It pays to put NPS in context

Martin Green
General Manager, EMEA
ThoughtSpot
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Success or failure in business - and indeed customer experience - essentially boils down to one thing: consistently making the right tradeoffs. For many years conventional business wisdom was that if each department optimised its own cost and productivity, the result would be an optimal whole. We now know this to be deeply flawed. Today companies are working hard to dismantle operational silos and embed integrated, cross-functional business processes that optimise Customer Journeys. KPIs are still essential, but we know that they require orchestration, including those that are seemingly conflicting.

Dismantling silos in large enterprises, however, can feel like a game of Whack-a-Mole. You successfully manage to take a few out, only to have ten more pop up following a period of growth, restructuring or a company merger. It’s why large companies suffer from the most severe consequences of disjointed planning and consistently top the league tables for bad customer service, despite making heavy investments.

In the realm of customer experience, new ideas have emerged to align with new, cross-functional operational models. Having spent most of the last 20 years driving a focus on customer experience at some of the world’s largest companies, I’m keenly familiar with our industry’s most popular metric, NPS (Net Promoter Score). NPS has made a massive contribution to driving more focus on the customer experience. NPS gained popularity for providing a simple, digestible way of knowing where you stand, and of course, it's increasingly benchmarkable.

One evolution to NPS is Customer Effort Score (CES), a useful customer experience metric based on an alternative single question “How much effort did you personally have to put forth to handle your request?” Organisations can use CES to measure the ease and effectiveness of their customer journeys, and how likely they are to impact a customer’s  decision to repurchase or renew.

Customers who have recently called Microsoft or American Express’ help desks will have experienced a change in priority from being dealt with as fast as possible to ensuring their issue is solved in one transaction - regardless of how long it takes. This invariably creates a higher initial service cost, but organisations adopting this approach are seeing it pay off in the long run. In this case, seemingly conflicting KPIs aren’t actually working at cross-purposes.

However we’d be complacent to leave it there and say ‘job done’. NPS (or CES) provides only one data point. There’s a risk that focusing solely on these metrics leads to a new form of myopia that can leave businesses vulnerable. NPS becomes much more powerful when viewed in the context of and correlated to a broader set of metrics. These include volumes of customer transactions, quality control/compliance, operational efficiency, basic financial ratios, and other data that touches on the whole operation’s effectiveness.

How do we achieve this? By sharing and democratising data so that everyone in the business has fast, easy access to trustworthy data to help them make smart tradeoffs in their day-to-day work. There’s been endless talk about providing a 360 degree customer view, but this can’t just be for the top executives. Given the pace of business today, folks in operational roles, be that in head office or working directly with customers needs the tools to make these trade-offs.

When everybody shares the same customer view, businesses are emboldened to launch disruptive new services that may seem counterintuitive, but yield big payoffs. For example, we’re currently working with an organisation that has decided to put its customers in the driver’s seat, letting them view and query in real-time all their own billing information much more easily. In a more traditional, siloed operation, this type of customer access might have been unthinkable because it might let customers choose plans that are more economical. However this company has calculated that over the long term, the ability to retain customers who are willing to promote this innovative service to others creates considerably more value for the company than continuing with the old model.

So by all means, continue measuring NPS (or CES/similar metrics). Just remember that putting these ‘in perspective’ as part of a wider data-driven culture will deliver much greater payoffs.

About Martin Green

Martin Green

Passionate about software companies that have a transformative impact on the way business works. With ThoughtSpot, I am focused on how knowledge workers can be more effective by easy access to relevant business insights. Previously led all EMEA operations for Medallia, Satmetrix and Merced Systems.

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