The long-debated question regarding customer satisfaction comes down to CSAT vs. NPS. CSAT stands for customer satisfaction score, while NPS stands for net promoter score.
Both metrics have their own strengths and weaknesses. To determine the customer success metric relevant to your business, you need to look at how each aligns with your objectives.
NPS might be the best choice if you want to improve the customer experience and increase customer loyalty. But CSAT is more relevant if you’d like to measure the effectiveness of a specific customer interaction’s effectiveness. One metric should not exclude the other.
CSAT and NPS are very effective when used together. For example, our support team has built an automated workflow to measure overall customer satisfaction with NPS surveys. They also use CSAT to evaluate specific interactions (e.g., after they close a support ticket, evaluate a new product feature, etc.).
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Both CSAT and NPS are indexes that measure customer satisfaction, but they have different formulas and interpretations.
CSAT measures customer satisfaction by asking clients to rate their satisfaction level on various scales. It provides an immediate snapshot of customer sentiment and doesn’t include predictions or evolutionary trends.
NPS measures customer loyalty by assessing how likely clients are to recommend a product or service to a friend or colleague on a certain scale (usually ranging from 0 to 10). It’s a forward-looking metric that measures how likely your customers are to engage with your brand in the future.
Summing up, CSAT is a measure of how satisfied customers are with their experience with your product, while NPS is a measure of how likely they are to recommend your company’s products or services to people they know.
Now, let’s break down each metric individually to see how each contributes to understanding customer satisfaction and loyalty.
The best way to provide continuous customer satisfaction is to monitor your customers’ needs and expectations. Let’s examine how CSAT helps you achieve that and how you can correctly assess it.
CSAT determines how satisfied customers are with your company’s products or services. You can use it to identify areas for improvement.
It has different variations, as per below.
You can find your CSAT value by surveying customers and asking them to rate their level of satisfaction on a scale from 1 to 10. Other types of scales include a 1-5 ranking or even open-ended questions to measure client satisfaction levels.
You can also measure CSAT on a two-level rating scale. This scale offers customers the option to choose between “satisfied” and “not satisfied.”
Albeit less informative, the two-level rating scale gives you a basic understanding of customer satisfaction, and it can be followed up by an open-ended question. Two-level rating scales are excellent for gathering clear answers about very specific aspects of the customer experience.
To calculate your company’s CSAT, you need to divide the number of satisfied customers by the total number of responses you received and multiply the result by 100.
Another way to calculate your CSAT is to express the number of satisfied customers as a percentage. For example, if a company surveyed 100 customers and 80 of them responded with a score of 8 or higher, the company’s CSAT rating is 80%.
📊 To accurately measure changes in customer satisfaction, decide on a consistent method for calculating your CSAT over time. You can keep up with trends more easily by using a CSAT calculator online.
As you’ve probably guessed, CSAT scores reflect the share of satisfied customers out of the total. Although “good” CSAT scores may differ across sectors, higher percentages are generally a positive sign.
A recent report shows how the average customer satisfaction scores vary by industry:
Image source: retently.com
There are several ways you can use your company’s CSAT to improve your bottom line.
Here are the most effective ways to improve your CSAT.
Like any metric, CSAT is not infallible. Here are the main pros and cons of using it to assess customer satisfaction levels.
PROS
CONS
NPS offers actionable insights into how to build the best possible customer experience. Let’s see how you can use it to grow your business.
NPS predicts business growth and measures customers’ willingness to recommend your company’s products or services to others.
It is based on single-question surveys that ask customers to rate their likelihood of recommending your company on a scale of 0 to 10, with 10 being the most likely.
You can easily calculate your company’s NPS by subtracting the percentage of Detractors from the percentage of Promoters. A positive NPS indicates that more customers are Promoters than Detractors, while a negative NPS indicates the opposite.
🎭 Our NPS calculator provides an easy way to track customer sentiment using your latest feedback numbers.
A good NPS score shows that your customers are happy with your company’s products or services. Generally, any score above 0 means you have more promoters than detractors, which is a positive sign.
In 2024, business-to-business (B2B) industries have shown diverse average NPS scores:
Make better business decisions and boost your return on investment (ROI) by following these steps.
There are multiple ways to improve your company’s NPS.
🤝 At TextMagic, we focus on staying in touch with clients on every channel. You can, too, by using integrations to receive prompt notifications for client follow-ups (including on Slack).
These are the main advantages and disadvantages of using NPS to assess and improve customer satisfaction levels.
In the end, it’s not really a matter of CSAT vs. NPS, but a matter of CSAT and NPS working together. If you’re looking to find out which product features are of interest to your clients and where to invest more cash flow for R&D, CSAT is the metric to check out. If you want to get an overview of your business as a whole, NPS is better.
Another difference between the two is their versatility. NPS is usually limited to single-question surveys, while CSAT includes different types of questions.
You can include a limited number of open-ended questions in an NPS survey, but this can be more time-consuming and may lead to lower response rates. It will, however, offer valuable insights into customer satisfaction and areas for improvement.
Either way, both metrics will offer relevant insight into customer satisfaction levels and how you can improve on them. Ideally, you should look into both (and consider other customer success metrics as well) to grow your business sustainably.
Iustina is a curious copywriter with an analytical mind and a demonstrated history in the advertising industry. She likes mixing words with data and is passionate about human behavior. When she's not at her work desk, you'll probably find her enjoying refreshing tea flavors, spilling stories on paper, or binge-watching true-crime documentaries.
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