Two popular metrics, CSAT (Customer Satisfaction Score) and NPS (Net Promoter Score), often leave companies wondering, what are the key differences between CSAT vs NPS, and which one should your business be using?

This article dives deep into the CSAT vs NPS debate and describes all you need to know about the unique purposes, methodologies, and applications of each metric. Plus, you’ll also understand how to calculate CSAT vs NPS score.

Differences between CSAT and NPS

The Difference between CSAT and NPS is massive.

CSAT stands for Customer Satisfaction Score. It’s a way for businesses to measure how happy their customers are after their interaction with the company.

Used after a specific interaction, like a purchase or support experience, it reveals how satisfied your customers were in that immediate instance.

NPS, or Net Promoter Score, on the other hand, takes a broader view of your customer’s overall relationship with a brand. It asks one key question: “How likely are you to recommend this company to others?” Customers’ answer, on a scale of 0 to 10, reflects their loyalty and advocacy.

A high NPS score indicates a brand with passionate promoters, while a low score suggests customers who might jump ship.

The table below lists some key differences between CSAT vs. NPS.

Understanding NPS methodology

As discussed above, NPS measures how loyal your customers are by asking a single question: “How likely are you to recommend our product/service to a friend or colleague?” Responses range from 0 (not at all likely) to 10 (extremely likely).

NPS is of two types: transactional and relational.

Transactional NPS is a quick snapshot of how happy customers are right after a specific interaction, like a purchase or support call. It asks how likely they are to recommend your business based on that recent experience.

Relational NPS looks at overall customer loyalty and satisfaction over time rather than just one interaction. It’s about building a long-term relationship with your customers.

Based on NPS survey responses, you categorize customers into:

• Promoters (Scores 9-10): These are your most enthusiastic customers. They’re likely to spread positive word-of-mouth about your product or service and contribute to your business’s growth.

• Passives (Scores 7-8): These customers are somewhat satisfied but might not actively promote your business. They’re neutral and could potentially switch to competitors if offered a better deal or experience.

• Detractors (Scores 0-6): These customers are dissatisfied or unhappy with your product or service. They may share negative experiences that can deter others from engaging with your business.

Dedicated B2B promoters have an average lifetime worth ranging from three to eight times higher than that of detractors. Companies of all sizes use NPS to:

• Track customer satisfaction over time

• Identify promoters (loyal customers who recommend) and detractors (unhappy customers who might churn)

• Benchmark their performance against competitors

• Focus improvement efforts on areas with the most significant impact

How do you measure NPS?

NPS score is calculated by taking the percentage of promoters and subtracting the percentage of detractors from it. This yields a score that can range from negative (if there are more detractors) to positive (if there are more promoters), with zero as the neutral point.

But how NPS score is calculated mathematically?

For instance, if 50% of your respondents are promoters, 20% are passives, and 30% are detractors, the NPS would be calculated as 50% (promoters) – 30% (detractors) = 20.

What is a good NPS score?

A good net promoter score (NPS) falls within the range of 30 to 50. The range indicates that a majority of your customers are promoters, and they’re highly likely to recommend your product or service to others.

Scores below 0 or in the negative range mean that there are more detractors than promoters.

Here’s the breakdown of NPS scores:

• 0-30 is the average NPS score range and means that you have more promoters than detractors.

• 30-50 is a good NPS score, and it shows that you’re delivering a positive experience.

• 50-80 is excellent and indicates strong loyalty and potential for growth.

• 80-100 is world-class. It puts you among the top performers in your industry.

When to measure NPS?

Timing your NPS surveys is crucial for getting the most valuable insights.

Whip out your trusty customer loyalty meter to gauge customer reaction after launching new features, revamping pricing plans, or making significant policy shifts.

Track NPS over time to measure the impact of changes and initiatives. Quarterly or bi-annual surveys offer a good balance between capturing trends and avoiding overwhelming customers.

If you notice a dip in customer reviews, complaints, or social media mentions, consider an NPS survey to pinpoint the root cause and address any emerging issues.

Understanding the CSAT methodology

CSAT (Customer Satisfaction Score) surveys ask customers to rate their satisfaction on a numerical scale or using descriptive labels like “very satisfied,” “satisfied,” “neutral,” “dissatisfied,” or “very dissatisfied.” They might also use smiley faces or thumbs-up/down icons for simpler responses.

For instance, after purchasing a product online, you might receive a CSAT survey asking you to rate your satisfaction with the buying process.

Your response helps the company understand how well they met your expectations and where improvements might be needed.

CSAT directly points to areas where customers are happy or unhappy and helps you focus improvement efforts. Unlike NPS, which is collected less frequently, CSAT provides immediate feedback on specific interactions.

How do you measure CSAT?

You can collect responses to measure your CSAT via email, SMS, in-app surveys, website pop-ups, or during live chat.

Once you have a sufficient number of responses, identify “satisfied” responses. It will depend on your chosen scale. For example, on a 1-5 star scale, you can consider 4 and 5 as “satisfied”.

Then, count the number of “satisfied” responses and the total number of responses received. But how is CSAT calculated?

CSAT is calculated by dividing the number of “satisfied” responses by the total number of responses and multiplying it by 100.

Let’s say you run an online clothing store and send out a CSAT survey to your customers, asking them to rate their satisfaction with the quality of the clothes they purchased. You receive 50 responses, out of which 40 people are satisfied with your fabric quality.

Your CSAT will be 40/50 x 100 = 80%, which means most customers are satisfied with the quality of the clothes they bought from you.

What is a good CSAT score?

What qualifies as a “good” CSAT score can vary depending on factors like industry norms and your specific business goals. But anything above 80% is considered solid.

Here’s a general interpretation guideline for CSAT scores:

• Above 80%: Excellent CSAT score and indicates high customer satisfaction

• 70-80%: It is considered a good score. It shows that most of your customers are satisfied, but there’s room for improvement.

• 60-80%: It is an average CSAT score. It suggests that some customers are dissatisfied. You should investigate it further to identify the cause of their dissatisfaction.

• Below 60%: It is a warning sign. It indicates significant customer dissatisfaction. Take immediate action to address their concerns.

Different industries have different satisfaction expectations. What’s considered good for a luxury hotel might not be the same for a fast-food restaurant.

However, you can research your industry’s average CSAT score on the American Customer Satisfaction Index to get a baseline.

When to measure CSAT?

Measure your customer’s initial impressions after a crucial step like completing an online purchase. It will help you identify any friction points in the buying journey and improve customer satisfaction for future customers.

Understand customer sentiment following service experiences like receiving a delivery, attending an event, or using a repair service.

Capture feedback before a free trial ends to understand reasons for potential churn and encourage conversions.

Before a subscription renewal date, assess customer satisfaction to identify issues and increase retention rates.

NPS Vs CSAT: Which one is the better metric?

So, CSAT vs NPS, which one is better? Well, it depends on what you’re aiming to measure.

In reality, both NPS/CSAT metrics complement each other and provide valuable insights into different aspects of your customer experience.

It’s not CSAT vs NPS. It’s NPS and CSAT together that gives you a comprehensive view of how your customers feel about your business.

Combine NPS for big-picture insights with CSAT’s granular feedback to create a genuinely satisfying customer experience.

Ready to take steps towards customer satisfaction success? Consider using Formaloo, an intuitive survey maker with features that can help you collect, analyze, and act on customer feedback effectively.

Sign up for free today and start making engaging surveys. Follow up on our YouTube channel for more tips and tricks.

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