NPS, CSAT, Net Promoter Score, Customer Experience

CSAT or NPS®? Neither of them matter!

Written by Vivek Jaiswal | Co-founder, Customer Guru

If you have been wondering whether NPS® or CSAT is better, I have an answer for you.

It has been a long running debate whether  NPS® or CSAT, or any of the newer measures such as CES, Delight Score etc is better than another. I have been an active participant in this debate and, quite honestly, I don’t have a definite answer for that yet. While I tend to be inclined towards NPS® since it is easier to understand, empirically proven, actionable, and has been adopted by leading brands as an indicator of customer experience, I am of the opinion that neither of those scales is that important.

In his book ‘The Ultimate Question 2.0’, Mr. Fred Reichheld talks about Enterprise Rent-A-Car – one of the most successful car rental company, which uses a home grown metric to measure and improve customer experience. Going by how much customers love doing business with Enterprise, it is fair to say that their home grown metric has worked wonderfully well for Enterprise. So, if NPS or for that matter any other metric is not important then what is? Here’s the answer:

Remember The Golden Rule

One should treat others as one would like others to treat oneself.

Make this your customer experience philosophy and it will give you better results than any other metric.

Close the feedback loop

So many organisations take customer feedback but never followup to close the loop. No matter which customer experience measure is put in place, unless an organisation sets the right channels and processes to close the feedback loop with their customers, all of that data is going to be of no help. Closing the loop means not just sending an automated response saying ‘We’ve received your request and are working on it…’, but reaching back to the customers to understand the real issue and, ultimately, resolving those issues.

Empower your employees

So many organisations wish to be more customer centric but forget that they can only make their customers happier if their employees have the power to act on the customers’ behalf. Customer centricity should become a company culture so that everyone in the organisation has the power to speak for the customers. Employees are the only ones who can make a customers happier or more disappointed, CXO’s cannot be involved in every customer transaction.

Walk the talk

When top management not just talks but also acts to show that customer experience is important every day, each day, it is only then that everyone starts taking it seriously. One of the biggest mistakes leaders make when starting to use a customer experience metric is to assume that their job is done once the plans have been developed and cascaded. To sustain the momentum in long term, constant and visible leadership energy for customer centricity is required. The leader must be seen and heard, expressing a genuine sense of urgency, commitment, and passion. Without these, it’s difficult for organisations to embrace the call to action.

In conclusion, organisations can achieve similar results by using any of the customer experience/loyalty/satisfaction metric as long as they focus on taking action on customer feedback and not just reporting the delta in their score every month. Any metric is just a measure of how well have you been doing these things.

Would love to hear your feedback and comments. Please let me know what other important steps an organisation must take irrespective of which loyalty scale it uses.

  • Nice post, Vivek. I do think that you’re creating a bit of an artificial strawman argument about NPS, however. At Bain & Company, Fred and I have concluded (and actually written in the book you cite) that there are at least three core requirements for a healthy Net Promoter SYSTEM:

    1. That you have a reliable way to sort customers into Promoters, Passives and Detractors (though the exact method you use might or might not include the likelihood to recommend question)
    2. That you use a high-velocity closed-loop feedback, learning and action mechanism — that you connect feedback directly and immediately to the employees who need to hear it, and that you follow up with customers whose feedback merits it
    3. That the focus and strategy be grounded in growing the business profitably and sustainably by earning customer (and employee) loyalty

    Bain’s approach to customer loyalty focuses on developing a company’s capability to deliver on these three requirements. Importantly, as you point out, the exact method of determining whether customers are promoters, passives or detractors is less crucial than that there be a reliable way to do it and that it reflect customer behavior and economics. Importantly, in our experience working with dozens and dozens of client companies, the Net Promoter Score (based on likelihood to recommend measured on the 0-10 scale) has most often turned out to provide the best balance of simplicity, employee inspiration, and statistical validity. We’ve experimented with many other questions and indexes based on multiple questions. While not the best for every single situation, NPS is far and away the methodology that turns out to be best in the vast majority.

    If the point of your post is that it’s the SYSTEM that generates business impact, then we’re fully aligned. You can read more at http://netpromotersystem.com.

    • Vivek Jaiswal

      Thanks for the comment, Rob. Like I mentioned in the blog, I prefer working with NPS® – both the score and the system. Of course my intention was to get my readers to focus on the process more than on the score. Because ultimately it is the action after gathering customer feedback, that really makes the difference in customer experience. Needless to say, Net Promoter System® does a great job in setting out that process.