In the past decade, there are four Customer Satisfaction methodologies that have become popular, and are now considered the primary methods for reporting on customer satisfaction as well as assessing levels of customer loyalty:
Net Promoter Score NPS
The Net Promoter Score (NPS) was developed by Frederick Reichheld in 2003. The measure is derived from a single question, “How likely are you to recommend our company/product/service to your friends and colleagues?”
Although the measure has come under some strong criticism by academics and research professionals, it’s still a very popular metric with business executives, and we therefore would recommend that the measure be included as part of any customer experience measurement programme.
Customer Effort Score (CES)
Introduced in 2010, when the Customer Contact Council (part of the Corporate Executive Board) published an article entitled “Stop Delighting Your Customers” in the Harvard Business Review; the Customer Effort Score (CES) has become an increasingly popular measure of customer experience.
Whilst it cannot directly be considered a measure of customer satisfaction, the CCC claim there is a strong correlation between customer effort and customer loyalty. Like NPS, the measure is calculated by answering a single question, “How much effort did you personally have to expend to have your request resolved?”
American Customer Satisfaction Index (ACSI)
The University of Michigan introduced the American Customer Satisfaction Index (ACSI) in 1994. It’s used primarily as an economic indicator that measures the satisfaction of consumers across the US economy.
In recent years, the model has also been adopted in commercial circles and is now used by many companies to track their own customer satisfaction levels. The ACSI model is calculated by asking respondents three questions:
1. What is your overall satisfaction with our product/service?
2. To what extent has our product/service met your expectations?
3. How well did our product/service compare with what you’d consider the ideal offering?
Customer Satisfaction (CSAT)
The final common satisfaction measure, CSAT, is calculated by asking a simple question, “How would you rate your overall satisfaction with our product/service?”. This measure has however become increasingly less popular than the other options described above.
Whilst the Customer Satisfaction metrics previously described are great indicators of overall customer satisfaction and can be used to predictively model customer loyalty, they cannot describe what exact aspects of the customer experience resulted in their values.
These metrics are, in essence an outcome of either a positive or negative customer experience. For example, if a customer has a very positive customer experience, one could assume they would have a high likelihood to recommend a company. Similarly, if a customer has a negative experience, one would expect their likelihood to recommend the company would be low.
In experience terms, customer satisfaction is only one of many emotive outcomes that a company may want to achieve, and for some companies, this outcome may even be less important than other outcomes.
The Right Customer Outcome
Whilst “Customer Satisfaction” may be a good descriptor for the desired customer outcome of a bank, businesses like theme parks or health spas may prefer to track aspects like “Customer Excitement” and “Customer Relaxation” respectively, as these are outcomes they really want to achieve.
From research they know that these are better indicators of the emotive outcomes of their respective customers, and are aligned with the experience they are trying to achieve. These are the real drivers of customer re-purchase rates.
It is therefore important to recognise that emotive outcomes like customer satisfaction are just one of many emotive outcomes, and that in determining customer experience metrics, it is important to first define what key customer outcomes are most important to a company.
In addition, if Customer Satisfaction is the result of a positive experience, one must ask the question “What defines a positive experience?”