Net Promoter System (NPS) for measuring customer experience is no longer serving your brand
The customer experience (CX) world is fundamentally changing. Customers are savvier, more demanding, and expect personalization and prompt attention. Because they’re exposed to a broader range of products and services from a variety of businesses, they have every opportunity to shop around. But businesses can survive and thrive in this environment by listening to customers, understanding their experience and responding quickly to concerns.
Since 2003, businesses have relied on a methodology to do this, created by Fred Reicheld, Bain & Company and Satmetrix. It’s called the Net Promoter System (NPS). NPS was designed to enable businesses to predict and measure the loyalty of their customer base as well as future business success (revenue growth). Their hypothesis makes sense: Happy customers are loyal, they buy more from you over time and they advocate on your behalf to others. The metric is wildly popular and is used by approximately two-thirds of the Fortune 1000.
But successful execution on traditional NPS programs remains elusive. All of the right investments in time, resources, technology and political capital have been made, yet the customer is not responding with greater investment, and new business hasn’t materialized from customers’ willingness to recommend.
Here, we identify the top reasons why NPS is not the key to your CX strategy succeeding in the 21st century:
1. The world moves at a faster pace than NPS. Developed in 2003, NPS is based on the design of a simple, structured survey that delivers structured feedback. There was little to no unstructured data, or, as I like to call it, “data in the wild” in 2003, as online reviews and social media were not fully baked. Today, we are in the middle of a brand reputation revolution: Unstructured feedback exceeds that of structured and is continuing to grow, thereby widening the gap.
2. You don’t really know how to do it. The fact is, not that many people have used NPS (successfully) across an entire enterprise. Yes, two-thirds of the Fortune 1000 may use NPS, but if they were all using it in a way that was consistent with the way it was intended to be used, wouldn’t they all see continual revenue growth? When you pull back the covers, what you will find is that many use it at a departmental level or in a “one-off” fashion.
3. You can’t see that there can and should be changes made to your products. Not only are you already “comfortable,” with the products that you make or deliver, but a ton of work and good intentions went into making your products and processes what they are today. That doesn’t mean that your customers love them or will be loyal to them. How many times do you need to hear that “change is good” before you finally take it to heart? Let the data battles begin!
4. You’re gaming with NPS instead of using it to improve customer experience. Change your mindset. NPS is about the journey of taking action on what your customers are saying, not chasing a metric. Too often people chase the metric and do what they think they need to do (for example, change survey questions) to get a better score without really focusing on finding and fixing the root cause.
5. You don’t have clean data, or it’s incomplete. Very few companies have “clean” data. Whether a result of data entry during lead generation, data entry during customer setup or data entry during a support interaction, most have data cleanliness issues. The problem with lack of clean data in a system that requires structured data is that it creates inaccuracy in your data set, which leads to inaccurate results. Also, your data may be incomplete. You may send your survey to your day-to-day contact, but don’t you also want the decision-maker’s input? What about the key influencers? How are you ensuring that your survey is going to the right person at the right time?
6. Your intentions are good. There’s a big difference between intending to be customer-centric and actually being customer-centric. How often is your customer represented in internal staff meetings? How often do you talk to customers outside of dealing with an issue or responding to a survey? Go back through your product roadmap, company policy and departmental process and identify the amount of change that was deployed based on actual customer verbatims.
7. You would rather be right than win. We all have heard, “Our team specifically designed the installation process of this product release to be customer-friendly! We made it push-button simple.” Or, “we specifically put this feature in our vehicle to make it driver-friendly.” If you want to win, focus on taking action based on what customers say. Your underfunded CX efforts weaken customer-driven decisions.
8. You have actionable data but you don’t know how to assemble it. If the holy grail of the CX world is “tell me what to do,” then actionable data is the penultimate step. Here’s the problem: Often, the data is right there for you to see, but taking it and putting it into an actionable format is simply not a skill set that many people have. It’s one of those things that sounds easy until you actually try to do it.
9. You brought a Ferrari to a bicycle race. You spent countless hours and money bringing in consultants and professional services to build the perfect CX implementation. Your survey gets you answers to every question you think you will take action on and for every department that will use it. You have governance meetings and inner and outer loops and tiger teams. Maybe you do need hot-spots and heat maps and conjoint analysis. Or maybe what you really needed was a simple survey and the ability to combine that with all of the insightful data from the wild to take meaningful action — at a fraction of the cost.
10. Your company culture is not customer-centric. You want to do it. You’ve learned all about it. You’ve made the pitch internally. Some people liked it, some people were less enthusiastic. Someone told you to go ahead, so you did, and you’re working hard at it. You’re taking your findings to others and sometimes people listen, and sometimes they don’t. It’s not your fault. Your company culture just isn’t customer-centric in everything they do.
11. Your executive team doesn’t really understand it. Even if your executives support improving CX and award bonuses for their work in this area, they may never take the time to fully understand what it takes to actually make CX a high priority.
You’re probably wondering, “If NPS doesn’t help improve CX, what does?” Here’s where brands need to think outside the NPS playbook, figure out what, exactly, they want to accomplish and then what solution or process will get them there. Following are three best practices to consider to get you started.
– Online customer feedback and offline survey data are equally important. Ensure your company is regularly monitoring its reputation online, and proactively elicit customer feedback with surveys.
– The best way to turn customers into brand advocates is by responding to online customer feedback in real or near-real-time. Make sure you respond to both positive and negative reviews. This shows your customers that you’re committed to improving their experience. When they see that you care, they’ll become loyal customers.
– Deliver a consistent brand experience across your multiple locations. Customer feedback about stores centers around such things as cleanliness, sales courtesy and parking. Acknowledging this feedback and applying it to all your locations in a timely fashion can vastly improve the customer experience.
In a time when CX is the deciding factor in competitive markets, businesses must gather customer sentiment, analyze it and act promptly to foster loyal customer relationships. So, instead of trying to fit a square peg into a round hole with NPS, organizations must modernize their customer experiences by embracing ways to manage their online (and offline) reputations.