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13 August 2017 | Customer Loyalty

Best Customer Loyalty Metric: CSAT, NPS, or CES?

Best Customer Loyalty Metric: CSAT, NPS, or CES?

Pin-pointing moments throughout the customer journey and measuring them in order improve Customer Loyalty, has turned into a science, a 'Branding Art' and a daily reality.

The oldest measurement is CSAT (Customer Satisfaction Test) originating from the mid 1970s/ 1980's, followed by the NPS (Net Promoter Score in 2003 and CES (Customer Effort Score) in 2008/ 2010.

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Difference between CSAT, NPS, and CES
Simply put:

  • CSAT measures a general level of satisfaction, with no clear definition as to what “satisfaction” really means.
  • NPS measures the number on your positively tuned promoters (its main focus).
  • CES can only be used in cased where the need for Customer Service is present and you can measure if your issue was resolved effortlessly.

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CSAT, CES and NPS – the comparison
Table1 -CSAT, CES, NPS Comparison ( © 2017 HireLoyalty and © 2017(HIREghana )

CSAT

CES

NPS

Primary posed Question to define the 'Measurement'

How would you rate your experience with using this product / service/ recent purchase or the support that you received lately?

How easy was for you (how effortless) to resolve your issue at hand?

(assumes that you need Customer Service assistance)

On a scale of 0-10 how likely would it be for you to recommend this product or company or service to a friend or colleague?

Basic Idea/ Philosophy

A satisfied Customer will return to buy more

An effortless Customer Service/ Support experience creates Customer Loyalty.

This is all based on CEB data.

A consumer who is strongly willing to recommend your product, s/he is most likely a Loyal Customer.

Also, by monitoring your detractors (people with negative experience) and turning them to either passives or promoters, you turn damage control into extra Customer Loyalty results.

Relevant Measurement Scale

Very unsatisfied / unsatisfied / Neutral / Satisfied / Very satisfied.

It can also be numeric scale (i.e. from 1 to 10)

Strongly disagree/ Disagree/ Somewhat disagree/ Neutral/ Somewhat agree/ Agree/ Strongly agree

It can also be numeric scale (i.e. from 1 to 10).

But is can also be as simple as 'Are you happy with …Yes or No'?

CES has too many variations

Scale from 0-10

Simple, efficient and it does work without any tweaking.

Measurement Interpretation

CSAT score is the sum of respondents that answered somewhat or very satisfied.

The higher the number the higher your customer satisfaction will be.

Simple:

- a high average indicates that your company is making things easy for your customers.
-a low number means that customers are putting in too much effort to interact with your company.

The Net Promoter Score is equal to =

% of promoters -detractors.

I.e. the % of the respondents that gave a 9-10 grade

Minus –

The % of the respondents that gave a 0-6 grade

Usage

Basically, CSAT is universal

It is mainly used to gauge and improve customer service interactions.

It really measures customers' / consumers'

Opinions in all possible contact moments and situations.

Real

Limitations

CSAT is indeed a good measure with clear focus on specific interaction between a client and a company's services and/or products.

Unfortunately -on its own- it cannot offer an image of the actual relationship between the consumer and the company.

If used correctly/ strategically, it can give you an insight to what needs improvement in your services and/or product offerings.

Measurement is limited to the performance and/ or perception of your Customer Service

If the customer has no need or decided not to use your Customer Service, then you have no clue about his/her Loyalty.

Also, it really gives you no clue as to why your customers have any issues with your product or service in the first place or what those issues might be.

Please do not rely solely on CES to measure Customer Loyalty.

There is really no proof your promoters actually will recommend you in real life or that they will come back and buy from you. Most likely yes, but don't take it as given.

Unlike the other 2, NPS does not give you any clue/ hint as to areas in your product or service that might need dire improvement.

Long Term Vision

CSAT is instant measurement… either you are happy or not as a customer/ consumer. It's a short-term customer-happiness measure

NPS focuses on measuring long-term happiness, on customer loyalty.

CES focus on a specific one-time Customer Service Experience.

As you can see, each one of these Customer Loyalty measurements has its own merit, applicability and limitations of course. Please use them as complimentary tools to each other- relying solely on just any one of these, will not give you the complete & correct picture.

For example, NPS will give you a picture of your customer satisfaction on an overall level and the CES will specifically show to you how do you really perform in handling customer issues.

CEB claims that according to published studies (mainly theirs), CES 2.0 should be 1.8 better at predicting customer loyalty than Customer satisfaction (CSAT)and 2 finer than Net Promoter Score (NPS). Having been user of all 3, I will be delighted to challenge this statement.

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In Conclusion.
By now, it should be obvious to you that none of these 3 metrics on its own can give you an accurate picture of your Customer's Loyalty. So, it is an excellent idea / if not a 'must', to combine all these three metrics together.

But, please do keep this in mind that you should not drive your customers crazy with frequent and lengthy questionnaires. Feedback requests, if they are too often they will undoubtedly negatively influence your customers' happiness. Do you want to go to a store where every time you go, they ask over and over again for a new survey?

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Thank you and Good Luck .
Kwaku and Spiros
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About the authors: Both Kwaku Abedi and Spiros Tsaltas are associated with a unique Customer Loyalty Startup : HireLoyalty ( www.HireLoyalty.com ) which is coming out of stealth mode in the next few months.

Spiros is also associated with HIREghana ( www.HIREgh.com ) and as a NED (Non Executive Director), he can be hired via them.

They welcome all your comments/ remarks/ feedback at [email protected]

© 2017 Kweku Abedi & Spiros Tsaltas and © 2017 HireLoyalty

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