NPS vs CES vs CSAT: What Works Best for Small Businesses?
Customer satisfaction metrics are the way forward when it comes to measuring the health of your business, identifying issues, and taking corrective actions. Small business owners can do this pretty much every day through customer interactions.
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On the other hand, if you are aiming to measure specifics or your customer interactions are not as direct and frequent as you wish them to, then you need to figure out how to assess customer satisfaction that makes sense for a small business operation.
How To Assess Customer Satisfaction in Small Business
Measuring Customer Satisfaction for Small Businesses
There are three accepted methods of customer satisfaction metrics, namely Net Promoter Score (NPS), Customer Satisfaction Score (CSAT), and Customer Effort Score (CES). All three methods are easy and straightforward in terms of application along with being repeatable and quantitative; enabling you to set benchmarks for your business. It also allows you to evaluate how your business is performing in terms of satisfying customers.
Email is one method of collecting data for your customer satisfaction metrics. Alternatively, you can create a free online survey which you can circulate amongst your existing customer base. Regardless of the medium of collecting responses, you need to have a good sample size to draw definite conclusions.
The metrics should be able to project how your customers are feeling quantitatively. However, it does not answer the question ‘why.’ Apply subsequent methods of follow-up surveys, interviews that generates additional information or responses. This helps in resolving customer issues swiftly.
Methods of Customer Satisfaction Metrics
As a small business owner, you have to decide which format of customer satisfaction metrics suits your operational structure the best.
NPS or Net Promoter Score:
Considers to be one of the most accurate forms of customer satisfaction metrics, NPS has found favor amongst most small, medium, and large-sized organizations. It is best at evaluating key metrics that are beyond customer satisfaction, which include customer spending, income growth, and customer retention.
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With Net Promoter Score, you calculate customer response based on the questions – “How likely is it that you would recommend our company (or product or service) to a friend or colleague?”. Typically, your customer responds on a scale of 1 to 10. Responses lower than 6 are the ‘detractors,’ 7 and 8 are ‘neutral’ and 9 and 10 are ‘promoters.’ The formula for calculating NPS is:
1. Net Promoter Score = % of Promoters – % of Detractors
2. % of Promoters = # of Promoters / Total Respondents
3. % of Detractors = # of Detractors / Total Respondents
For small businesses, the response to the overall feeling of your customers to your brand is an accurate indicator of measuring customer satisfaction. You can measure this at any stage of the business.
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CSAT – Customer Satisfaction Score:
If you are looking to measure customer satisfaction around a specific item like about a particular product, new service, the check-out experience, or something else, then CSAT or Customer Satisfaction Score is the way to go.
Except for the fact that you can set the score with CSAT, it is quite similar to NPS. Customer satisfaction can be measured on a scale from 1 to 3, 5 or 10. Here, the question slightly changes to – “How would you rate your overall satisfaction with X?”. X here denotes the particular item that you need to measure customer satisfaction for.
With CSAT, you can calculate the score as a percentage taking into account only the highest responses. A typical calculation would look like:
( [number of responses answering 4 or 5 out of 5] / [total number of responses] ) x 100
Measuring customer satisfaction with CSAT should be done in a way that makes sense concerning the item that you are going to examine. However, you need to ensure that the feedback mechanism that you have in place to collect CSAT score is relevant, timely, and easy for customers to understand. Small businesses need to have a plan in place about how you want to use the results and follow it up a subsequent measurement at a future date.
CES – Customer Effort Score:
The CES is very much like the CSAT where a customer is requested to offer feedback on their satisfaction level using a value between 1 and 5 or 1 and 7. The objective of a CES is to resolve issues that result in creating a top-notch platform for customer experience.
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The concept of CES is based on the impact of negative CX that results in greater negative influence as opposed to positive experiences converting into a positive influence. Hence, it is necessary to address the negative experiences first.
Generally, the questions should be poised on the ease or difficulty of use of a specific business aspect. Customers typically respond either in agreement or disagreement to the question asked. CES is an excellent method to assess customer loyalty. If your customers find it difficult to use your systems and processes, in most cases, they tend to switch to your competitor. On the other hand, if you have ease of usage, your customers will retain their loyalty for your brand.
Customer Survey Metrics that Will Suit Small Businesses
Whichever metrics of customer satisfaction that you apply, it has to be done on a fairly regular basis. That holds true even if your scores are not consistently high. Ideally, you should have a plan in place to act on your corrective measures. You need to take a hard look at your business and make changes that are value additions.
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For small businesses, in particular, your aim should be to keep your customer efforts on the lower end and loyalty and satisfaction on the higher side. Using a combination of CES and CSAT metrics works for most business organisations. However, you need to run an NPS survey regularly to cover all your bases.
Angela White is an ed-tech enthusiast with a passion for writing for the consumer market in the areas of product research and marketing using eLearning softwares. Having a knack for writing and an editorial mindset, she has been writing for ProProfs: a brand that’s known for creating delightfully smart tools such as ProProfs Survey Maker.