Most failing CX programmes use NPS as a metric... but NPS isn't the problemby
Research has shown a negative correlation between organisational CX success and the use of Net Promoter Score. So what's going on and what does this tell us about how to choose the best CX metric?
We CX folks love to discuss measurement. If you want to fill a room at a conference, just put the word “metric” in your session title, and you’re good to go. Mention “Net Promoter Score” or “Customer Effort Score,” and you’ll need to order more chairs. That’s because we spend so many of our waking hours – and for some, sleepless nights – trying to figure out how to measure CX impact.
The role of measurement in CX success was one of the most evident takeaways from our hundreds of hours of interviews with CX leaders.
In our interviews, we discovered a slightly negative correlation between organisational CX success and the use of Net Promoter Score (NPS). While both successful and unsuccessful programmes used NPS, the programmes we encountered that were not making an impact almost always used NPS.
NPS doesn’t cause poor outcomes
Those you can chalk up to the companies’ lack of a strategic approach to customer experience. More likely than not, they were using NPS because they felt that they “should.” And they felt they should because everyone else seems to be using it. (Who said peer pressure peaks in high school?)
Those unsuccessful programmes didn’t bother to question whether NPS was the right metric to measure their unique customer experience. This lack of a disciplined approach led to both the use of NPS and the resulting lack of impact while those programmes tried to figure out how to measure CX.
Conversely, organisations committed to winning on customer experience (we call them Change Makers) take the time to assess what specific combination of metrics best reflects their delivered customer experience. As a result, they measure more effectively, rally their teams more effectively, and redesign experiences more effectively.
In doing so, they create more empathy, which only accelerates their impact. In other words, figuring out how to measure CX within your organisation can set in motion a cycle of continual improvement and growth.
So, how do you determine the right metrics to use?
Unfortunately, switching from NPS to Customer Effort Score (CES) won’t help. Almost none of the CX leaders we interviewed used CES as a relationship metric. And that’s appropriate.
CES was designed to be a transactional metric. The founders at CEB never intended for it to be used to measure a relationship. Yet, the excitement around effortless experiences leads many programmes to try to force CES into that role.
Instead, success requires setting out on your own to discover what metrics matter most for your customers and your customer experience. You won’t find the answer in the Harvard Business Review; you’ll find it by working with your own customers.
Luckily you’re not the first one attempting this, so there are some reasonably well-trod paths you can take. (Though they are constantly evolving as new technologies and methods gain traction.) The first step is to understand your customers, including their feelings, thoughts, needs, goals, challenges, and Moments of Truth (those critical interactions with a disproportionate impact on their overall journey view).
Mapping your customer journey will provide those insights and allow you to create a visualisation of your current-state experience from your customers’ perspective. The next step in identifying how to measure CX within your organisation is to determine your journey health score.
To do this, you’ll combine your customer insights with behavioral, operational, and financial data to create a measurement framework that ties to phases and touchpoints in the journey. This helps reveal correlations between financial outcomes and the points where you’re delighting customers (or falling short).
Customer case studies
At Heart of the Customer, we look at our clients’ most successful customers. We identify what is true about them that is untrue about those with less loyalty. That might be measured through the likelihood to recommend or ease of doing business (the relationship alternative to CES). Or, as we learned with one manufacturer we worked with, it could be confidence in the brand or a combination of effectiveness, ease, and emotion. That’s what many of our Change Makers used.
However, one client in the financial services industry found that the likelihood question introduced noise. The scores were atrocious when they asked their customers how likely they were to recommend that company. But looking at the comments, it was easy to see why. Customers said they don’t recommend annuity companies to their friends!
So, for this company, NPS was a non-starter.
A bank that looked at this discovered that likelihood to recommend had almost no correlation with actual recommendations. For their customers, “simplicity” was a better predictor of loyalty.
Great CX programmes create healthier businesses. They can prove that investing in CX pays off in customers who buy more, stay longer, are less expensive to serve and recommend you to their friends. As a result, they have an easier time building on and perpetuating their success. They design experiences that tie to measurable outcomes and use that data to grab the c-suite’s attention and support.
You can’t rely on cookie-cutter solutions to determine what matters most to your customers in their relationship with your brand (and how to measure against it).
There’s another lesson, too: it’s worth the effort to find out what matters (and how to measure against it).
This article was adapted from a post that originally appeared on the Heart of the Customer blog.
Jim Tincher, CCXP, is a nationally recognized customer experience expert, journey mapper, author, speaker, and entrepreneur.
Heart of the Customer, the cutting-edge CX consultancy he founded, empowers companies to achieve sustainable growth, reduce costs, and increase revenue by driving customer-focused change, improving customer loyalty...