According to Aberdeen Group, companies with best-in-class Customer Experience Management (CEM) programs, “contribute an average of $273 million to their net revenue results…reduce customer turnover by 16.2% year-over-year on average, increase spend by existing customers and create new revenue streams through adding net-new accounts within the customer base.” – “The ROI of Best-in-Class CEM Programs,” Aberdeen Group
Some people still just don’t get it.
I am quite surprised that we continue to see posts on social forums regarding the validity of NPS methodology. When I read these posts, I often agree with their premises, but disagree with their conclusions.
While there are many assumptions regarding how to properly execute NPS, I’ll discuss the three myths I come across most frequently:
- NPS is not correlated with financial performance
- NPS is not an actionable methodology
- NPS should be measured on individual touch points/interactions
Let me begin by stating that we continue to see strong correlation between NPS and financial performance, in both B2B and B2C environments (check out: “The Seven Steps to Business Success” [Infographic]).
But this correlation is dependent on whether the organization measures NPS correctly and whether their score is reflective of the customer segments that matter. Many other blog posts discuss how to measure NPS properly, so I won’t go into that here. See also:
However, many organizations have gone NPS wacky. Would I really recommend calling a brand’s support center? No! I don’t want to call the support center! However, if I do, my experience at that support interaction WILL impact my loyalty and my willingness to continue to buy or recommend your product to my friends. If it’s a poor experience, I’m more vulnerable to competitive options; if it’s a good experience, then I may be more forgiving of other parts of the journey. Too many organizations measure NPS everywhere and hold employees accountable for a score they cannot control. Remember, loyalty/NPS is the sum of my brand experience, not specific to that point of interaction.
I also agree that NPS, on its own, is not actionable. NPS is a diagnostic. It only tells me how my customer feels about my brand at that point in their journey. Actions are informed by other data collected in the survey. That may be verbatim comments or structured questions. For example, in a call center interaction, I may ask about the “agent knowledge”. Using statistical techniques such as correlation, I may find this is a key driver of NPS. If my scores are low, I can then identify if it’s a particular agent, a specific product, or a lack of access to critical information that is creating the low score. That information then becomes actionable.
I have had a chance to debate these topics on several panels over the years and often walk away with another notch on my belt. What I try to explain to the audience is the power that NPS offers in mobilizing your organization. Everyone in the business can understand the value of creating Promoters, and reducing Detractors. When you empower employees with the insight of HOW they can do that, you build a customer-centric culture and reap the benefits of reduced cost to serve, improved retention and positive word of mouth. All of these things add up to improved profitability for your business.
I agree whole-heartedly with many of the criticisms of NPS methodology. It’s been used improperly and that detracts from its impact. But we’ve seen NPS drive tremendous benefits for organizations when done correctly. A properly designed and executed Net Promoter program WILL deliver results. As one customer put it, “It’s not hard, it’s just hard work”.
- NPS will link to improved profitability when done right
- NPS helps drive a customer centric culture
- NPS is actionable when combined in additional data as to “why”
Por Deb Eastman