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Measuring Customer Satisfaction for e-commerce website


Go to solution Solved by Venugopal R,

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Q 73. Some of the commonly used measures of customer satisfaction are given below - 

 

  1. NPS (Net Promoter Score) - Loyalty and referral check. 
  2. C-SAT (Customer Satisfaction Index) - Satisfaction attained by the use of product/service. 
  3. Churn (Customer Churn Rate) -  Customer loss assessment.
  4. CAC (Customer Acquisition Cost) - CAC is all the costs spent on acquiring more customers (marketing expenses) divided by the number of customers acquired in the period the money was spent.
  5. CES (Customer Effort Score) - Customer effort assessment in getting work done. 

 

What will be your ranking for the five metrics (NPS, C-SAT, Churn, CAC, CES) as per order of importance for Performance of e-commerce website for electronic goods (only for the website) and why? 

 

Note for website visitors - Two questions are asked every week on this platform. One on Tuesday and the other on Friday.

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Below table gives the ranking for the five metrics (NPS, C-SAT, Churn, CAC, CES) as per order of importance for Performance of e-commerce website for electronic goods (only for the website)

 

Customer satisfaction Metrics choice

Rank

CES – Customer Effort Score

1

NPS – Net Promoter Score

2

C-SAT – Customer Satisfaction Index

3

Churn – Customer Loss Assessment

4

CAC - Customer Acquisition Cost

5

 

1.      CES – Customer Effort Score

When someone wants to navigate through an e-commerce website, all by themselves, the ease and user-friendliness of the website is most important. The main reason one is trying to purchase a product through the website is to save time, which otherwise should have been spend in hunting and negotiating for the right product by visiting numerous shops. The speed, clarity and details one could obtain with relative ease, during the interface makes the CES the most important score.

2.      NPS – Net Promoter Score

As a matter of fact, a higher CES score will motivate a customer to increase the loyalty and referral with regard to the site usage to other potential customers. This score not only supports repeat visits by already existing customers, but also attracting new customers. Hence NPS finds a second ranking.

3.      C-SAT - Customer satisfaction Index

This reflects the satisfaction of customers who have already used the site and will give an assessment of their repeated use, but unlike the NPS, we may not get the assessment about added referrals. Thus this is placed only next to NPS

4.      Churn – Customer Loss Assessment

While this will assess whether the ratio of no. of new customers to the no. of customers lost, we may not be able to assess the dissatisfaction drivers of the lost customers. Relying only of this metric could prove risky, since for want of the real drivers that influence this ratio, it could change drastically any time. It could be good idea if this metric is used along with any of the higher ranked metrics. Thus this attains the 4th rank.

5.      CAC – Customer Acquisition Cost

While this metric would influenced by the Customer satisfaction, there would be other factors that influence the Customer Acquisition cost. Hence may not be a good metric to assess the customer satisfaction on usage of the product, (website).

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  • CAC
  • NPS
  • Churn
  • CES
  • C-SAT

 

Considering the fact that SEO, SEM, adwords, are quite expensive or the ROI is moderate or low an e-commerce customer acquisition cost is always high.  Keeping the virtual store open and ensure the functionalities are always maintained is a cumbersome task.  Hence CAC.  Each and every customer is quite valuable and needs to be lured with NPS to keep the churning and attend to CES, while maintaining a high C-SAT

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According to my opinion the sequence for the five metrics will be as below:

 

1. Customer Churn rate - can be a useful parameter to see for a specific duration how many customers have stopped visiting the website and haven't done any transaction. A vital indicator to understand if there is a potential loss of customer.

 

2. Customer effort Score- Second important parameter to evaluate the user experience based on the feedback out come like once a user searches for a product

 

a. it shows similar products from different retailers with the economic price available

b. user can customize a product as per his/her desire

c. poor feedback rating automatically forces the seller to interact with the customer to understand the difficulties they face

d. easy return policy

 

all these above phases make thew users' journey smooth and easier to use the website

 

3. NPS - a useful parameter that truly reflects the overall customer experience in the journey of a product. We can have different sets of out comes here : Promoters, dis-tractors and Passive. For e.g. if due to special discount no of customers visiting the website is higher though they actually prefer a different website NPS can easily categorize that.

 

4.CSAT- a good parameter for decision making as higher the CSAT(%) users are more likely to use the website

 

5. Customer Acquisition Cost - will not be much helpful

 

 

 

 

 

 

5. CSAT- same as above

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In case of an objective to measure the customer satisfaction for the performance of an E-Commerce Website for Electronic Goods (Only for website)  , the obvious situation is that the browser/ customer has opted to visit the website to either purchase or only browse the site to understand options (Window shopping).

Here, the browser is definitely a person who is net savvy and a prefers the convenience of visiting a website from his current location. He has logged in to the site to either test the water or to make a purchase of a good which is a need for him. Hence in the quest to measure the customers overall satisfaction, following is the ranking I would suggest for the five metrics:

1)    CES- It is important to measure how the customer felt about the effort / ease for him to browse through the website. It will help the organisation to understand the effectiveness of the site’s UI. Also the platform can detect from which page the customer has quit the site if the visit was not a sales conversion- This also helps the organisation to estimate if there is any particular point from where majority of potential customers are quitting from the site.

2)    C- Sat- Though not as relevant as the CES , Customers experience during the site visit and the extent to what his expectations have been met will determine the Csat and his loyalty and how much he promotes the same CRT to others, hence I have reated it as second

3)    CAC- is important to understand the cost to acquire customers or entice customers to log in- Conversion to sales is the next level. This will help to determine the COB.

4)    NPS- This will help the organisation to assess whether the customer is a promoter or detractor so that the potential to get more visitors through referrals can be projected. However, In case the customer buys the goods, his loyalty will also be governed by the quality of the good that he has purchased.

5)    Churn- In this case, the churn of the customer is dependent on multiple factors other than the website experience,  like the price point, Variety & quality of goods hence  

 

Having said that , The most important point that we must remember here is to make good use of the measures  and learnings derived from them and implement

 

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According to me NPS and CES should be on the higher priority and Churn on a lower priority.

 

NPS and CES are about the experience on the website and are crucial. Churn not so important because it is Electronic Goods (not items of everyday use).   

 

CAC is highly dependent on product life cycle of e-commerce in the domain and may remain a high figure for a long time. So, I think it is hard to use it for customer satisfaction.   

 

Considering all the above, Venugopal's response is considered most appropriate. 

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