Basic Metrics: NPS versus csat versus CES

This week, I’ve been reflecting on metrics – what measures really matters, can you pick one single metric to reflect how well you’re delivering the customer experience, and what might that metric be?

In reality, this is a moot point, because there are many factors in deciding which metrics to measure – industry sector, maturity of product & market, business size, demographic & geographic factors, etc.  Of course, for shareholders and investors, revenue generated is invariably going to be right at the top.  However, every business needs to have some measurement of how well they perceive they are delivering against their customer experience, then a customer validation of that score.  The former is well established, often objective and tangible (speed to answer calls, speed of issue resolution, FCR, conversion rates, etc.) The latter means asking a customer their opinion on your customer experience so, let’s review three critical customer experience measures and their usefulness.

Csat (Customer Satisfaction)

This is a great indicator of current “health”, how the customer felt during recent interactions, service experiences or product consumption.  It remains a very popular metric to measure following an interaction, purchase or critical stage of the customer experience because it tells us how the customer felt in the recent past.  The downside of csat is that it has tenuous links to loyalty and length of tenure – you may be very satisfied with your cable TV provider, but if a new incumbent offers you 50% discount to join their service, you may well switch.  Nevertheless, knowing how your customer feels right now is a very valid piece of information.

NPS (Net Promoter Score)

NPS continues to be a metric that we rely on heavily.  It was one of the first metrics proven to reflect the trend around loyalty, because the scoring mechanism ask the participant whether they would recommend the company / product / service.  The real draw of this metric is its polarising nature, disregarding customers giving 7-8 out of 10 as “passives”, and thus tagging only those who gave 9-10 out of 10 as true advocates.  NPS can be used to score different stages of the customer journey, and is a fantastic metric to track change and improvement. But NPS works best where there is sufficient volumes and frequent measurement, otherwise scores can swing dramatically, making it hard to understand the influencers and sometimes result in a business chasing the score rather than driving their customer experience.

 

CES (Customer Effort Score)

CES is still far behind the two former metrics in terms of use and adoption.  At times, the question wording can feel clunky: “ease of doing business”, but this metric really works.  Think about the last time you downloaded a new app to your smart phone.  How many times do you trying getting the app working before you give up and delete it?  In this fast-paced, busy world, we want things fast and EASY!  And when it is easy, and it does what we expect, we comfortably form a new habit.  This is particularly evident at critical touch points in the customer journey – signing up / purchase, on-boarding, renewal / buy again.  I’ve agonised over the wording of the question, but consistent wording is enough to gather your score.  Furthermore, research backs up anecdotal evidence that CES is strongly linked to customer lifetime value and tenure.

Conclusion

So which of the three is the “metric that matters the most”?  For me, Moira Clarke, Professor of Strategic Marketing at Henley Business School eloquently sums up the best approach in her paper from 2013 (you can read it here.)  Each of the three core customer experience metrics measure something different, so smart businesses find a way to measure all three, using the score to drive different actions.

The most difficult challenge for modern business is to calculate the weighting of these three metrics, together with all other critical objective & subjective measures to combine into a single customer health score.  Unfortunately no-one has come up with a winning single formula for this yet, so each business needs to build their own.  And that, dear readers, would be the single metric that reflects how well you are delivering your customer experience!

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s