CSat, NPS Or Both: A Critical Analysis

CSat and NPS, while both valuable in measuring customer satisfaction, offer distinct approaches and insights tailored to different stages of the buyer's journey. The choice between them hinges on business objectives and contextual requirements, recognising their unique perspectives.

On one hand, Ron Shevlin's Forbes article raises concerns about NPS's efficacy, citing that NPS measure intention and not behavior and how this is a disconnect specifically in the banking sector. (https://www.forbes.com/sites/ronshevlin/2019/05/21/its-time-to-retire-the-net-promoter-score/?sh=45bcf5216bbb ) Conversely, while CSat yields valuable short-term insights, it's not universally embraced.

The crux lies in making decisions based on industry, individual organisational needs and understanding what kind of feedback we are looking at which will help shape the path forward. While NPS is typically favored in B2C settings, its adoption in fintech, particularly in B2B formats, appears limited. Conversely, CSat's nuanced understanding aligns well with an industry navigating evolving customer expectations.

Take the example of Fintech, a rapidly growing industry. This sector is still finding its footing in the ecosystem. While it thrives on innovation, there's a limit to how much ground can be broken. As pioneers tackle new challenges, competitors catch up quickly, making it essential to lead the industry. Achieving loyalty and satisfaction in this dynamic sector is both vital and challenging. In a market where products are increasingly similar, taking a proactive approach to managing customer satisfaction is crucial. Retention depends on how swiftly one can address gaps in meeting customer needs and resolving dissatisfaction. To navigate this landscape effectively, leveraging the right CX tools is invaluable. The sector needs a tool that not only provides a statistically driven north star value to chase but also provides a clear direction to aim for but also identifies precise areas requiring attention, underlining the importance of prioritising customers.

The choice of tools and methodologies adopted or evolved by the fintech sector will shape its evolution and success. The crux lies in discerning what aligns with the specific needs of your organisation.?

Of the two tools in consideration, the Customer Satisfaction (CSat) score serves as a quantifiable measure of customer satisfaction with a product or service, typically rated on a numerical scale. Calculated by aggregating positive responses, dividing by total responses, and multiplying by 100, it provides the percentage of satisfied customers. Its survey-friendly nature allows deployment across various touchpoints in the customer journey, aiding in pinpointing potential issues and enhancing the overall experience. While industry benchmarks suggest a favourable range of 75% to 85%, achieving near-perfect scores is challenging. Although specific CSat scores for the fintech sector are unavailable, benchmarks from the American Customer Satisfaction Index (ACSI) position banks and financial advisors at 78 and 77, respectively.?

Emphasising past utilization of this tool in the sector, signifying a track record of both indicative actions and tangible achievements.?

The NPS tool on the other hand measures the likelihood of customers recommending a product or service, categorizing respondents as Promoters, Passives, or Detractors. A positive NPS, typically above 50, indicates excellence. NPS is crucial for small businesses, where word of mouth is key for customer acquisition. Research shows that a high NPS correlates with increased customer retention and decreased marketing costs. However, the Net Promoter System, aimed at understanding the reasons behind scores, is often overlooked, leaving the NPS survey incomplete. It was introduced by Bain & Company to foster customer loyalty and inspire employees.?

Acknowledging that amidst a sector grappling with defining customer needs, expectations, and desires, this tool may not singularly address all challenges.

Let's explore few more details and difference between the two before coming to some conclusion:?

Considering factors like granularity, ease of application, usage and impact the inclination for CSat looks like increasing. Again circeling it back to the ecosystem of fintech which is still at the exploratory stage. But on the other hand NPS comes with its own advantages and insights. So what about using both.?

While understanding the distinct purposes of each metric, and being convinced of their ability to address different aspects, the idea of utilising both CSat and NPS is plausible. However, there can be potential challenges associated with adopting this dual approach:

1. Actionability: Combining metrics may complicate prioritization and issue resolution, as distinguishing factors impacting satisfaction from those influencing willingness to recommend becomes challenging.
2. Meaning Making Difficulty: The amalgamation of CSat and NPS could lead to challenges in deriving meaningful insights, as the differing nature of the metrics may result in mixed or contradictory interpretations.
3. Different Output Formats: CSat, typically expressed as a percentage, and NPS, represented as a numeric value with a range, create dissimilarities that make direct comparison challenging.
4. Benchmarking Challenges: CSat and NPS are often benchmarked against different industries and competitors, making it harder to compare performance against relevant benchmarks when combined.
5. Loss of Focus: Including both CSat and NPS questions in a survey risks diluting focus, potentially missing specific insights that could have been gained from a more targeted survey approach.

In conclusion, integrating CSat and NPS offers potential advantages but introduces complexities requiring careful consideration. Balancing metric integration with a customer experience perspective is essential for informed decisions aligned with industry demands. As the fintech sector evolves, managing customer satisfaction remains pivotal. This strategy might involve starting with CSat to identify customer issues and integrating them into the roadmap. Over time, transitioning to NPS for long-term planning becomes feasible. Moreover, considering other CX tools like CES can further enhance the evaluation process, ensuring a holistic product experience.