Why NPS must be more than measurement and benchmarking to improve CX
Only by closing the loop on customer feedback can NPS be a positive driver for enhancing customer experience.
The critical thing with Net Promoter Score is not just to measure it, or to use it as an industry benchmark. It’s only by closing the loop – going back to the customer who has given the negative feedback and rectifying their issue – that it can actually act as a positive driver to improve the score.
Thousands of the world’s leading brands, from Apple, Microsoft, Facebook and HSBC, use the Net Promoter System (NPS) system. It’s a key Board metric that’s heralded across the marketing world for building customer loyalty and predicting growth. Bu is it enough just to use NPS?
The answer, of course, is no. When NPS is used as a tick-box exercise you just aren’t getting the benefits. At its base NPS is designed to give you a valuable metric, namely: ‘How likely is it that you would recommend [Organisation X/Product Y/Service Z] to a friend or colleague?” Sounds great? But you need to factor in two important things – how to get the responses and then, crucially, what to do with them.
Let’s start with getting responses. As Warren Buffett says, ‘feedback is a gift,’ but it’s not always a gift that customers want to part with – especially if you don’t do it on their terms.
That’s not to say that customers don’t want to share how they feel. Microsofts’s 2018 State of Global Customer Service Report gives a good insight into this. According to its survey, nearly all customers (90%) have a more favorable view of brands that give them the opportunity to provide feedback. However, less than a quarter (24%) of customers are given the opportunity to provide feedback regularly.
So why then do companies struggle with NPS response rates?
Put simply, many brands are doing NPS wrong. Net Promoter says companies should “ask the (NPS) question in a manner that provides reliable, timely, and actionable data”. But often, measuring NPS through outbound call centres and laborious web surveys, which of course means a low response rate. And the results can take weeks or months to come back to you, meaning it’s hard to follow up and with staff who made errors or customers who need problems solving.
A far better tactic is to integrate NPS at key touchpoints along the customer journey, such as post order or post support, when they are in the moment of engaging with your brand. It’s crucial to ask the question at the right time, otherwise you just risk annoying the recipient. Use common sense – is it really worth asking, "would you recommend internal IT support to a friend or colleague?” The employee has no choice but to use them anyway.
Also consider when NPS isn’t appropriate. Let’s not forget the major bank that asked customers: "Based on your experience of closing your account with us, how likely are you to recommend us to a friend?" No wonder it went viral and resulted in such negative PR.
Let’s not forget the major bank that asked customers, "based on your experience of closing your account with us, how likely are you to recommend us to a friend?"
It’s also important to make answering NPS customer-centric. Making them one-click makes it much more likely that a customer will respond and bear in mind that it must be maximised for mobile. This isn’t a nicety – its far more likely a customer will be responding via a smartphone device. Don’t just take my word for it – just look at the stats in Ofcom’s report ‘a decade of digital dependency’ – the average Brit is checking their smartphone every 12 minutes and spending 2 hours 28 minutes on it every day.
Closing the loop
Once you have nailed getting the data, you need to ‘close the loop.’
In fact, it is often detrimental to the customer experience if a customer takes the time to complete an NPS survey, and the company who has sent it doesn’t bother to respond. On the other hand, going back to the customer who has given the negative feedback and rectifying their issue can actually act as a positive driver to improve the score.
The NPS can also identify customers who feel neutral – and it’s this customer segment that offers the most potential for business growth. This is illustrated is a model developed by Forrester that researched the financial value of customer. It suggests that the happiest people in the industry tend to spend more.
The data from the model suggests that moving a customer from a satisfaction level of 4 to 7 generates more additional spending than moving from a level of 1 to 4. So, if you elevate the positives, you earn nine times more revenue than if you eliminate the negatives.
The thought is for businesses to focus efforts to channelise energy to nudge the neutrals (satisfaction levels 4-6) to positives (level 7 and above), rather than invest in moving the unhappy customers (satisfaction level 1-3) to neutral.
When using the NPS effectively it can also have a big knock-on effect on staff satisfaction.
Where the score is positive, or improves, companies who regularly reward and celebrate the staff and teams who have generated those scores can see a positive improvement in staff morale.
NPS is far more than a benchmark to be measured. Used right, by being smart, maximising responses and closing the loop, businesses can get so much more out of this powerful tool – across customer satisfaction, retention and growth.