How likely are you to recommend? Is Net Promoter Score the natural (and best) CX metric?

11 December 2018

One of the biggest indications of brand success is customer retention and brand loyalty. Interestingly, marketers and business owners find that loyalty and advocacy can be difficult to measure and the humble NPS (Net Promoter Score) – one so frequently used – gets mixed reviews.

“NPS is just a number, but big data analytics can reveal much more about customer behaviour and intentions, and it can link these to business outcomes.”

While other experts perceive it as something that is underused, and a valid indicator.

“I’m a fan of NPS. For the customer, it’s a quick and easy survey, taking 15-20 seconds versus surveys that take 15-20 minutes. In addition to the short NPS question, consider using one of the follow-up questions … take advantage of the information. Don’t just look at it.”

 

What is the Net Promoter Score?

You’re likely to be familiar with the NPS score – having completed evaluations and surveys that ask you to rate your experience on a scale of 1-10. The typical NPS question is – “How likely are you to recommend [insert brand name] to a colleague or friend in future?”

The overarching concept of NPS is that business growth and profitability are driven by customer loyalty – the original research (conducted by Reicheld and Bain & Company) found that recommending something to a colleague or a friend is one of the strongest indicators of loyalty to that product/band.

The NPS is described as “a trusted anchor for customer experience management,” and if you are in the realm of brand or marketing management you’ll understand that customers have a very real brand experience every time they interact with your people, products or services.

 

What should we take from the NPS?

The NPS metric calculates on a scale, which customers are loyal, how many are passive and how many are unhappy with your business. Any positive score means that you have more advocates (or promoters) who are willing to recommend your brand than critics or detractors.

Additionally, the stronger the NPS, the more likely your organisation will be to generate consistent and organic leads from word of mouth referrals.

One of the clear positives about using NPS is its simplicity. It should also be noted that detractors have quite a sway – any score over 50 is quite good, with any score over 70 rendering the brand “world-class.”

By comparison it’s worth noting that brands amongst the highest NPS scores in the world include TESLA and The Iconic – for B2B, an NPS in upwards of 20 is very positive.

The primary key to consider using NPS is can we identify the drivers that improve customer relationships?

 

Is it the best measure?

When the NPS score is considered by itself, it is rendered rather meaningless, however, on the whole this is the measure “that will most likely link to financial outcomes.” It’s also important to ensure that participants taking the survey will interpret your question in the correct manner. Will they connect the NPS question to the overall brand or just a singular product experience?

Ensuring you have follow up questions in a customer questionnaire regarding different and specific areas of the customer journey is a way to overcome this. Additionally, a provision or allowance for the customer to submit a qualitative comment that clarifies their answer or adds suggestions or ideas, is another way to ensure your teams are best informed with direct ways to improve the customer experience.

 





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