NPS as a way of measuring customer experience has gained a strong following over the past few years. From boardrooms to executive lounges, people love the simple fact that it gives an overall score that seems to point to a business’s overall success. But how useful is NPS as a metric that drives action and improvement?
What to consider
Here’s some points to look out for when considering NPS as a metric for your customer experience programme:
- How many people actually know what their score means? For example, if you have a score of 30, what does that tell you? How will your organisation use that information to improve? A simple aggregate score doesn’t allow you to focus on what specific, actionable items need to be addressed to improve the customer experience.
- Doesn’t tell you why – Beware of measuring NPS and leaving it at that. While NPS can capture an overall trend in customer loyalty the results won’t tell you why that trend is happening. If it’s a great result, what caused it, if it’s not great how do you improve. Either way, you need to know why.
- Are you getting the full story – if you’re exclusively using NPS (and those that love it, really love it), think about incorporating other metrics beyond loyalty such as customer satisfaction, or perceived effort, or programmes that allow you to track problem resolution time. These will give you a full and broad picture of what’s going on with your customers and how you can get better.
- Subject to wild fluctuations – because of the way NPS scores are calculated results can vary wildly. This is particularly the case with small sample sizes that can sometimes cause alarming results. Don’t cause the business to go off track trying to explain large variances in NPS.
Beyond NPS or any other metric you might choose, the key question to ask is how will you use the feedback from your customers to actually improve. Only by answering this question will you be on the way to improving customer experience and creating happy, satisfied and loyal customers . In a data driven world where most businesses are struggling to turn insight into competitive advantage, this is one area where a well prepared and resourced, action-oriented organisation can have a massive impact.
That impact is something that some programmes are lacking and research by the Tempkin Group reports that companies themselves have identified the lack of taking action based on CX metrics as a top obstacle to their programmes. Plus, this obstacle has increased markedly in the past year. This indicates that while people are recording metrics and gaining insights more and more, they’re not well equipped to use them to drive business improvement across their organisations.
Before you even start your customer experience programme, ask yourselves as a business how will we use the insight gained to prompt action and drive improvements across teams. Not only will this allow you to be well prepared, it will also be a key determinant of what you ask and what metrics will best fit what you’re trying to achieve – as well as what changes as a result. If you already have a programme in place look at what has changed because of the programme and if it’s not driving change, look at how you can better use the action tools within the programme to improve.
This is one of the most important questions to answer when assessing a customer experience management programme. A perfect NPS score is great, but it’s the systematic improvement delivered by of small day to day actions that are most impactful.