What is the difference between Customer Satisfaction (CS) and NPS?
Customer Satisfaction (CS) and NPS are very useful indicators for understanding customer experience (CX).
But what’s the real difference between customer satisfaction and NPS?
And what about issues that cannot be identified by customer satisfaction and NPS alone? I will explain it in order from now on.
What is Customer Satisfaction (CS)?
Customer Satisfaction (CS) CS stands for Customer Satisfaction. Customer satisfaction is a measure of how satisfied a customer is with your service. Many companies use a five-point scale.
With economic development, marketing indicators have been sought, and customer satisfaction has come to be regarded as indispensable for a company to maintain its growth.
What are the three indicators of customer satisfaction (CS) (CSI, JCSI, NPS)?
Three representative indicators of customer satisfaction
・ CSI
・ JCSI
・ NPS
there is.
CSI (Customer Satisfaction Index) is a customer satisfaction index that scores customer satisfaction through multiple questions that are closely related to each other, such as customer expectations, customer dissatisfaction, perceived values, and perceived quality. ..
JCSI (Japanese Customer Satisfaction Index) is an improved version of CSI, which gives scores from six items: customer satisfaction, customer expectations, perceived value, perceived quality, recommendation intention, and loyalty.
The final NPS (Net Promoter Score) is a numerical representation of customer loyalty. Customer loyalty is the trust and attachment that a customer feels about a company or brand.
And in recent years, NPS is considered to have a higher correlation with corporate performance than customer satisfaction, and it is becoming more important. The reason will be explained in the next chapter.
What is the difference between Customer Satisfaction (CS) and NPS?
What is the difference between Customer Satisfaction (CS) and NPS?
First of all, what is NPS (Net Promoter Score)?
NPS stands for Net Promoter Score.
First the customer
・ Recommender
・ Neutral
・ Critic
It is classified into three types.
“How likely are you to recommend this product to close friends and family?”
The evaluation is made on an 11-point scale from 0 to 10, with 9 to 10 being the recommender, 7 to 8 being the neutral, and 0 to 6 being the critics.
Those who answered 9 to 10 are those who love this product and recommend it to those around them.
Those who answered 7–8 are those who are in a neutral position. If a more attractive product comes out, we may switch to it.
Those who answered 0 to 6 are those who take a critical position on this product. It may be someone who switches to another company’s product and spreads negative impressions.
And the ratio of recommenders-the ratio of critics = NPS. The higher the number of recommenders, the higher the NPS number, and the higher the number of critics, the lower the NPS number.
What is the difference between customer satisfaction and NPS?
Customer Satisfaction (CS) represents current customer satisfaction.
However, unlike customer satisfaction, NPS provides long-term satisfaction, including today.
Represents.
NPS numbers should be positive for the future and will be a great help in improving towards your goals.
Customer Satisfaction (CS) and NPS, Benefits of Each
Advantages of customer satisfaction survey
By conducting a customer satisfaction survey, customer satisfaction is expressed as an objective numerical value.
By improving the service based on that data, the number of repeaters will increase as customer satisfaction increases.
The greater the profit that a customer brings to a company, the higher the profit of that company.
That value is called lifetime value (LTV).
Also, as customer satisfaction increases, so does the number of new customers. Now, when a good review is written on the Internet (SNS), the information spreads more quickly than in the past.
The disseminated information has a positive effect on sales. This is a great opportunity to attract new customers as well as existing ones.
Customer satisfaction surveys can also help you follow up with new consumers. By always being aware of customer satisfaction, new customers will eventually become fixed customers and support sales.
And the recognition and liking of the company will increase. Once a good image is established, the number of new customers and repeaters will increase, and the company will prosper more and more.
Benefits of NPS
The advantage of NPS is that it correlates well with business performance. Customer satisfaction surveys have long been used to measure customer satisfaction and accomplishment with their products. However, customer satisfaction is not always reflected in future performance.
Even customers who answered that they were satisfied in the customer satisfaction survey did not necessarily repeat it next time or recommend it to their friends and family.
Therefore, attention has been focused on NPS, which is more likely to be reflected in future business performance.
So why is the NPS highly correlated with performance?
A high NPS number means that there are few critics and many recommenders. This has four main positive effects on a company’s performance:
・ Repurchases and continuous purchases will increase.
・ The possibility of connecting to up-sell and cross-sell increases.
・ The number of customers recommended to friends and acquaintances will increase.・ Post favorable reviews on SNS etc.
The lifetime value of the recommender is said to be about 2.4 times that of the critic. Many companies are adopting NPS today because it is a simple measurement method and can be expected to have a strong correlation with business performance.
Disadvantages of customer satisfaction (CS) and NPS
Disadvantages of customer satisfaction survey
Customer satisfaction surveys can be said to be a very effective means of picking up VOCs (voices from customers) and using them to improve our services. However, depending on the method of implementation, it may not work properly.
The reason is
・ The goal of conducting a customer satisfaction survey is unclear.
・ The purpose of the customer satisfaction survey is itself.
-Individual results of customer satisfaction surveys are highly dependent on customer subjectivity.
And so on.
If the goals and standards that the company aims for are not clearly defined (for example, only comparison with the previous year), or if the survey itself has become a goal, how to follow up the results and use it as the next management strategy. There are cases where it is not clear whether to connect and the data collected from the phrase is not utilized.
And the individual results of a customer satisfaction survey are highly dependent on the subjectivity of the customer. Even if the service is of the same level, the answers may differ greatly depending on the situation at that time. Therefore, there are cases where questions arise as to whether the data is truly objectively reliable.
Disadvantages of NPS
One of the disadvantages of NPS is that it cannot fully clarify the reasons for critics on its own. Unless the clear reasons for each of the recommenders and critics are known, specific measures cannot be devised.
And without a follow-up plan for the results, it will not lead to substantial business improvement.
In addition, NPS cannot unify the evaluation criteria with other companies. It is difficult to make an accurate comparison with other companies. Therefore, NPS should be used only for the purpose of improving services in various comparisons within the company.
Even within the same company, the answers will change significantly depending on the conditions, for example, depending on the timing of the questionnaire (immediately after the purchase, or after a long time has passed since the purchase).
Therefore, as much as possible, it is important to keep in mind to accumulate high-quality data by unifying the conditions and the content of each question and continuously acquiring data.
How to solve problems that cannot be identified by customer satisfaction (CS) and NPS alone?
Customer Satisfaction (CS) and NPS alone cannot identify all issues
Customer satisfaction surveys and NPS alone cannot identify all marketing issues. Because neither can explain the entire customer experience (CX).
If your customer satisfaction survey or NPS numbers are low, there are usually multiple reasons.
However, identifying one of them often depends on the thinking of the interpreter, which does not provide the exact cause.
Therefore, it is necessary to acquire multiple objective indicators and clearly identify the cause of the problems that have emerged in customer satisfaction surveys and NPS.
As an index for that,
・ GCR (Goal Completion Rate)
・ CES (Customer Effort Score)
・ CSAT (Customer Satisfaction Score)
There are three.
GCR (Goal Achievement Rate)
What is GCR (Goal Achievement Rate)? Did the customer achieve the purpose by purchasing the product? It is an index showing.
If the customer fails to achieve their goals, why couldn’t they? What were the customers looking for in the first place? Needs to be investigated and improved.
CES (Customer Effort Index)
CES (Customer Effort Index) is an index that shows how a customer was able to achieve his or her goals without any hassle and time.
If the customer can solve the problem easily and speedily, the customer’s credibility with the company will increase and the number of referrals will increase.
“How easy was the work of XX?”
Ask questions such as, have them evaluate on a scale of 5 to 7, and give the score.
CES serves as a complement to the problems found at GCR, helping companies figure out where to improve to achieve customer satisfaction.
CSAT (Customer Satisfaction Index)
CSAT (Customer Satisfaction Index) is an index that shows the emotional satisfaction of customers.
The customer’s emotional satisfaction is quantified in a specific situation by giving a rating on a scale of 5 from very satisfied to very dissatisfied.
If a customer is emotionally satisfied, they are inevitably more likely to be repeated. Rather than acquiring new customers
CSAT scores are a very important indicator for businesses, as it is much cheaper to appeal to existing customers.
By capturing the three indicators of GCR, CES, and CSAT, you will be able to discover problems that could not be identified by customer satisfaction surveys and NPS alone, and use them to improve business performance.
What is the difference between Customer Satisfaction (CS) and NPS? In addition, a summary of points to note when implementing
So far, I have explained about customer satisfaction (CS) and NPS, and points to note when implementing them.
Customer Satisfaction (CS) and NPS are very effective indicators for understanding customer experience (CX).
However, customer satisfaction only represents the satisfaction of the current customer, and does not promise the degree of growth of the company in the future.
Since then, there has been a gradual focus on NPS, which has a higher correlation with corporate performance.
Many companies have adopted NPS because it has the advantage of being able to quantify how much trust and attachment a customer has to a company or brand.
In order to gain a deeper understanding of customer sentiment, it is essential to consider customer loyalty and customer engagement (which represents the strength of the connection between the company and the customer).
