NPS Vs Ratings – Which Is a Better Indicator of Customer Satisfaction

NPS Vs Ratings – Which Is a Better Indicator of Customer Satisfaction

You have a business, and you want to gauge your customer satisfaction. Have you ever wondered about the best ways to do this?

Everyday businesses across the world lose current and potential customers due to customer satisfaction.

What’s more, in one study, 80% of respondents said they’d stopped doing business with a company because of a poor customer experience.

Because customer satisfaction is so important, in this article, we look at NPS vs ratings and which is a better indicator of customer satisfaction.

First let’s look at some more reasons why measuring customer satisfaction is so important.

Why Measure Customer Satisfaction?

There is competition everywhere. And, in today’s economy, that competition isn’t just from your direct competitors. It’s from anyone who can take the sale away from you.

More and more people want to do business with companies that treat them well. If you have unsatisfied customers, not only are you going to lose them, but you’re going to lose everyone they talk to.

Customer satisfaction is vital to your success. And because of this, you must measure it. This is how you identify what your customer needs and wants, verify your decisions, take action, make corrections, and instill customer loyalty.

The (NPS) Net Promoter Score

Your NPS score is a direct measurement of customer loyalty that indicates how satisfied your customers are with your business.

This score allows you to learn how likely your customers are to talk positively about you as they go about their daily lives. Will they recommend your brand to a friend, family member, or colleague?

This score lets you know the answer to that question.

In this survey, you ask respondents the question, “How likely are you to recommend our company to others?”

The NPS survey scores respondents on a scale of 0-10 (0 is not likely at all to recommend you, and 10 is highly likely to recommend you). It helps you find your detractors (completely unsatisfied customers), your passives (they don’t much care either way), or your promoters (your powerful brand ambassadors).

Customer loyalty and brand devotion are great indicators of customers satisfaction.

Customer Satisfaction Score (CSAT)

The Customer Satisfaction Rating (or Score) measures on average how satisfied or unsatisfied your customers are with your product, event, service, feature, interaction, services, or customer service.

In this survey, respondents are usually asked to respond on a scale of 1-3, 1-5, or 1-7. The higher number indicates a high level of satisfaction, while the 1 is very dissatisfied. The question looks like this: “How would you rate your experience with X?”

You calculate this score by adding the sum of all the scores and dividing the sum by the number of your respondents.

This score is a very commonly used way to measure customer satisfaction. This linear scale tells you very quickly how satisfied your customers are.

This metric is best used right after a transaction because it’s a transactional measurement. For example, you might send this survey right after a customer deals with your customer service department, right after they made a purchase, or right after they received their product.

With this score, you can easily see how satisfied customers are with one particular experience.

Comparing NPS to Ratings

While the NPS shows you how likely a customer is to recommend you, the CSAT rating shows you how happy customers are with a particular experience.

The CSAT rating can help you pinpoint pain points for your business. This shows you areas where you can improve. It may not be the best tool to measure overall sentiment.

In addition, you can often follow up your CSAT surveys with open-ended questions to learn more about specific interactions and why they responded the way they did.

The NPS score helps you better see how satisfied your customers are overall. It’s a fully accurate measure of customer sentiment.

Which Survey Should You Use?

The short answer is use them both. The longer answer is, it’s up to you.

The CSAT is a great tool to assess individual interactions with your business. It can also tell you how well a product is performing.

The NPS is the better tool for measuring overall customer sentiment year after year or quarter after quarter.

When to Use the NPS Survey

Use this metric to measure your overall success as a business. It’s also a key indicator of customer retention and potential growth.

This survey would not be tied to a specific event as it’s for overall satisfaction.

Here are some best practices for the NPS survey:

When to Use the CSAT Survey

This is a great measurement to use after specific interactions, you introduce new products, make website changes, or change a service you offer.

This survey is helpful to gauge how popular certain services or products are.

Here are a few tips for this survey:

Final Thoughts

Ultimately, it’s up to you to decide which is better for your business – the CSAT or the NPS. Many times, you might decide they both serve a purpose in your survey marketing. (tweet this)

Depending on what you want to measure, each one of these customer satisfaction indicators are helpful.

Overall, the more you know about your customers, how they feel about your products, your service, and your business, the better able you are to run a profitable, successful business.

Surveys help you make the best decisions for your business. Are you ready to get started with your free Survey Town trial? Start with your free account today, and you can upgrade at any time.

Image: Robert Bye on Unsplash

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