Many companies that today measure Net Promoter Score (NPS) to gauge customer loyalty have trouble getting things to move or change for the better. Here are 10 tips to get started or get back on track.
5 Do’s when working with NPS
1. Act on the feedback and close the loop
The most essential is to do something with the data you collect. Acting on the feedback you receive from your customers shows that you care and want the best for your customers. Closing the loop is about calling customers and understanding the root cause of them being either a detractor, passive or promoter. Most customers are positively surprised that you call them and want to listen to them even more, customers also want you to understand and change. Another way of acting on the feedback is to look at the answers on the aggregated level and improve the areas that most customers say you should improve or change. The changes must be prioritized after what would be beneficial for most customers or your most important customers.
To the customers so they know what you will improve. This can prevent them from leaving you. If they know that you will change something that they are dissatisfied with today, they are more likely to stay.
3. Compare with a relevant benchmark
You must compare your NPS value with similar companies when analyzing your business NPS. A lot of differences can be seen between industries, B2B/B2C, type of product/service and the way you measure NPS. Always compare Relationship NPS with the same and Transactional NPS with Transactional NPS and try to minimize the misleading comparisons.
4. Building economic proof
Doing an economic exercise with your customer feedback can create a stronger buy-in from your decision-makers and the whole organization. You will create a common view of the importance of the customer’s voice and how much is at risk in your customer relations. This will definitively drive actions to a paralyzed situation.
5. Involve the whole organization
Make sure the customer’s voice doesn’t stop in marketing or on general management levels. Make the feedback visible for all employees both front line and back end. With this input, employees can adapt and explore the best ways of handling the customers. They can discuss and share best practices and set a common framework for successful key behaviors and service in customer meetings. In a strong customer-centric business, all know how to contribute.
5 Don’ts when working with NPS
1. Overuse the NPS
Many times we tend to include the NPS question in all surveys and all touchpoints. We fall in love with the concept and think that this will predict customers’ behavior just by asking the question to the customers. Instead of overusing the NPS question, aim to have the question in the correct place. Ask the NPS question primary in relationship surveys to have an overall view of the experience connected to your company and brand.
2. Using transaction NPS as the target for the whole company
Avoid using NPS as a quality target for the whole company only using data from one exclusive function or touchpoint. Since the likeliness to recommend lies in the whole experience with a company and not one single interaction, it is easy to be misled in attempts to link to financial results using NPS in that way. For functions such as customer service, it is relevant to ask the NPS question (sometimes because this is the only way), however, instead of targeting on the transaction NPS use NPS in transaction surveys as an early warning system to alert specific members of the team to take fast actions. For example, it can give you fast information if your systems are down, something unexpected happened on the market, product faults or unclarity in any of the other touchpoints. Quality targets on customer service or other functions should instead be set by the level of satisfaction in this service.
3. Individual compensation on NPS
When we use NPS as qualitative metrics for a certain function it seems natural to align this with individual goals to make sure employees know how they can contribute. However, since the NPS score is about evaluating the whole customer journey, employees in one function won’t be the only ones impacting the NPS. Compensating employees should, therefore, be on their performance and on things they can control. If you want to set a bonus on NPS, it is better to set targets on a higher level like function or company level.
4. Treat all customers the same
Avoid seeing all customers as equal and that you can create the same experience to all. Instead, focus on segmenting the customers based on value for your business and into NPS categories. If you have the NPS score for customers, it is relevant to understand what expectations each segment has, the value they create for you and what revenue is at stake. This will ensure the right decisions are taken based on the customer’s voice and can also help to prioritize resources.
5. Customize the NPS methodology
Many times we meet companies that want to measure NPS and understand the level of loyalty of their customers, however, they want to change the question, the scale, the phrasing, and other things because they believe that it does not match their business. The NPS is sometimes questioned because of the recommendation to “a friend” and sometimes also the mismatch in the middle value and share of passives. It is important to emphasize that the moment you change the question, scale format, etc. you lose the essence of the methodology and you won’t have a clear benchmark to compare your business with. So, don’t customize the NPS methodology!
Do you want to know more about NPS – feel free to contact Anneli.Malaguti@brilliantfuture.se