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Vishwadeep Khatri

Measures of Customer Satisfaction for after sale service

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Q 75. 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/ issues resolved. 

 

What will be your ranking for the five metrics (NPS, C-SAT, Churn, CAC, CES) as per order of importance for Performance of After Sales On-Site Service for electronic goods 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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The measures can be ranked in the following order in this case:

CES, C-SAT, NPS, Churn, CAC. 

 

The customer who is in possession of an electronic product, looking for an after sales service will do so in  case an issue occurs in the product, so the first thing he would be concerned with is the efforts required to get that issue resolved. If it is easier for him to get that issue resolved, he is more likely to be loyal in the long run towards the brand and product range in that brand. Hence CES should be the first measure. 

The second concern is how is that issue solved and whether it is solved in accordance with customers expectation. Hence C-SAT is the next measure.

If a customer feels that it is easy for him to resolve issues and that his issues are resolved up to his expectations he is more likely to be loyal to the brand and its offerings and hence NPS and Churn (In case the customer is not satisfied) comes. CAC , I feel has limited significance in this case and hence have ranked it last.

 

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Performance of After Sales On-Site Service for electronic goods

 

1)      CES 2) C-SAT 3) NPS 4) Churn 5) CAC

CES is the most important factor for any after sales service as the customer needs a resolution and details from the seller as to how this product would be serviced. The easier it is, the better for the customer. This would be the number 1 factor in assessing performance. For example, the seller sending a personnel to customers premises or arranging a reverse logistics for shipping back would be great performance levels. The C-SAT attained would be the 2nd most important thing since requirement of service is an additional burden on the customer to use that product further. Any feedback from the customer on any web portal or by any other means is something which can be placed as 3rd most important factor which leads to NPS which I would rate as 3. Though new customers from NPS is not a sign of great product but a sign of great after sales service. Number of customers not coming back with any feedback or further query is a matter of concern as the customer would have been quiet in 2 cases where he had shifted to someother brand product or even if hes happy with the product. Since we are not sure of this feedback unless provided by customer, the ones without a further complaint might be treated as Churn. As marketing expense has not much really to do with acquiring customers through better after sales service, I would place this at the end.

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There is something very different about after-sale service in that, if the sale had been good in terms of both the product and information, there would not have been a need for the customer to come to the outlet again and create a need for an after-sale service in the first place.

 

Thus as there has been some source of dissatisfaction due to which the customer has approached the after-sale service point, measuring KPI No. 2, C-SAT may not be the best option and so this would be a natural fifth choice.

 

By the same logic, even expecting references from a customer forced to use after-sale service would be futile and hence, KPI No. 1, NPS would rate fourth.

 

Equally certainly, as customers for after-sale service are not preferred at all, KPI No. 4 CAC, would end up as third.

 

Retaining a dissatisfied customer would be a real challenge and as by default, customers who come to after-sale service can be expected to be dissatisfied, KPI No. 3, Churn would become more relevant at No. 2.

 

On the contrary, in trying to make the best of a bad situation, if we could reduce the pain felt by the customer by minimizing the effort and running around, the customer needs to make, to get the problem corrected and get the issues resolved, it may actually turn the situation around. Therefore, KPI No. 5, CES would rank as the most suitable measure of Customer Satisfaction.

 

My final preferred KPIs in the descending order of relevance would be CES, Churn, CAC, NPS and C-SAT.

 

 

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In case of an objective to measure the customer satisfaction for the performance after sales in an Onsite Service for Electronic goods, the obvious situation is that the customer has already purchased the product and has visited the site for after sales service.

Here, either the customer has experienced a defect in the good or probably needed to understand better, the working of the electronic good that he has purchased. 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 it took for him to interact with the customer service /support team. The customer’s experience here will determine the notion or image he carries back with him. I remember having gone to the One Plus service center because my new phone had a bug. I was very much upset with the issue in the phone- but I think the service that was provided to me at the service center and the way the team explained the issue and provided the solution, took all my grievance away.

2)    C- Sat- The next objective would be to understand the satisfaction of the customer on the good and the service provided to him as it will help the organisation to understand the opportunities / corrections that are required to keep the customer’s loyalty and also define measures to create similar satisfaction levels as a process.

3)    NPS- This will help the organisation to understand whether the customer is a promoter or detractor and thus understand whether the service provided was apt for the situation.

4)    Churn- In this case, the churn of the customer will happen only after a period of time as the solution is provided for immediate purpose – However it will be good to keep in touch with the customer through engagement programmes to ascertain whether the customer has churned out.

5)    CAC- This is the last as the customer is already acquired and the  cost of acquisition is already borne- The focus now should be on the cost of staying in touch with him through effective execution of AMC and other engagement programs and retaining him as a loyal customer for another purchase.

 

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 improvements in the process to ensure immediate customer satisfaction, future loyalty and referrals.

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  • CES
  • C-SAT/Churn / NPS
  • CAC

 

This directly begins with Post-sales and the job involves on-site services specially after sales, there is no CAC involved here. 

Keeping the CES high is of utmost importance leading to C-SAT.  A satisfied customer further churns in additional requirement or additional sales.   NPS serves as a reward for the additional sales to the customer which in turn has an effect on the C-SAT.

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Looking at all the five metrics , following are recommended priority.

1.    NPS : Net promoter score gives you detailed service and can be analyzed further statistically in broader margin over time span.  It can also indicate the market impact and mouth publicity that is going to affect future product sale. The further analysis can indicate the impact of various initiative taken and can be compared over last period in detail format.

2.    CES : This indicate comparison over Satisfied over unsatisfied customer. The indicative figure shows the comparison over unsatisfied hence an verdict can be derived for any specific initiative to improve customer satisfaction.

3.    C-SAT : This indicate Ratio of Happy customer our total number of customer. The result will be indicate only happy customer however difficult to identify unhappy & no response feedback.

4.    Churn : Customer loss assessment is indication of if customers are considering while purchasing a product and accepting over time frame. This does not quantify satisfaction class of customer.

5.    CAC : Customer acquisition cost indicate the financial aspect of potential customer to customer. It is more of sales indication and cost incurred for it and does not include the customer voice in absolute terms.

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Ranking for the five metrics as per order of importance for Performance of After Sales On-
Site Service for electronic goods are:
1. NPS (Net Promoter Score) - Loyalty and referral check. 
2. CES (Customer Effort Score) - Customer effort assessment in getting work done/ issues
resolved. . 
3. C-SAT (Customer Satisfaction Index) - Satisfaction attained by the use of product/service
4. Churn (Customer Churn Rate) – Customer loss assessment.
5. 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.


The first three offers great insight into Customer Experience and loyalty and when all
these 3 metrics are used together one would get the most actionable feedback.


Churn enables the organizations to identify strategies of customer retention for
improvement on customer base whereas CAC (Customer Acquisition Cost) is the cost
that the business must allocate in order to acquire a customer.

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

 

 

1. CSAT- Most important parameter for decision making as higher the CSAT(%) users are more likely to use the website

  

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. Customer Churn rate - can be a useful parameter to see for a specific duration how many existing customers have stopped visiting the website and haven't done any transaction in last 3/6/9 month. A vital indicator to understand if there is a potential loss of customer.

 

5. Customer Acquisition Cost - will not be much helpful

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My order will be 

1. NPS

2. Churn

3. C-SAT

4. CES

5. CAC

 

1 .NPS.

    Pros:- a. simple, b. customer centric, c. action oriented d. responsive, e. provides accurate customer scenario, f. loyalty [as it is long term]

  Cons:- a Customer might give fake suggestion, b. have to find out actionable issues  c. promoter may not implement

 

2. Churn:- 

Pros:-its directly proportionate with unhappy customer. They are either getting better option or fade up with current experience.

Cons:- its hard to find out the real reason or sometime to meet customer expectations.

 

3. C-SAT:-

Pros:- a. its short term so we gets specific data on certain scenario. b. as it is generally on specific issue it is also became easier for customer to interact with.

Cons:- a. As it is generally with specific issue - it varies customer to customer and it is very much subjective., b. people are generally harsh, as they are affected with some issues. c. its generally yes or no type answer we get. d. even if the customer is happy that does nto mean customer will come back again.

 

4.CES:- 

Pros:- almost same as CSAT

Cons:- a. Industry specific, b. required effort is very high to find out a specific thing, c. limited to service

 

5.CAC:-

Proc:- a. new customers - fresh ideas and feedback, 

Cons:- a. new customer so generally not deep researched data which may not be real,

 

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As CSAT, NPS, CAC, CES & Churn - All were from the point of view of the specific service (after sales - repair or replacement), CES comes up at the top and CAC is at the bottom. Based on the simplicity of answer, clarity of description and logical explanation, Anshu Goel's answer is selected as the best. Other notable responses are from Mohan PB, Rajesh Chakrabarty and Krishnamurthy Rao. 

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