Wouldn’t it be wonderful if a majority of your customer-related issues could be tackled with only one question? Wouldn’t you like it if you could identify customer issues with a simple question?
In his article titled, “The one number you need to grow,” Frederick F Reichheld introduced us to that question. For people familiar with the customer experience setting, they will recognize this article as the one in which Net Promoter Score (NPS) was introduced.
On a scale of 0 to 10, with 10 being highest, what’s the likelihood that you would recommend our company to a friend or a colleague?
This is the basic structure of the fundamental NPS question put forth by Frederick Reichheld in collaboration with Bain & Company way back in 2003. While being immensely popular in the past decades, NPS has its fair share of critics too. This debate has been on since its inception, and still, no solution has been found. The only definitive fact is that major brands and organizations trust NPS in spite of the debate.
Before we begin discussing the effectiveness of NPS, let us understand what it is and how it is calculated. Scored on a scale of 0-10, the NPS score falls in three main categories:
1. Loyal – these are customers who rate you 9 or 10.
2. Passives – these are customers who rate you 7 or 8, you can’t be sure whether these customers are leaning towards you or away from you.
3. Detractors – the ones who rate you between 0-6.
Your Net Promoter Score is the difference between the percentage of loyals (9-10) and detractors (0-6).
Although I’m just a bystander in this debate on whether NPS is good or bad, I have witnessed NPS being extensively used as a metric to drive change in organizations. It could be argued that it has also led to the fall of companies, but then we have seen that with over-reliance on other metrics too. Taking that into consideration here’s why I think adopting NPS is worthwhile:
Personalize Customer Relationships
The broad classifications of the NPS system allow you to identify promoters and detractors. The trick to using this classification effectively is to understand that your promoters and detractors are not two sides of the same coin. What endears one customer is not the thing chasing away another. Companies tend to focus so much on the detractors to such an extent that they forget all about their promoters. While useful for fixing problems, it does nothing to improve your image. By dealing only with detractors you end up making all your discussions about fixing bugs and apologizing for issues. Dealing with promoters separately opens channels for uplifting discussions.
NPS is for Relationships
Although NPS is associated with mainly with transactions, its primary objective should be the relationships between consumers and producers. Throwing an NPS survey at a customer right after an interaction is not the right thing to do. Their rating could be a reflection of their most recent transaction rather than their overall experience with you. Don’t rush to ask your customer what they rate you. Use the NPS question at the right time and for the right reason.
A Common Language for Identification
NPS gives everyone in your company a common language to use when talking about customers. Do you need people to participate in focus groups or reviews? You have your promoters. Are there customers that need to be followed up? The system has them marked down for you as detractors.
Identifying the Improvements Needed
Irrespective of what metric you use to measure feedback, it means nothing if you don’t act on it. So your NPS score doesn’t mean anything. Net Promoter Score campaigns are effective only if the insights received are acted upon. The ultimate goal of NPS surveys consists of two parts: increasing promoters and decreasing detractors.
Brands Can Be Benchmarked
Since NPS is a standardized process, you can easily compare your score against industry leaders to see where you stand. A simple web search provides you with results of other major organizations for comparison. The best part of it is, you don’t even need to compare yourself against others, you can compare your present results against previous years to see where you stand. An increase in the NPS scores lets you know you’re on the right track, a decrease tells you that you need to make changes. Whether you rate it against everyone else or just yourself, NPS results provide you with a benchmark to improve upon.
Leaving aside the debate on the good and bad of NPS, as a customer I prefer shorter surveys. Given a choice between a survey that takes me a maximum of 30 seconds to answer and one that requires me to answer 10-15 questions in 10 minutes, I’d pick the shorter one. You want your customers to engage and communicate with you; NPS does exactly that. Pair your NPS survey with a short follow-up question, and you have an insight into the customer's mind. To summarize, I would like to quote the renowned author and customer experience expert Bruce Temkin,
“NPS success comes from the process, not the metric.”