It is widely observed that acquiring a new customer can cost up to five times more than retaining an existing customer. This makes it extremely important for the business to retain customers and build a loyal relationship with them, thereby reducing customer acquisition costs. While Customer Retention is normally less costly, it also builds customer loyalty toward the brand. Here the important question is how to keep the customers happy so that they stick with the brand? The answer lies in measuring their satisfaction levels constantly.
Measuring Customer Satisfaction
Here we explore two commonly used customer satisfaction metrics: CSAT and NPS
CSAT: Customer Satisfaction Score (CSAT) research is the most commonly used measurement for customer satisfaction. This is the widely used and industry-standard customer satisfaction metric, where your customer is asked to rate satisfaction with your business, product, or service on a scale typically ranging between 1 – 3, 1 – 5, or 1 – 10. This measurement is used to highlight problems or pain points (Satisfaction levels) and also to evaluate relationships with your customers (Loyalty Levels).
NPS: The Net Promoter Score methodology is based on asking customers a single question, based on a scale of 1-10 that predicts the likelihood of both repurchase and referral. This input from customers can measure customer experience and predicts business growth.
CSAT is considered to evaluate short-term customer happiness or loyalty and is useful for targeted, iterative improvements. NPS, on the other hand, is more likely a long-term indication of loyalty. Brands today also use other tools like social media monitoring, app/web-based chatbots, etc for measuring customer satisfaction. Customer satisfaction is very essential to retain your current customers and attract new ones. At Itqaan, our experts regularly conduct CSAT and NPS exercises to help our customers retain and grow their customer base.