With today’s business climate, customers have a great deal of choices. What makes a customer choose your brand? What makes that customer loyal to your business? How can you improve your service to keep your customer? Finding the answers to these questions and creating a strong customer experience is now a prominent business objective and resides in the realm of (….drumroll) Customer Experience Management (CX).
- Customer Satisfaction (CSAT) and
- Net Promotor Score (NPS)
These metrics are part of a multidimensional construct that includes the customer’s emotional, behavioural, cognitive and social responses to a company’s products/services – instead of just focusing on the company’s perspective of customers.
While both these metrics have inherent benefits, the key to either of these being useful, meaningful and effective, is the CX project’s research design. To properly design a CX measurement project, it is essential to clearly understand these two metrics in order to use them to their maximum benefit.
Customer Satisfaction (CSAT)
“Overall, how satisfied are you with (brand name)?” – ever heard that one before? This is a typical way of measuring customer satisfaction which is often a key measure of whether you’re fulfilling and meeting business strategies. Customer satisfaction also provides a company with a strong predictor of customer retention, customer loyalty and product/service repurchase.
Let’s delve a little deeper:
CSAT is one of the most commonly surveyed constructs in CX and is concerned with:
- The attitude customers have regarding a specific company and their products/services.
- Customer’s expectations of what the product/service should be.
The surveys developed to provide a company with an understanding of the above points usually require multiple questions that address satisfaction with different dimensions of the products/services. Therefore, customer satisfaction measurement can include measures for overall customer satisfaction, as well as with specific product and service attributes (cool, right?).
Net Promoter Score (NPS)
“Do unto others what you would have them do unto you” – our parent’s weren’t the only ones that were firm believers of the Golden Rule. NPS developers were big supporters of it too! But without a systematic feedback mechanism, the Golden Rule is self-referential, simplistic and unreliable for decision making.
… and so began the search for a metric that provided the missing link between the Golden Rule, loyalty and sustainable growth. Almost thirty years ago, Bain & Company started investigating this loyalty effect. The NPS question is simply testing whether a company is observing the Golden Rule.
NPS isn’t just another way to measure customer satisfaction. It is a flexible and open source system. It’s also ultimately a business philosophy developed by Bain and Co & Fred Reichheld and is predominantly used to track the loyalty, engagement and enthusiasm of a company’s customers.
It is more useful to benchmark internally against past NPS scores than only relying on benchmarking. Continuously driving positive change in a business and improving change management processes is where the most value lies in NPS.
The zero-to-ten scale best practices:
- Avoid using the happy-face-sad-face colour coding scale. It tends to be manipulative and affects judgement
- Ensure that biases in the research are minimised. It is often necessary to educate employees and customers on the ethics regarding the feedback system in order for them to appropriately reply and manage it
- Make the research process reliable and consistent to accurately compare branches, regions or competitors.
While it is important to understand the above metrics and how they work.
Aiming for a high score at face value is not the point – you end up like the kid who got a gold star just because you threw a tantrum instead of colouring inside the lines. The key to a high score is actually being worthy of one through incredible customer experiences. Poor metrics should inform decision making to deliver improved business outcomes which will make you worthy of not one, but two gold stars.
- Lemon, K. N., & Verhoef, P. C. (2016). Understanding Customer Experience Throughout the Customer Journey. Journal of Marketing: AMA/MSI Special Issue. Vol. 80. 69-96.
- MaritzCX (Comp.). (2016). Customer Experience Maturity Leads to Financial Gain: Insights from the Landmark MaritzCX CXEvolution Study. [Whitepaper].
- Reichheld, F. & Markey, R. (2011). The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World. Harvard Business Review Press.
- Smith, S.M., Passey, J. & Albaum, G. (2010). An Introduction to Marketing Research. Qualtrics.