Why attempting to link Net Promoter Score to cash hurts
In recent years the Net Promoter Score (NPS) has been adopted by many organisations without fully understanding its role and limitations. Many have felt pain, and for some it has really hurt.
Having one number that is intended to represent how well customers’ needs are being met sounds appealing to Senior Executives and many others. The obsession with metrics and benchmarking is understandably powerful in today’s world. We at Future Reference have a similar obsession around numbers, but take a more customised approach.
At a practical level, asking customers how likely they would be to recommend a company based on a particular interaction, often the case, is not in line with the way customers think. There is a lot more than that one interaction impacting that response, consciously or unconsciously. Consider somebody who has been a customer for a few years. Surely, the many other product, service, brand elements are at play.
At a strategic level, incorporating an additional metric into the business on the basis that this is closer to the time of the interaction causes more distraction and adds uncertainty on where to focus. Often, the business is not prepared or even structured in a way that can effectively deal with this. Aside from everything else, the extra amount of data can be overwhelming.
Invariably, there is already enough data available to inform priorities. There’s other survey data, there’s complaints data and social media listening can be administered if not already. Do you already make the most of all this, in terms of what’s conducted, communicated and implemented as a result?
Furthermore, when customers give feedback they want to know they’ve been listened to and something has been done to solve problems shared. If they experience the same issue again, the program defeats its reason for being. Not having an embedded process to follow-through can make a customers’ perception worse than it was originally.
At Future Reference, we don’t want to design and implement a feedback program and see our clients blinded by more data points. A broader longer term view needs to be adopted. Pinpointing what’s required comes out of in-depth discussions about the needs of the business.
Typically, initial questions may include
- What customer feedback mechanisms are already in place?
- Who will be focused on fixing problems identified; and how much time do they have for this?
- How will teams work together to improve on opportunity areas?
Balancing the important strategic questions from a business perspective alongside the collection of customer feedback will place us in great shape to design a customised solution with no false hope. A voice of the customer program can only be successful if we have the right internal dynamics to make it so.
At the heart of this, we need to link metrics to the commercials of the business, including number of customers it relates to and impact on short term and long term profitability.
Ultimately, there is no single bullet in the form of a NPS. There are alternative and better ways to achieve the desired outcomes, doing what’s best for the business and for customers.