Tackling Customer Satisfaction Measurements

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There are a multitude of metrics to gain customer feedback and analyse customers opinions about their purchasing experience. For instance, there is the Customer Satisfaction score, the Net Promoter Score, the Customer Effort Score and the Net Emotional Value (NEV) score. These scores help you analyse customer loyalty and measure progress with your brand and company. It is good to have a base understanding of a few different metrics in order to pick the best one for your business.

Customer Satisfaction

This metric is as straightforward as its title. It’s all about customer satisfaction. Therefore, it wants to know, how satisfied were customers with their recent product. It’s basic and easy to understand. However, this metric is not as useful as it could be, since it lacks predictive power. In actuality, satisfied customers might not respond that differently to dissatisfied customers.

Net Promoter Score

Back in 2003, Fred Reicheld wrote an article for the Harvard Business Review, entitled “The One Number You Need to Grow.” Reicheld was looking for a way to predict a company’s future growth and value. The premise of his thinking was that companies that were loved by their customers are more likely to grow. This is because customers would happily recommend them to people. In order to know if customers would recommend them, Reicheld derived the ultimate question. He used a zero to ten scale, asking how likely is it that you would recommend our product, service or brand to a friend or colleague. This numerical score was then followed up with an open ended question, asking what the primary reason is for your score.

The zero to ten scale gives a numerical measurement to the customer’s feelings and emotions associated with that purchase. The follow up question gives an insight into the customer’s main reason for that score. It allows the customer to present their own opinion.

The result of Reicheld’s scoring divided customers into three categories. Those customers, who scored 9 or 10, are considered promoters. This meant that the customer’s lives were enhanced by the purchase. This feeling led them to make future purchases, unsolicited referrals, and give wonderful feedback.

A little further down the scale is a group called passives. They scored 7 or 8 and they got what they wanted, but this meant they could also be persuaded to go to competitors. In addition, they did not give many onward referrals of the company.

The last group, from 0-6 is called distractors. In this group, these customers had a bad experience. These customers switch to competitors or become a nuisance. The overall percentage of promoters, minus the overall percentage of distractors yielded a real score of customer satisfaction and future growth potential.

This is called the Net Promoter Score or NPS. The NPS has proved to be an efficacious way to measure customer satisfaction on a global scale. Since is very transferrable, it can be used by an business or industry in the world. This means it can be used for comparison purposes as well across different businesses and is good option for assessing customer satisfaction.   

Customer Effort Score

The Customer Effort Score builds on the NPS by adding another question to gauge customer loyalty. They asked customers to use another scale, from 1-5, to state how much effort they had to personally put forth to handle their request. The scale had 1 ranked as very low effort and 5 ranked as very high efforts. The result yields a good measure of customer loyalty.

By understanding these scores it can help businesses shape the products, the produce and the services they provide. For example, if the metrics show that customers value quicker shipping, a company might look to optimise their inventory control. By having a swifter inventory control process, they may be able to get products out of the warehouse sooner and into the hands of their customers. With these metrics available, it encourages businesses to make changes to their operations, such as better inventory control and in turn it encourages progress.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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