What’s Your NPS And CSAT, And Why Do They Matter?

To find out how satisfied your customers are, look at CSAT and NPS.

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When it comes to running a business, your customers’ satisfaction matters. After all, without satisfied customers, you wouldn’t be in business in the first place. To help gain insight on how happy your customers truly are with your business, you can utilize metrics, like NPS and CSAT. Never heard of these before? No worries—I’ll give you the scoop on what they are and how you can use them at your business.

NPS And CSAT: What They Mean To You

If you’re new to this whole NPS and CSAT thing, you may have a lot of questions. But have no fear—I’m here to break it all down for you. So, what exactly are NPS and CSAT? Let’s get into it.

NPS

An NPS, or Net Promoter Score, is a metric you can use for insight on customer loyalty and how likely they are to recommend your business to a friend or colleague.

Your NPS allows you to gauge how a customer feels about your business by asking one simple question: How likely are you to recommend Product XYZ to a friend or colleague on a scale from 0 to 10? Here’s a breakdown of how the scoring works:

  • 0 – 6: Detractors who are unhappy customers who may churn (these account for 80% of negative word of mouth—yikes!)
  • 7 or 8: Passives who are somewhat satisfied with your product or service
  • 9 or 10: Promoters who love your offerings and are fans of your business (these are the customers giving you that word-of-mouth marketing!)

There are a ton of benefits you can reap from using an NPS. Not only can it measure customer loyalty, but it can also help boost long-term customer relationships, reduce churn, and pinpoint problems. At my accounting software and payroll company, Patriot Software, we love using NPS to get instant feedback from customers (our score is currently at 85).

Monitoring and tracking your score on a regular basis (e.g., weekly) can give you insight into how customers feel about your product or service and if you need to make any improvements. If you notice a dip in satisfaction and a rise in negative feedback, it’s time to make a change.

Keep in mind that Net Promoter Score can vary by industry, so be sure to do your homework to find out the average score for your industry.

CSAT

Another customer satisfaction metric you can measure is CSAT, or a Customer Satisfaction Score.

A CSAT measures customer satisfaction with a business, purchase, or interaction. So, you could use your CSAT to get feedback on a variety of things (e.g., customer service, recent purchases, etc.).

Like with NPS, you typically ask one simple question to customers. For CSAT, you may ask something like, How satisfied were you with your experience? Survey scales can range depending on your preferences. For example, your survey may ask for customers to rank their experience on a scale of 1 – 3, 1 – 5, or 1 – 10.

A score of 80% or higher is typically considered good for CSAT. However, average or “good” scores can vary by industry. So, be sure to do some research to find out what kind of scores you should be shooting for.

Once you determine your industry’s average rating, you can compare it and use it to make improvements (aka achieve a higher ranking than the industry average). At Patriot Software, we currently have a CSAT of 84—and we’re pretty dang proud of it. But, we’re always looking for ways to get to as close to 100 as possible.

Your CSAT is a great way to quickly get feedback from customers. You can easily plant quick surveys in an app, on a webpage, or in an email to get feedback from customers.

It’s short and simple, and you generally get a high response rate because it’s a single, easy-to-answer question.

How To Use Your Scores To Better Your Business

Once you collect your scores from customers and participants, don’t just set them aside to collect dust. Instead, use them to your advantage to make improvements to processes, products or services, operations, and more. Here are four ways you can use your scores to better your business (coming from a fellow business owner who uses both to make improvements on a daily basis).

1. Improve Interactions With Customers

You can use both your NPS and CSAT to get valuable feedback from customers. Depending on what software or method you use, you can ask customers to provide additional feedback to go along with their rating. And then based on that said feedback, you can improve interactions with customers.

For example, you can use your NPS ratings to find out why people prefer your business over a competitor. Then, use your findings to tweak interactions with prospective customers. Or, say you’re using CSAT to find out how your business’s customer service is. You can use your ratings to see where communication with your customers needs improvement.

The way you interact with current or potential customers is oh-so-important for your business’s success. If you don’t listen to what prospective and current customers have to say when they’re scoring your business, you could wind up making even more mistakes, costing you loyal customers and lots of money in the long run.

2. Pinpoint Problem Areas

I might sound somewhat like a broken record, but here it goes: Customer satisfaction surveys are an A+ way to pinpoint problem areas and overcome customer issues before they snowball out of control. Why? Because they provide you with open and honest feedback.

Let’s face it—as a business owner, negative feedback always stings a little. But, it’s necessary if you want to make improvements and better your business. Your CSAT and NPS can give you insight into common problems or complaints, ways you can improve your product or service, and how you’re doing as a business overall.

So when looking at your scores, keep a close eye on the negatives. That way, you can see where your business is falling short and can make tweaks along the way to improve your metrics and customer satisfaction.

3. Reduce Churn

No business owner wants to lose any type of customer. But sometimes (and sadly), it’s inevitable. Not everyone is going to like your business and offerings—and that’s OK. However, you can use your customer satisfaction surveys to potentially reduce customer turnover and increase satisfaction.

The thought of customer churn may make you cringe, but it’s something you absolutely need to keep in mind if you want your business to thrive. Not to mention, the cost of retaining customers is significantly cheaper than acquiring new ones, so you want to do everything you can to hold onto the ones you have. Cue customer satisfaction scores.

Your scores are a big red alert system for potential churn. But luckily, you can use them to catch an upset customer and (hopefully) reconcile the issue before they decide to leave for good.

So again, keep an eye on the negative scores/feedback you receive. That way, you can nip problems in the bud before they spiral out of your control (picture bad word of mouth, negative reviews, and disgruntled customers).

4. Increase Positive Reviews

Your customer satisfaction metrics aren’t only for pinpointing problems and turning frowns upside down. You can also use positive feedback from NPS and CSAT to ask happy customers to spread the word about your business in a good way.

Pay attention to the positive feedback just as much as you do with the negative feedback and scores. For promoters (people who gave you an NPS score of 9 or 10), you can ask them to leave reviews for your business. Same goes for customers who give you top scores for CSAT (e.g., satisfied or highly satisfied).

Don’t miss out on using positive feedback to your advantage, too. Sift through your positive ratings (hopefully there are a lot of them!) and reach out to those promoters or highly satisfied customers. Chances are, they won’t mind sharing their experience and spreading the good news about your business.