https://www.talkdesk.com/ The most successful businesses are data-driven, and measuring your customer happiness is no exception. Here is a breakdown of the two most popular metrics for measuring customer happiness: Net Promoter Score® (NPS) and customer satisfaction score (CSAT). This slideshow will show you the difference between the two and some best practices for measuring both.

1. NPS vs. CSAT
A Guide to Measuring
Customer Happiness

2. The most successful businesses are data-driven. They are the
companies where leadership bases their decisions on preset
metrics that they regularly track. Goals are determined and
adjustments are made with numbers serving as rationale.
All this is great, but how does that play with customer service?
When it comes to the touchy-feely aspects of a business,
where do numbers factor in?

3. Many companies use the Net Promoter Score® (NPS), while
others prefer to measure the CSAT score, or customer
satisfaction score.
Here is a breakdown of the two scores, the difference between
the two and some best practices for measuring both:

4. Net Promoter Score®
(NPS)

5. What is NPS?
Net Promoter Score (NPS) is a commonly used tool for assessing
customer loyalty that was introduced in a 2003 article in the Harvard
Business Review. A company’s NPS, relative to the scores of their
competitors, is a predictor of growth. NPS is ideally an ongoing exercise
in the life of a company rather than a one-time test.
There are two types of NPS: transactional and relationship. Transactional
NPS is taken immediately after an interaction with a company and is used
mostly as an assessment of that particular interaction. Relationship NPS
is taken at regular intervals to assess the overall state of the customer-
company relationship.
Net Promoter Score® (NPS)

6. How is NPS calculated?
NPS is calculated based on two questions:
1. On a scale of 1-10, how likely is it that you would recommend our
company/ product/ service to a friend or colleague?
2. Why?
Respondents answer the first question with a number from 0 to 10, with
0 being extremely unlikely and 10 being extremely likely. Customers are
then given the chance to explain their first choice in an optional second
question that yields qualitative results.
Net Promoter Score® (NPS)

7. NPS scores are divided into three buckets. 0-6 are considered
Detractors: Customers who are unhappy and can damage a brand.
7-8 are Passives: Satisfied but unenthusiastic customers.
9-10 are Promoters: Loyal enthusiasts who will fuel growth.
NPS is calculated by subtracting the percentage difference between
the Promoters and the Detractors. Companies can score anywhere
from -100 to 100.
Net Promoter Score® (NPS)
% Promoters = Net Promoter Score% Detractors-

8. What is a ‘good’ NPS?
NPS scores vary widely based on a number of factors, including industry
and age of the company. Ideally, companies compare their NPS to their
own past scores so that they can track progress. Companies can also
benchmark against competitors’ NPS if that data is available.
Net Promoter Score® (NPS)

9. Customer Satisfaction
Score (CSAT)

10. What is CSAT?
In a general sense, CSAT stands for customer satisfaction. Customer
satisfaction is based upon how happy a customer is about a specific
product, transaction, interaction, etc. with a company. The term “CSAT”
is most often used in the context of a “CSAT score,” which describes a
numerical measure of customer satisfaction.
Customer Satisfaction Score (CSAT)

11. How is CSAT measured?
To measure CSAT, businesses directly ask the applicable customer base
to rate their satisfaction of an event, product or service. This typically
comes in the form of a survey communicated through some channel to
the customer (direct mail, email, phone, etc).
Customer Satisfaction Score (CSAT)

12. The exact wording of the CSAT question and the corresponding rating
system used in surveys varies from organization to organization. This
means that there is no industry-standard way to measure CSAT. A few
commonly used questions include:
• Were you satisfied with ___? (Yes/No)
• On a scale of 1-10, how satisfied are you with ___?
• How would you rate your satisfaction with ___?
• (Unsatisfied, Somewhat Satisfied, Very Satisfied, etc)
Customer Satisfaction Score (CSAT)

13. For CSAT questions that don’t simply require a binary answer, it’s up
your business to decide which answers count as “satisfied” and which do
not. For example, you may decide that, on a scale of 1-10, anything
above a ‘6’ rating counts will be deemed as satisfied.
A CSAT score, then, does not have one unified measurement. The
numerical score itself will depend on exactly what question is being
asked. That being said, one could perform this general calculation to
determine the proportion of satisfied customers:
Customer Satisfaction Score (CSAT)
# of customers who
responded as “satisfied”
= % of satisfied
customers
# of total
customers surveyed
/

14. What is a ‘good’ CSAT score?
Since CSAT scores vary widely based on the type of CSAT question
asked, there is no one definition of what a good CSAT score is. A general
rule of thumb is to try to get your percentage of satisfied customers as
close as possible to 100%. It may also be useful to benchmark your
scores against other companies in your industry.
Depending on what exactly your business is having customers rate their
satisfaction on, your CSAT score may also constantly be in flux. For
example, a customer service team’s CSAT score of interactions with
customers will change in real-time with the conclusion of every new
interaction. Alternately, a company that sends out a quarterly survey to
measure CSAT on a specific product will only have one score until the
next survey is sent out.
Customer Satisfaction Score (CSAT)

15. NPS vs. CSAT
CSAT and NPS both measure customer sentiment, but they do so in
distinct ways. The first major difference between the two is that NPS has
a very defined process and measurement trademarked by specific
organizations, while CSAT is a more general concept. This is apparent in
the guidelines (or lack thereof) for each.
NPS vs. CSAT

16. The second major difference is in what the two values measure. NPS is a
measurement of customer loyalty. In contrast, CSAT scores are strictly a
measurement of customer happiness. This means that while CSAT scores
can help predict churn, they cannot predict customer retention. This is
because low satisfaction generally leads to attrition, while high
satisfaction does not necessarily guarantee that a customer will return
for repeat business.
Although CSAT cannot predict customer loyalty, it can be used to
capture the sentiments of your customers at any given moment. The
measurement also provides more flexibility than NPS, which is limited to
one preset survey question. A business could choose to customize their
CSAT question according to their needs, ultimately allowing them to
identify and explore their strengths and weaknesses.
NPS vs. CSAT

17. How can NPS be used to improve your call center?
There are seven steps to improving the customer experience in your call
center using NPS:
1. Conduct NPS survey
2. Calculate NPS
3. Compare NPS to past scores and/or to competitors’ NPS
4. Thoroughly review written responses to “Why did you choose that number?”
5. Reply to customer responses
6. Identify key sticking points
7. Adjust accordingly
NPS vs. CSAT

18. What are some CSAT best practices?
1. Use targeted survey questions
As you brainstorm potential survey questions, think about the factors that
go into the product, service or interaction. Use these factors to guide the
creation of your question.
2. Be consistent
Ask the exact same CSAT survey question every time and make sure that
the survey is sent out at the correct time, whether it be every quarter or
after every interaction.
3. Consider using other measurements in tandem
The beauty of CSAT is that it plays well with other sentiment measurements
such as NPS or the increasingly popular Customer Effort Score (CES).
NPS vs. CSAT

19. Measuring NPS and CSAT scores can go a long way in determining how your
business is performing in the eyes of your customers. These metrics are
simple, yet adaptable to a variety of circumstances and can be used in
conjunction with other sentiment measurements.
NPS vs. CSAT

20. Once you’ve determined your NPS and CSAT score,
what can you do next?
You’re going to to need Talkdesk’s advanced call center software to measure
and improve upon all the metrics that will have an impact on your scores.
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