The Ultimate Guide on 3 Important Customer Happiness Metrics- CSAT, NPS and CES

Customer satisfaction metrics have become a key catalyst to improve customer satisfaction & for the organization’s growth. According to Gartner, over 5,000 organizations worldwide now have a dedicated CX leader, nearly half of whom report to the CEO.

According to Forbes, the number of CX executives are expected to grow by at least 25% every year.

With the CX recruitment comes the need to measure the effectiveness of

• CX Executives — who need market differentiation and a demonstrable ROI
• Employees — to grow out of their siloed empires and take ownership of the customer expectations (manage churn)
• Policies and processes— that are diverse and complex, that often need a reality check and revisions to adjust to a more customer-centric culture

However, with so many jargons and metrics to keep track of, it can get confusing on how you can get started to measure your company’s CX initiatives. Measuring CX need not be that complicated or expensive.

In fact, it’s fairly simple to incorporate customer satisfaction measurement with the help of a few very important metrics that can be easily measured and incorporated into your current customer success initiatives.

For the sake of gaining clarity, first, let’s understand what defines a customer satisfaction metric.

Customer satisfaction metrics are basically numerical scores or data that summarize and indicate the health of your organization’s offerings and relationships with the customer.

Without tracking key CX metrics, companies don’t have the necessary details to act upon the problem areas on all aspects of their customer experience journey.

With the OKRs and KPIs culture setting in, these CX metrics are often connected to a company’s finances and play a crucial role in depicting ROI and for seeking additional funds or buy-in to implement customer experience initiatives.

To truly measure customer experience at scale, organizations may need to track three very important metrics that can help any business better understand their customers better.

They are the Net Promoter Score(NPS), the Customer Satisfaction Score(CSAT) and the Customer Effort Score(CES).

1. Net Promoter Score(NPS)

NPS stands for Net Promoter Score and is a powerful metric to measure a customer’s core sentiment towards your brand.

Net Promoter Score is defined around a single question where businesses can ask their customers the following question:

Your brand detractors, are those customers who assign you a score of 6 or below 6 and your brand promoters are those who rate a score of 9 or 10.

Passives are those customers who rate you a score between 7 and 8 (both included)

To calculate your brand’s Net Promoter Score (NPS), subtract the % score of Detractors from the % of Promoters.

For instance, if 70% of respondents were Promoters and 10% were Detractors, your Net Promoter is a score of 60.

Why NPS

Several studies indicate a high correlation between NPS and customer experience.

NPS is often regarded as the holy grail score that drives an organization’s CX initiatives. According to a recent CX study, NPS has proven to be a reliable predictor of future repeat business growth or decline.

• It gives you a measurable insight towards the sentiment that your customers have for your brand and it helps you map on how your brand fares in the loyalty spectrum. In other words, it helps you anticipate the churn both at an individual and at a macro industry level.
• Organizations can easily track and quantify NPS over time, creating internal benchmarks to improve customer satisfaction & customer loyalty.
• It’s also a macro score to motivate employees and set a business vision of earning more promoters.

What is a good NPS score?

To answer what is a good net promoter score, In an ideal world, a perfect NPS score of 100 indicates that every survey respondent would recommend a company to someone else—a score that apparently no company has achieved so far.

However, NPS scores are skewed towards the nature of industry/products/services offered.

For instance, the e-commerce industry has several touchpoints to measure and improve customer satisfaction, NPS and hence reports a relatively higher average industry score.

However, industries like manufacturing or agriculture are yet to be fully digitized to make use of such surveys. It may not be uncommon to find the average NPS of industries like telecom and manufacturing to linger in the negative range.

Top-notch companies generally have an NPS score of 70 and above, but even a few top companies like Netflix, Apple, and Amazon linger around the 40-50 range. (Netflix has an NPS of 64, PayPal scored 63, Amazon 54, Google 53, and Apple 49)

The danger signs are when a company receives a negative score against a higher positive industry score. A negative NPS score against an average high positive industry benchmark is a sign that an organization has some serious work to do to improve customer satisfaction,

its churn rate, implement policies and practices that generate more promoters.

Limitation of NPS

Despite being a holy grail of the customer satisfaction metric, NPS scores and its measurement methodology may not reflect the details on customer sentiment across certain important touchpoints.

There is also a strong view on the fact that one question on NPS may not provide the rigor and information demanded by large organizations to improve their customer loyalty, improve customer satisfaction and brand sentiment.

Customer Effort Score(CES)

CES stands for customer effort score that is defined by Gartner as a customer experience survey metric that enables organizations to account for the ease of completing a certain transaction/service request/task.

CES is measured by asking a single question after the customer completes a certain task/transaction such as

•  After completing a product/service purchase
• After interacting with a customer support/service executive
• After an aggregated experience of completing certain processes as part of the product or service journey.

CES surveys tend to be framed as a question on a scale of ‘very easy’ to ‘very difficult’, based on how easy was it to complete or interact a <> or with <>” and the response can be measured on a scale from 1 to 7 or 1 to 5, with 1 representing the highest level of disagreement and 5 or 7 highest level of agreement with the statement. Few examples are listed below

A. To what extent do you agree with the following statement:

<< Product/Policy name>> transaction/onboarding/resolution was simple, straightforward, and painless.

1.  Strongly disagree
2. Disagree
3. Somewhat disagree
4. Neither agree nor disagree
5. Somewhat agree
6. Agree
7. Strongly agree

B. Overall how easy was it to resolve your query today?

1. Very difficult
2. Difficult
3. Neither
4. Easy
5. Very Easy

Why Measure CES

• CES makes it easier to understand how user-friendly a product/service offered. A negative change in CES means customers are struggling to easily use your product or are facing hurdles in getting their issues easily resolved.
• CES gives a quick and important insight into the difficulties in key touchpoints of a customer’s journey and helps in quickly identifying the issues (e.g., a payment gateway glitch, issues in resolution time, inefficient process/policy, or an ineffective product feature)
• CES also tends to act as milestone surveys where companies can automate the survey at key touchpoints of the customer lifecycle (purchase, or immediately after completing the onboarding process, etc).
• According to an HBR study, 94% of customers reporting low CES said they would repurchase- indicating that CES is a strong predictor of future repeat purchase behavior
• It’s a metric that offers the company a tactical measure to gain clarity on the internal processes and easily act upon the feedback.

Limitations of CES

• Although CES is a good indicator of repeat purchase behavior, it is regarded as a transactional metric that lacks the ability to pinpoint and identify why customers faced difficulty while completing a certain task/transaction/process.
• It lacks the macro-level view on how a customer feels about the overall brand/company. There are high chances that a customer may face hurdles completing a certain transaction but is overall very pleased associating with the product or brand.
• Insights on macro-economic factors such as price, competition or industry trends are not considered or indicated in the CES metrics

What is a good CES score?

As per the scale from and the question asked, an agreement ( agree/ easy/05 ) with the statement that positively reaffirms a pleasant onboarding/transaction/payment/issue resolution experience is a good score.

If your CES percentage is under 5 or under 70%, organizations should investigate, identify and eliminate the obstacles that hamper the customer’s ease-of-use at the measured touchpoints.

Customer Satisfaction Score(CSAT)

CSAT stands for customer satisfaction score that measures a customer’s satisfaction level using a question in the format:

“How would you rate your experience with [placeholder brand name/ process/touchpoint]?”

This question is asked after the customer interacts at a specific touchpoint. In a way. CSAT is a direct measure of short-term customer satisfaction.

CSAT scores can be delivered via scales of 0 to 100, 100 being total customer satisfaction. A CSAT score of 80% is a good indicator of success, although it may vary by industry.

Here’s one of the most common examples of a CSAT survey :

Why Measure CSAT ?

• CSAT surveys can be used to measure specific issues across different touchpoints. For example, CSAT surveys can be used by product teams to measure the effectiveness of a certain feature, it can be used by the support team to measure the efficiency of an issue resolution, etc.
• CSAT is a versatile score that can indicate the short-term success of CX initiatives. CSAT helps organizations discover gaps in their CX initiatives and make improvements across the customer’s a product/service journey.
• CSAT surveys are very simple, comprehensive and easy to execute
• Ultimately, timely CSAT surveys ensure that your organization has a process of listening to customer feedback, provides a leeway to offer incentives, and keeps them about implementing their suggestions.
• Overall regular implementation of CSAT surveys and suggestions can help organizations come across as a conscientious brand

What is a good Customer Satisfaction Score

Since CSAT defines the short-term happiness of a customer after interacting at a specific touchpoint, low satisfaction scores indicate signs of trouble.

Limitations of CSAT

• Since CSAT surveys focus on specific touchpoints of the customer’s journey, they reveal satisfaction levels for a narrow area of the customer journey preventing companies from getting the overall satisfaction levels with the brand.
• At times, CSAT surveys must be accompanied by additional questions to unearth the reasons behind low satisfaction levels.
• As such customer satisfaction levels may be skewed if fewer respondents fill out the survey. For instance, if a high number of passives and detractors do not fill out the survey and only promoters fill out the responses, it may give organizations a high CSAT score that does not reflect the sentiments of its dissatisfied customers.

What metrics work best?

As each metric has its inherent advantages and weaknesses, there is no single CX metric that works best for all situations. Rather organizations should deploy measuring metrics that can help them achieve 3-4 key objectives as depicted below:

A) Drive business success: NPS and CES surveys can help organizations uncover the overall brand sentiment
B) Rally internal employees, operations and processes: CES and CSAT surveys can help organizations discover gaps in their internal processes and inefficiencies
C) Engage customers: CSAT surveys can achieve the short-term objective of engaging customers over a certain experience while NPS surveys are key to detecting the overall customer happiness.

To sum it all up 3 quick ways to deploy and improve customer satisfaction include:

1. Right Timing with the right frequency: Organizations should start by defining key objectives, segmenting customers whose experience you want to measure and then engaging with them at key touchpoints. Companies can decide the timing and interactions by segregating the surveys into transactional and relationship-based surveys.

CSAT and CES surveys that are transactional in nature should be done when an interaction or touchpoint is on top of a customer’s mind. Any delay in automating these surveys results in lower response rates.

To start with, companies should consider interacting with the customers at least in 4 or 5 important touchpoints:

• Point-of-sale purchase/immediately following a transaction
• Downgrading from a paid subscription
• Customer refunds or cancellations
• First-time subscribing to a product
• Product returns
• After interacting with a customer service executive
• Overall quarterly/half-yearly/yearly product renewals

Whether you want to study and discuss the trends after a certain interaction or on regular monthly/half-yearly is a vital decision because it helps organizations keep track of whether the CX efforts are paying off.

2. Gain Holistic viewpoints with both micro and macro-level analysis: A single score does not give a holistic picture of meeting all your objectives. Customers may be satisfied with a certain touchpoint, but that does not mean they will be loyal to your brand. Therefore, all three scores-NPS, CSAT and CES should be viewed alongside other KPIs for a more complete picture.

To prioritize which scores matter, a thumb rule could be to consider

• How common is the issue/experience and what % of users does it affect
• How serious is the issue? Is it key in reducing churn rate, can it improve customer satisfaction & brand recall and sentiment? Or is it just a minor touchpoint?

3. Implement feedback: Several CX studies indicate that 95% of organizations collect customer feedback, but only 5% inform customers about the feedback that was implemented.

Keeping customers in the loop shows that you value their inputs. Circle back with your customers and inform them about the new initiatives and suggestions implement based on their feedback collected.

After all, organizations live and die by their brand reputations. To achieve greatness, companies must start living by the culture of actively listening and implementing their customer’s feedback.