home Customer Experience NPS and CSAT do not measure customer happiness

NPS and CSAT do not measure customer happiness

Customer happiness and customer retention are closely intertwined. NPS and CSAT are two of the most important CX metrics we use to assess what customers think about our organisations. Unfortunately, neither, on their own, allows brands to be truly objective in their understanding about customer happiness.

The difference between happiness and satisfaction

A dissatisfied customer is likely to feel frustrated or annoyed about an aspect of your service. Service delivery may have been a bit slow. Or a minor mistake was made. The incident may be quickly resolved and soon forgotten. They have no real emotional connection with the experience.

An unhappy customer, however, will not be easily placated.

Angry customers will let you and the rest of the world know their feelings. They will leave angry one star reviews on Google and Facebook. They will take any opportunity they can to complain about your business and explain why you are hopeless. Not only will you lose their business. You will lose the business from other potential customers.

From dissatisfaction to anger

Most dissatisfied customers can be handled with an apology and a commitment to rectify the mistake that was made. However, if the same problem, despite the apologies, keeps happening, the minor feelings of annoyance or frustration will deepen. Instead of extreme dissatisfaction, customers will start feeling betrayed by the business from promises constantly being broken.

Feelings of betrayal will turn to anger. Angry Customers will respond strongly and in many cases seek to punish the business.

The costs

The costs to a business from unhappy as well as dissatisfied customers can be enormous. Research shows a typical business hears from just 4 percent of its dissatisfied customers—and of those 96 percent who never voice complaints, 91 percent will never come back. According to research from Vision Critical businesses across the world are losing trillions of dollars due to dissatisfied and unhappy customers.

It’s not possible to keep every customer constantly happy and satisfied. Mistakes will happen. Miscommunications will happen. It’s how you handle those mistakes and how well you keep the promises you make to customers that will make them happy or make them feel betrayed. According to a study by Harris Interactive, 92 percent of consumers said they would be willing to go back to a company after a negative experience. Of those consumers:

  • 63 percent would return if they received a follow-up apology/correction from a person in charge.
  • 52 percent would return if they were offered a discount.
  • 49 percent would return if they were offered proof of enhanced customer service.

Happiness and satisfaction are hard to measure

It’s difficult for organisations to be completely objective about customer happiness. Most teams and executives face some temptation to inflate estimates of how pleased their customers are. A few years ago, Bain and Company produced a report which highlighted that 80% of firms surveyed believed that they delivered a “superior experience” to their customers. The problem was, according to the report, only 8% of their customers felt the same way.

Customers make the job more difficult. Rob Steffens highlights the following paradox:

  • Most people are more likely to take time out to share a bad experience than a good one.
  • However, if you directly ask them, many will bite their tongue about a bad experience.

Over the last two decades, NPS has become the go to customer metric for many organisations. NPS’s popularity is due to the fact that it is an easy question to ask as well as being a somewhat easy metric to analyse – how likely are you to recommend us?

The problem, however, is that it has huge limitations when assessing the sentiment and opinion of all your customers as it only assesses one customer interaction from a limited range of customers over a given period of time. And like CSAT and CES scores, NPS lacks the ability to fully identify the driving factor’s behind customers’ responses.

This is not say we should completely abandon CSAT, NPS or CES. But we shouldn’t rely on one metric or one mechanism for measuring customer happiness

Your own company data

Most companies store vast amounts of data which can be linked back to their customers, including information about every interaction and transaction they have ever had with a customer. Signals, contained within this data, can reveal an accurate picture of your customers and their sentiment towards the organisation.

This data can help identify the most dissatisfied and unhappy customers, who might be likely to churn and enable the business to proactively reach out to them.

Social media sentiment

People like to vent on social media. So while people can be fickle and appear over emotional, social media monitoring can provide some very powerful insights in how your customers are feeling. The truth may be brutal but at least you may be getting an honest assessment of what’s happening.

Libby Dale

Libby Dale, Co-founder, SmartMeasures. Libby is passionate about keeping customers happy through clever technology. She believes customer churn is something that can be avoided in a way that delivers both happy customers and improves the business bottom line.