The Net Promoter Score (NPS) has been the key metric for customer satisfaction since its introduction by Fred Reichenheld in 2003. Today the NPS concept is being challenged from many sides, but until the next big thing in customer satisfaction metrics appears, the best thing to do is to improve the way NPS currently operates. This includes applying a net promotor system, more diligence in collecting NPS data, combining NPS with other customer experience metrics and integrating NPS with Cost-to-Serve data to calculate Return on Experience.
The problems with NPS
Presently, four main issues surround NPS:
- The Representative Value of the NPS participants
- The Manipulation of NPS Inputs by bonus-challenged employees
- NPS Fatigue of clients
- The Lack of Actionability of NPS
1. The Representative Value of NPS participants is an interesting phenomenon that surfaces when one starts to analyze the profiles of participants in NPS surveys and the number of NPS inputs per client. Traditionally, happy clients – the company fan base – are over represented and more likely to participate in multiple NPS surveys. This helps achieve high NPS scores but is a fictitious representation of the true state of customer happiness with the experience levels you deliver.
2. The Manipulation of NPS Inputs is triggered by companies that link NPS to frontline staff bonus plans. This results in offering rewards and discounts to clients that give a positive rating, while withholding the NPS survey from people that did not get good service or had an adverse product experience. In some cases it results in pleading with clients to give a positive NPS in order to safeguard a job or support a family.
3. NPS Fatigue is the result of sending too many – often automated – NPS surveys to the same customer. The problem with NPS surveys, often mentioned by clients on the receiving end of feedback requests, is that they are perceived as automated, repetitive and meaningless .
4. The Lack of Actionability of NPS is related to the fact that for many companies NPS is a metric rather than a process. Reichenheld updated the NPS score to the Net Promotor System in 2011, when he coined the Ultimate Question 2.0 concept. Today’s VoC systems are powerful in systematically improving customer experience through programs that analyze customer feedback and use customer inputs to update interaction experiences, best practices and underlying processes. Nowadays, Inner-Loops, Huddles and Outer-Loops are essential parts of best performing NPS systems.
Combining NPS with other essential metrics to gain a better understanding of Customer Experience Dynamics
NPS tracks the likelihood of customers recommending you as a party to do business with. NPS is called a two-step survey because the first question requires a 0 to 10 score, and the second is to explain, in your own words, why you gave the score you did.
Analyzing the scores as a whole, analyzing scores on a customer level, mapping scores towards customer typologies and segments and looking at the representativeness of scores versus the total customer base delivers interesting insights.
Analyzing and clustering the scores help understand the reasons for customers’ positive and negative experiences. Semantic analysis allows to gain insight into the language and wording clients use.
But you may want insights into additional aspects of customer experience dynamics.
At KPMG, we systematically combine a number of additional metrics with NPS:
- Customer Effort Score or Net Easy Score
- Employee Satisfaction Score and Employee Stress Score
Combining these metrics allows for a much more granular insight into the overall customer experience context and also helps define quantified, balanced targets related to the customer experience.
The Customer Effort Score (CES) is a seven-point scale by which customers respond to a company’s question of how much effort they needed to do business with them today. A variant to the CES is the Net Easy Score that follows the same 1 to 7 rating but asks: “How easy was it to get the help you wanted today?”
Often digitization results in moving elements of customer engagement to the client. Forms and questionnaires need to be completed, profiles determined and information needs to be located on websites and portals. At a certain point the experience, first welcomed as empowerment and flexibility, becomes a chore and a burden, as indicated by changes in the CES.
Combining NPS with CES and Cost-to-Serve – how much money does it cost to deliver customer experience of a certain level – creates an interesting system of communicating vessels with a particular dynamic: the customer experience paradox.
Up to a certain level work can be handed off to the client, reducing cost-to-serve but still resulting in a higher NPS, because clients experience the possibility to access systems on a 24/7 basis as an improvement. At a specific point, though, too much work is passed on to the client and the empowerment is no longer perceived as a positive development but as an extra effort and a lack of service from the supplier or business partner, decreasing the NPS, and requiring additional spending – and a recalibration of the repartition of work between client and provider - to restore the NPS to its previous level. This issue is often successfully tackled by improving the user experience – UX – and the user interfaces – UI – of the digital interaction channels to reduce frustration with clients when handling administration and registration chores.
We often use the triangle NPS – CES – Cost-to-Serve to formulate Quantified Customer Experience Targets for validation by the Boards and Management teams to ensure clarity of the dynamics related to the customer experience.
By combining the Employee Net Promotor score – “How would you rate the experience delivered to the client on a 1 to 10 scale?” – with the Employee Stress Score – “How do you feel at the end of this shift about overall interactions with clients?” – the dimension of employee involvement is being added.
Employee Satisfaction is increasingly considered essential to delivering gratifying customer experiences. In the Loop of Doom stressed and demotivated employees disrespect clients, who in turn disrespect employees, leading to a downward spiral of unhappy clients and unhappy employees.
Happy employees deliver gratifying customer experiences and are therefore more respected, reinforcing motivation to deliver better client experiences.
Using embedded VoC and AI to make sense of customer feedback
A key method for using customer feedback is the application of A Target Operating Model Embedded Voice of The Customer Approach. In this way VoC is approached as an all-encompassing touchpoint process, taking into account Customer Feedback and Customer Interaction Signals.
The combination of both feedback and signals create a much more granular insight into real customer behavior and places input from NPS and other surveys into perspective.
The combination of customer interaction signals and semantic analysis of customer feedback adds another layer onto the technique of understanding what is really working with clients and what is hampering them from giving their full trust – and full spending – to your company.
A full understanding of customer interactions is a first step towards putting in place Intelligent Interaction engines, which assemble high quality, end-to-end customer experiences. This understanding is achieved by using customer data to fill-in the blanks in the customer journey and connect the dots to complete a multi-faceted portrait of the customer. With these data you can orchestrate intelligent marketing, sales and service interactions.
Would you like to know more about how KPMG can help you get more out of NPS, how to improve your customer insights and how to bring intelligent orchestration to your business? If so, please reach out to Patrick Maes or other members of the Customer, Sales, Marketing and Innovation Advisory Team at KPMG.
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Putting the customer at the center of your business. Future-proof your sales & marketing..