Customer experience is one of the most important business strategies of our time. In order to offer an optimal customer experience, companies need metrics and tools to help them measure and quantify the customer experience they offer their clients. In this article we explain what the most common CX metrics —NPS, CSAT and CES— are, what they are used for and what are their differences.
Customer experience has become the cornerstone of customer intelligence and customer strategies. Companies are increasingly moving towards a customer-centric perspective and focusing on creating optimal, satisfying and innovative customer experiences to build customer loyalty and enrich their value proposition.
According to a report by McKinsey, a rewarding customer experience increases customer satisfaction by 800% and reduces churn by 60%. On the other hand, Forbes points out that companies that take care of their customer experience generate between 4 and 8% more revenue than other companies in the same sector.
In a context where customer experience is at the heart of the brands' value proposition, organisations require methods that allow them to monitor the performance and effectiveness of the experiences they offer to their customers so that they can improve them.
You will find all the information you need to measure and improve your customer experience in the e-book: "Customer experience measurement tools: NPS, CES, CSAT, Churn Rate and CLTV." You can download it here:
Customer Experience Measurement Tools
There are several metrics for measuring customer experience and, although they are all effective, they ahave slightly different approaches and measure different things. Below we explore some of the most commonly used metrics for measuring CX and the differences between them.
1. Net Promoter Score (NPS)
The Net Promoter Score (NPS) is one of the longest-standing metrics for measuring customer satisfaction and loyalty. First appearing in 2003 in the article The One Number You Need to Grow, written by Reichheld and published in Harvard Business Review, this metric aims to measure a customer's level of loyalty based on their likelihood to recommend the brand or the product or service to a third party.
How does it work?
NPS always begins with the question: "How likely are you to recommend our product or service to a family member or friend?" which is either asked directly to a group of customers or formalised through a survey.
The question asked should always be closed-ended, i.e. customers should respond by rating their likelihood of recommendation on a scale of 1 to 10. Once we have all the answers, customers are classified into promoters, passive or detractors.
2. Customer Satisfaction Score (CSAT)
Customer Satisfaction Score or CSAT is a customer satisfaction metric aimed at quantifying a customer's level of satisfaction after going through all the stages of the customer journey. Of all the metrics, it is the one that most directly measures customer satisfaction, as it takes the form of a survey that asks exactly that. The survey, which can be made up of one or several questions, is conducted shortly after the client has received a product or completed a service.
Although it is focused on satisfaction, CSAT can address several aspects: the product or service purchased, the customer experience received, customer service, delivery, or the quality of the purchasing method, for example.
How does it work?
CSAT questions must also be closed-ended and based on a rating scale, which in this case is of free will. However, in this case there is not a specific question. Each company can use the question that best fits with its business logic.
Some of the most typical CSAT questions are:
- From 1 to 10, how satisfied are you with the product or service received?
- Did the customer service department give you the answers you needed?
- How would you rate the quality and timing of the delivery service?
Unlike NPS, CSAT is quantified through a freely chosen rating scale. Each company can use the scale it deems most appropriate, although scales ranging from 0 to 10 are the most common.
CSAT is also useful for segmenting customers according to their level of satisfaction in order to launch customer engagement actions aimed at improving the level of satisfaction of our less satisfied consumers.
3. Customer Effort Score (CES)
Customer Effort Score or CES measures how much effort a customer has to make to fulfil their purpose every time they interact with a company or how easy it is for the customer to get something from a company.
Compared to NPS and CSAT, CES is the metric that most directly quantifies the customer experience, as its purpose is to determine whether the customer can organically get what they are looking for from their relationship with a brand, or whether the process is too complex.
According to Gartner, CES is 1.8 times more accurate in predicting customer loyalty than CSAT and 2 times more accurate than NPS.
Thus, CES is very useful to identify the pain points clients face during the customer journey.
How does it work?
CES is based on the question "How easy was it to get what you were looking for?" or other variants such as <<How much do you agree with this sentence: "Brand X made it very easy for me to get what I was looking for"?>>
Again, the question must be close-ended and can be answered on a numerical scale which, in this case, must fo from 1 to 7.
How to calculate NPS, CSAT and CES?
Learn how to calculate these and other customer experience metrics in our free e-book. You can download here:
What metric shall you use?
All the customer experience measurement metrics mentioned in this e-book are effective to know our customers’ level of satisfaction and to identify insights to optimise the customer experience.
However, depending on what we want to achieve or measure, one or the other will be more appropriate.
- If we want to find out how many loyal customers we have or the percentage of new customer acquisition contribution (CAC) over our existing customer portfolio, NPS is the most effective metric.
- If we want to measure the performance of a particular customer-related business process, a communication channel or a particular stage of the customer experience, CSAT is the quickest and easiest way to obtain reliable results that allow us to draw clear conclusions.
- If we are interested in measuring our overall customer experience and identifying the pain points, CES is the most appropriate metric.
In this article we have explored some of the most useful metrics for measuring customer experience. However, there are other indicators that you can use. Learn about them in the e-book: "Customer Experience Measurement Tools: NPS, CES, CSAT, Churn Rate and CLTV."