BlogCustomer Satisfaction

NPS vs. CSAT: Which Customer Feedback Metric Offers the Most Insights?

Luca MicheliMar 17, 2023
NPS vs. CSAT: Which Customer Feedback Metric Offers the Most Insights?
Contents

Net Promoter Score (NPS) and Customer Satisfaction (CSAT) are popular metrics for measuring customer happiness and loyalty. While both provide valuable information, they evaluate different aspects of the customer experience. 

As a SaaS business owner, you may struggle with choosing the right feedback metric, using the insights to increase customer satisfaction and driving product adoption, growth and innovation.

You can use Customerly, our customer satisfaction tool, to create and distribute NPS and CSAT surveys and simplify collecting and analyzing customer feedback. 

We provide you with automated tools you can use to improve your customer experience, engagement and overall business performance. 

You can customize our survey templates, send CSAT and NPS surveys via email or in-app messaging and follow up based on customer responses. All without any manual effort.

Customerly also provides real-time data analysis and reporting. You can view your survey results in easy-to-read charts and graphs, allowing you to quickly identify areas where you can improve customer satisfaction and loyalty.

If you need more information on NPS and customer satisfaction surveys, you’re at the right place. 

In this article, we’ll explore the differences between NPS vs. CSAT, explain how to use Customerly for customer satisfaction measurement and discuss how to improve your product based on customer feedback.

Let’s start with some essential information.

Measuring customer loyalty with NPS

measuring customer loyalty with NPS

Net Promoter Score (NPS) measures customer loyalty towards your brand. 

It is based on the concept that customers willing to recommend your company to their friends and colleagues will remain your loyal customers in the future. 

You can measure the NPS by asking customers a single question: 

“How likely are you to recommend our product/service to a friend or colleague?” 

The customers can then rate their experience on a scale of 0 to 10, with 0 being unlikely to recommend and 10 being very likely to recommend your SaaS business.

How to calculate the NPS score?

To calculate the NPS score, you first need to categorize your respondents into three groups based on their feedback:

  • Promoters with a score of 9 or 10
  • Passives with a score of 7 or 8
  • Detractors with a score of 0 to 6

You can calculate the NPS score by subtracting the percentage of NPS detractors from the percentage of promoters. 

The result can range from -100 to 100, with a higher score indicating greater brand loyalty.

Measuring customer satisfaction (CSAT)

Customer Satisfaction Scores (CSAT) help you calculate user satisfaction with a specific experience, such as the customer onboarding process, product purchase or customer service interactions.

You can measure the CSAT by asking customers questions such as: 

“How satisfied are you with your recent purchase?” 

They can rate their experience on a scale of 1-5 or 1-7, where 1 means they’re unsatisfied and 5 or 7 means they’re delighted with their interaction with your business.

How to calculate the Customer Satisfaction Score?

To calculate the CSAT score, you have to sum up the total score and divide it by the total number of respondents. It will give you the average score. The higher it is, the more satisfied your customers are.

NPS vs. CSAT: The key differences

NPS vs CSAT differences

Let’s explain the critical differences between NPS and CSAT to help you understand how they relate to your customer experience.

  1. NPS is a relationship metric, while CSAT is a transactional metric.
  2. NPS provides a single score reflecting the customer’s loyalty to your company. CSAT scores individual experiences.
  3. NPS helps you measure customer loyalty over time. In contrast, CSAT measures satisfaction with specific touchpoints in the customer journey.
  4. NPS helps you benchmark your company with competitors or industry standards. CSAT identifies specific issues and provides actionable data to take targeted actions and improve customer satisfaction.

NPS and CSAT provide different types of insights, and the choice between the two depends on your specific goals.

NPS vs. CSAT: The essential benefits

Now that we’ve discussed the key differences between CSAT vs NPS, let’s look at the essential benefits of these customer satisfaction metrics.

NPS benefits

Net Promoter Score (NPS) allows you to identify areas for improvement and growth by tracking changes in customer sentiment over time. You can:

  • Improve customer retention: NPS helps you identify customer churn, enabling you to retain unhappy customers.
  • Get ideas for product development: NPS helps you understand customer needs, providing valuable insights for product development and innovation.
  • Find brand advocates: You can identify your most loyal customers, who are likelier to become brand advocates and promote your business to others.
  • Benchmark against competitors: You can compare customer satisfaction levels with competitors, getting insights into areas where you need to improve your offer.
  • Facilitate customer feedback: NPS surveys provide a channel for customers to give feedback on their experiences, enabling you to improve your products and services continuously.

Overall, NPS is a powerful tool that can help you increase customer loyalty in many ways.

CSAT benefits

CSAT is a valuable tool for measuring customer satisfaction and identifying specific issues your customers may have encountered. You can:

  • Foster a culture of customer-centricity: By making CSAT a key performance indicator and involving all employees to improve it, you can create a company-wide focus on delivering exceptional customer experiences.
  • Identify trends and patterns: You can identify common pain points, recurring issues, or areas where customers are delighted. It can inform product development and marketing messaging.
  • Enhance customer support: You can evaluate your current situation and find ways to optimize your customer support team to facilitate customer interaction and solve all complaints faster.
  • Increase revenue: Higher CSAT scores can increase your revenue through improved customer retention, word-of-mouth referrals, and potential upsell opportunities.

Your satisfied customers are more likely to renew their subscriptions, leading to a more stable and predictable revenue stream.

NPS vs. CSAT: The critical limitations

NPS and CSAT have limitations you should be aware of while evaluating these metrics to understand how your customers feel. Let’s explore the most important ones.

Limitations of NPS

NPS doesn’t account for external factors that can impact the score, such as changes in the competitive landscape, market trends, or a customer’s emotional state. 

NPS can also be misleading if customers who score high are not loyal to your brand or vice versa.

Additionally, NPS is a relationship metric and doesn’t provide context for the score. Therefore, you should supplement NPS with a customer satisfaction metric, such as Customer Effort Score, to better understand customer sentiment.

Limitations of CSAT

While CSAT is a helpful metric, it measures customers’ specific experience or interaction with your brand and doesn’t provide a comprehensive view of their overall sentiment

How you phrase the question can influence the CSAT score, leading to differing results

Lastly, CSAT measures customer satisfaction with a particular experience but doesn’t indicate loyalty toward your brand. You should use CSAT alongside NPS to gain a broader view of your customer experience.

NPS vs. CSAT: Pros and Cons

NPS and CSAT have advantages and disadvantages, and it’s essential to understand them before choosing one over the other. Let’s discuss the most important pros and cons.

NPS pros

  • NPS surveys are concise and easy to administer and complete.
  • NPS is a straightforward metric you can easily communicate across your organization, making it a helpful tool for aligning teams around a shared objective.
  • NPS score helps you segment customers by loyalty level, encouraging targeted marketing and retention efforts.
  • NPS can help forecast future revenue growth and provide insights into the health of your business.

NPS cons

  • NPS surveys focus on a single question and may not capture the entire customer experience or feedback nuances.
  • Sampling bias can influence NPS scores if the survey sample does not represent the entire customer base.
  • NPS may not be suitable for all industries, particularly those where customers are less likely to recommend a business, such as healthcare.
  • NPS does not provide context for why customers are likely or unlikely to recommend a business, making it challenging to prioritize improvement efforts.
  • External factors beyond your control, such as economic changes or industry trends, can impact the results.

CSAT pros

  1. You can prioritize improvement efforts and allocate resources to address the most critical issues by identifying areas with low satisfaction scores.
  2. You can use CSAT surveys at different touchpoints along the customer journey to understand customer sentiment at each stage.
  3. CSAT helps you evaluate different product or service offerings and identify which resonates most with customers.
  4. You can use CSAT to assess the performance of employees interacting with customers and provide feedback for coaching and training opportunities to improve customer service skills.

CSAT cons

  1. CSAT surveys can be influenced by subjective factors such as moods, expectations, and biases, affecting the accuracy of customers’ responses.
  2. Low response rates and limited samples can hinder the ability to draw meaningful conclusions from CSAT survey data.
  3. Broad or generic data collected from CSAT surveys may not provide actionable insights for specific improvements.
  4. CSAT surveys may miss feedback from non-participating customers, limiting the survey’s effectiveness.
  5. CSAT surveys may not differentiate between satisfied and loyal customers, with some users continuing to use the product despite low satisfaction levels.

Since we covered all essentials about NPS vs CSAT, let’s answer the critical question.

NPS vs. CSAT: Which is better?

The choice between NPS and CSAT depends on your individual needs. 

Both metrics can provide valuable insights into customer satisfaction levels and help drive business success, but you should carefully consider which metric aligns best with your objectives.

NPS and CSAT can be challenging to implement effectively. They rely on accurate and timely data collection and analysis, which can be time-consuming and resource-intensive. 

Fortunately, customer experience analytics tools that rely on automation have made this process more convenient.

Customerly is one such solution you can use to gain more accurate and actionable insights into customer loyalty and satisfaction levels.

Let’s explain how Customerly benefits your SaaS business.

How to use Customerly for NPS and CSAT

customer satisfaction surveys

Customerly is one of the best SaaS tools that helps you measure customer satisfaction and loyalty. Let’s explain how Customerly boosts your customer experience.

NPS email surveys

NPS email surveys

Customerly helps you streamline NPS survey creation and distribution, improve email open rate and identify potential brand advocates. 

You can use our pre-made NPS survey template to collect and analyze valuable customer feedback. You can choose the timing and distribution frequency, and track the results in real-time.

NPS survey timing and frequency

You can accelerate and simplify the process by setting up personalized rules to automatically send NPS surveys to customers’ inboxes or trigger them by specific web sessions or customized events such as user subscriptions. 

You can efficiently manage and categorize customer feedback by happiness level or evaluate feedback with text to understand customer sentiment. 

Customerly reports

You can filter customer feedback by specific date range and generate reports you can download or send to your inbox.

To learn more about NPS surveys, we recommend you read the following guides:

CSAT surveys

Customerly CSAT survey editor

Customerly allows you to strategically create and distribute CSAT surveys throughout the customer journey to gather valuable feedback and enhance your product.

You can easily customize our CSAT survey template to match your brand and use either scale questions to gauge satisfaction levels or open-ended questions to capture qualitative feedback.

You can send a survey immediately after a customer interacts with your business, whether after purchase or contact with your support team, to ensure the feedback you gather is accurate, reliable, and honest since the experience is still fresh in customers’ minds.

You can also follow up with customers who didn’t respond to increase response rates.

Customerly analytics and reporting

You can eliminate manual effort and human errors with our automated customer satisfaction scoring system. Analyzing patterns and trends in customer feedback will help you make data-driven decisions to improve your SaaS business.

To learn more, we recommend you read the following guides:

As you can see, Customerly is a powerful tool that helps you gather valuable feedback and automate your operations.

It has a user-friendly interface, customizable templates, and real-time tracking and reporting features, making it an excellent choice for enhancing customer satisfaction, identifying brand advocates and optimizing the customer experience. 

Tips to help you improve NPS and CSAT

NPS vs CSAT tips

Measuring customer satisfaction and loyalty is crucial for the success of any business. However, simply collecting data is not enough. 

To truly improve your results, you need to take action on the feedback you receive. Here are five tips to help you improve your customer experience.

  • Collect feedback across multiple touchpoints in the customer journey, such as pre-purchase, purchase, and post-purchase experience, to identify areas where you’re doing well or need improvement.
  • By segmenting customers based on demographics, purchase history, and behavior, you can identify common themes in their feedback. It can help you prioritize areas for further optimization.
  • By analyzing feedback on existing products, you can identify customer demands for new features. It can help you develop products that better meet your customers’ needs.
  • Prioritize and act on feedback from your most loyal and valuable customers who have been with you for a long time and have a strong emotional connection to your brand. They are the ones who are likely to refer new customers to your business and leave positive online reviews about your products or services.
  • Set up a feedback loop to update customers on your actions or to seek further clarification or input. You can use email, social media, or even in-app notifications for this purpose, depending on the channels your customers use the most.

Don’t just collect data, act on it! Use these five tips to take your customer feedback to the next level and drive the success of your business.

NPS vs. CSAT: Wrapping up

NPS and CSAT are valuable tools for measuring customer satisfaction and loyalty. 

NPS provides a simple way to assess overall loyalty, while CSAT offers a more detailed look at specific experiences. Both methods have their strengths and limitations, and the choice between them will depend on your specific business needs.

When using NPS or CSAT, it’s important to remember the best practices for survey design and analysis. By collecting feedback across multiple touchpoints, segmenting customer data, prioritizing feedback from loyal customers, and setting up a feedback loop, you can improve your results and use the insights to make informed decisions for your business.

Customerly enables you to gather data, take action on feedback, make improvements to delight your customers, and ultimately increase customer satisfaction and loyalty. 

Luca Micheli

Luca Micheli

CEO @ Customerly

Luca Micheli is a serial tech entrepreneur with one exited company and a passion for bootstrap digital projects. He's passionate about helping companies to succeed with marketing and business development tips.

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