August 31, 2012
Have you ever been caught in this crossfire?
Marketing Manager: “Net Promoter Score is the one number we need to grow!”
Customer Intelligence Manager: “Nonsense! ‘Satisfaction’ predicts customer loyalty better than ‘likelihood to recommend’ – it says so in the wonky business journals I read!”
Marketing Manager: “You don’t understand how business works!”
Customer Intelligence Manager: “You don’t understand how math works!”
The sad thing is that in a micro sense they’re both right, but in a macro sense they’re both wrong. The reason? They’re each taking an inside-out point of view based on their own specialties.
Where NPS Fits In A Customer Experience Measurement Framework
In our research into customer experience measurement, we see many organizations that use Net Promoter Score. Some use it poorly because – like the fictional marketing manager above – they don’t understand the limitations of what NPS can do.
Here’s how they should think of it: Customer experience is how customers perceive their interactions with a company along each step of a customer journey, from discovery, to purchase and use, to getting service. NPS measures what customers say they’ll do as a result of one or more of those interactions. It’s what Forrester calls an “outcome metric.”
But outcome metrics are just one out of three types of metrics captured by effective customer experience measurement programs. The best programs gather and analyze:
- Descriptive metrics that tell you what actually happened.This is operational data about your customers‘ interactions, like call center records of when they called you and how long they were on the phone, or billing system records of what they bought from you and what channel they used for the purchase.
- Perception metrics that tell you what customers thought happened.To measure customer experience is to measure customer perceptions—which only exist in the minds of your customers. You‘ll get this insight out of your customers‘ heads and into your hands by asking them how satisfied they were with various aspects of each experience that you‘re measuring. Did it meet their needs? Was it easy? Did they enjoy it?
- Outcome metrics that tell you what customers intend to do—or actually did—after interacting with your company.These metrics let you connect a customer perception, like being satisfied with a shopping trip, to a business result like getting another purchase from the same customer.
Net Promoter Score can be a very effective metric to use in that third bucket. It’s based on customer responses to the question: “How likely is it that you would recommend [company name] to a friend or colleague?” The logical assumption is that there’s a direct tie between the quality of an experience and whether or not you’ll get a recommendation as a result. And in fact, our own research proves that this strong relationship does exist.
The Ultimate Use Of “The Ultimate Question”
Beyond its place as an outcome metric, there’s another great use for NPS: Some of the best-in-class companies when it comes to CX measurement tell us that it’s their rallying cry for everyone from front line employees to executives. Everyone understands that it’s a good thing when people recommend them, and worrisome when people bad-mouth them. As a simple, easy-to-grasp metric that measures this dynamic, NPS gets people’s attention and motivates them to do better. And that makes them more receptive to the next level of metrics, which tell them what to do in order to improve.
In our new book, Outside In, my co-author Kerry Bodine and I profile companies that excel at various aspects of customer experience. Those that are great at using Net Promoter Score use it as part of an overall system – whether they pair it with their own custom mix of perception and outcome metrics or adopt the extended Net Promoter system that grew out of the original NPS research. Regardless of the details of their approach, they don’t use “the one number” as their only number (a classic trap for marketing managers), nor do they go down the rat hole of debating the nuances of NPS math (a classic trap for customer intelligence managers).
To see what I mean, watch this short video about how JetBlue incorporates NPS into its customer experience measurement framework from the right perspective – the outside-in perspective of their customers.