Different metrics exist to measure customer satisfaction. Here we will discuss 3 of them.

Net Promoter Score

When discussing ->Product-Led Growth, we have explained how important referrals are for sustained growth. Word-of-mouth is a key aspect to win more customers while keeping customer acquisition costs low. A popular metric for that is Net Promoter Score (NPS).

The NPS score tells you how likely your customers are to recommend your business to others they interact with. In that way, the metric not only helps win new customers but is also a predictor for retention because a happy customer is unlikely to churn. The data for the score can be obtained with a single question to users:

On a scale of 0 to 10, how likely are you to recommend our [company or product] to a friend or colleague?

The scale ranges from “0 = not all all likely” to “10 = extremely likely” based on which the NPS score is calculated as follows:

  • Determine the number of Promoters – those users who responded 9 or 10 thus showing they are very happy and loyal.
  • Determine the number of Passives – those users who responded 7 or 8 thus indicating they are mostly satisfied but will not stand up for you.
  • Determine the number of Detractors – those users who responded 0 to 6 thus indicating they are unhappy, might churn, and (even worse) harm your brand’s reputation by relaying their negative experiences to others.
  • Then ignore the Passives and simply calculate

NPS = Percentage of Promoters - Percentage of Detractors

Thus, the NPS can range from -100 to +100, a higher value indicating a better result. As per industry standards, scores above 20 are OK-ish, above 50 are considered excellent, and above 80 are world-class.

While a widely used tool in Marketing, the NPS comes with a number of disadvantages specifically for Product Managers:

Sample Size

It is crucial that the NPS is calculated on a large enough sample size. Specifically for companies in B2B, it may turn out to be challenging to convince enough users to provide that feedback, however simple it is.

Cultural Bias
It is known that users in different countries will be more or less conservative in their assessments. What might be super-awesome in the United States, could just be seen as OK-ish in Europe. Not because the perceived experience is worse but because people have this cultural imprint.
Not Actionable

The NPS is a statement about the complete product. Specifically for larger products with lots of modules and functions, it is impossible to derive insights about a specific area inside the product that needs improvement.

Lack of Context

Oftentimes, the NPS survey comes out of the blue for the users. As the product vendor, you don’t understand the specific situation, such as: Which tasks were users trying to complete? Have they been in a stressful situation when responding to the NPS survey? Did they just have a bad argument with their boss? All of that will surely influence whether they act as a Promoter or not.

Sometimes inappropriate

Imagine you are using a tool to report major damages or even human casualties. Suddenly an NPS  survey shows up. How will you feel? The tool might be perfect for that scenario – but it is just inappropriate to ask such a question in these situations.

Customer Satisfaction Score

As the name indicates, the Customer Satisfaction Score (CSAT) is another metric for customer satisfaction. However, different than NPS, the CSAT allows one to collect feedback on a specific interaction, such as a completed task, a customer support interaction, or a purchase.

The actual calculation of the CSAT is less standardized but typically a simple scale is offered (as with NPS) ranging from “0 = very dissatisfied” to “5 = very satisfied” based on which the CSAT is determined as follows:

CSAT = Number of good and very good assessments * 100 / Total number of Assessments

Since the CSAT allows measuring customer satisfaction in relation to specific customer interactions, it allows taking actions accordingly in order to optimize the product or service.

Customer Effort Score

The Customer Effort Score (CES) is another metric that allows to narrow down to specific functions or features of a product. Of course, there are also usage scenarios in other areas, such as “how easy was it to return your purchase?” However, for product teams, the main benefit of CES is that it can be applied to any task immediately after the user has completed that task.

On a scale of 1 (extremely difficult) to 7 (extremely easy), how easy was it to complete [the task at hand]?

Based on responses along this Likert scale, the CES score can simply be calculated via

CES = Total sum of responses / Total number of responses

As with CSAT, there is no universal benchmark for the CES due to the different ranges used in measuring. A few more aspects make the CES worth considering by product teams:

  • The CES survey shall be sent to the user immediately after a task or transaction has been completed. Hence, the CES is highly specific to a particular function or feature inside the product which allows immediate action.
  • For the same reason, the context problems from which the NPS suffers are less critical here. When the user just completed a task, any other stressful situations, etc. are probably less relevant.
  • While it is great to have many highly satisfied customers, the CES also provides input for further improvements: For example, users who responded in the range 4-6 show that they were somewhat positive but still struggling. Looking at their journeys might provide the biggest opportunities for optimizations.

Further Reading

What Is Net Promoter Score

What is AARRR Pirate Metrics?

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

To help gain insight on how happy your customers truly are with your business, you can utilize metrics, like NPS and CSAT. 

Mike Kappel | Forbes

Stop Trying to Delight Customers

The notion that companies must go above and beyond in their customer service activities is so entrenched that managers rarely examine it. But a study of more than 75,000 people interacting with contact-center representatives or using self-service channels found that over-the-top efforts make little difference: All customers really want is a simple, quick solution to their problem.

Matthew Dixon, Karen Freeman, and Nick Toman | HBR

Understanding and measuring your Customer Effort Score (CES)

There’s a reason why moving junk food to a hard-to-reach shelf might help us eat less of it: the location is impractical, it’s going to take effort to reach it, and—unless the motivation is really strong—most of the time we end up not actually bothering.