Both have their pros and cons and measure different aspects of the customer experience , so which one should your business use?
This blog will tell you when to use one or the other and who wins the battle between NPS and CSAT.
1. What is NPS
The Net Promoter Score (NPS) is a customer loyalty metric created by Fred Reichheld , a partner at Bain & Company and author of The Ultimate Question: Driving Good Profits and True Growth .
NPS is calculated by asking customers the following question:
“On a scale of 0 to 10, how likely are you to recommend our kenya phone number list company to a friend or colleague?”
Customers who respond with a 9 or 10 are considered promoters , customers who respond with a 7 or 8 are considered passive , and customers who respond with a 0 to 6 are considered detractors . NPS is then calculated by subtracting the percentage of detractors from the percentage of promoters .
net promoter score formula
For example, if you have a total of 100 customers and 30 are promoters, 20 are passives and 50 are detractors, your NPS would be:
Percentage of promoters = 30/100 = 30%
Percentage of detractors = 50/100 = 50%
Net Promoter Score (NPS) = % promoters – % detractors
Net Promoter Score (NPS) = 30% – 50%
Net promoter Score (NPS) = -20%
Pros and cons of NPS
pros and cons of net promoter score
There are some advantages and disadvantages to using the NPS metric:
Pros
NPS surveys are easy to understand and quick to calculate.
NPS scores can be tracked over time, so you can see if your business is improving or deteriorating in terms of customer loyalty.
NPS score is a good predictor of customer loyalty and revenue growth.
Cons
NPS surveys do not take into account the size of a company. A small company with a high NPS may perform better than a large company with a low NPS.
NPS surveys don't tell you why customers are promoters or detractors.
When to ask the question
The question should be asked towards the end of the customer’s interaction with your company . This could be with a survey, after a purchase, or after using your product or service.
2. Definition of CSAT
definition of CSAT
In the fall of 1995, Earl Sasser and Tom Jones debated the importance of superior customer satisfaction scores.
The Customer Satisfaction Score (CSAT) is a customer experience metric that has been around for many years.
To measure customer satisfaction CSAT, ask customers the following question:
“How satisfied are you with our product/service?”
Customers who respond with a 9 or 10 are considered satisfied , customers who respond with a 7 or 8 are considered neutral , and customers who respond with a 0 to 6 are considered dissatisfied .
CSAT is then calculated by dividing the number of satisfied customers by the total number of respondents .
For example, if you have a total of 100 customers and 60 are satisfied, 20 are neutral and 20 are dissatisfied, your CSAT would be:
Satisfied customers = 60/100 = 60%
Dissatisfied customers = 20/100 = 20%
CSAT = % of satisfied customers/total number of respondents
CSAT = 60%/100 = 60%
Pros and Cons of Customer Satisfaction CSAT
net promoter score vs csat
