Customers can opt to respond with very satisfied, somewhat satisfied, neither satisfied nor dissatisfied, somewhat dissatisfied, or very dissatisfied.

To calculate CSAT, use this formula:

CSAT = (number of happy customers) / (number of customers surveyed)
 

Collecting customer feedback and evaluating it using quantitative methods can help you improve your products and customer service. The NPS and CSAT metrics can both be used to understand and measure the customer experience and thus reduce buyer churn. Afterwards, the next step is to develop new strategies to increase people’s satisfaction with your brand.

 

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