We Don’t Need An NPS-[fill in the blanks]

You have probably heard this before: “People in [fill in any country name] do not rate your service with a 9 or higher. That’s not our culture”. And every now and then you’ll see someone make such a claim in a blog as to provide a reason to alter how NPS is calculated (see the picture).

There, of course, can only be one reason to do such a thing: to show a better score than your Customers say you’ve earned.

What’s the use?
Moreover why I do not see a reason to alter how NPS is calculated is merely because it is very obvious that how one calculates a score does not change the way how Customers feel about you. And since it should be the goal of any Voice of the Customer Program to better understand how Customers feel about your service, and why, so that you can go do something about it, there is no reason to alter the way you add-up-and-detract-and-or-divide the ratings.

The cultural effect is as irrelevant as it is non-existent.
Set aside any caveat with NPS itself, I agree largely with Fred Reichheld when he states that the ‘cultural effect’ is largely irrelevant.

On top of that I do not buy into it, even knowing there has been research showing there are cultural effects. From my own experience though, I’ve seen proof there is no such effect, at least not in all cases. I have three examples:

  1. The first one is Center Parcs, late nineties, where we scored high eighties on average (!!) Customer Satisfaction scores from our guests. We even had to change the way we measured (not calculated!!) Customer satisfaction, from a 10-point scale (1 – 10, not 0 – 10) to a 4-box-scale and some aggressive target setting to get everyone moving on finding new ways to further improve our Customers’ experiences. This is proof for the fact that Dutch Customers give high scores, even on average.
  2. The second one is Microsoft X-Box Customer Services where ‘we’ scored highest satisfaction ratings for twelve consecutive months compared to all global Customer service sites (and languages). This is proof for the fact that it is even possible for Dutch to score higher ratings compared to any other culture in the world for the same service in the same time-frame.
  3. And last, but not least, I see it in my work today where the vast majority of Customers that have contacted our Contact Center, rate their service with an eight or higher, of which a significant part rate us with a 9 or 10. This is more proof for the fact that Customers do rate high, even in The Netherlands.

I bet that if you look for it in your own country/company/context, you’ll find the same, or do you believe that ‘my’ small country is the exception to the rule?

Bottom line: If your Customers rate you a 7-something, it’s because you provide a 7-something service. If you’re not happy with that, go do something about it, the hard way.

P.s. Why do you think people who suggest the metric should be adjusted to the “culture”-effect never trip of the fact that NPS is measured on an 11-point, not a 10-point scale? Please let me know in the comments.

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4 responses to “We Don’t Need An NPS-[fill in the blanks]

  1. Hi Wim,

    I completey agree!
    Artificially trying to lift your NPS, means your using the metric for the wrong reasons.

    Cos need to focus on the reason behind the score. Need to understand enthousiasm or criticism or passivity. Need to track results through time. For me benchmarking with the US is less important than benchmarking yourself through time. And in the latter, cultural effects are of no importance.

    Be happy with every feedback you get. Ask people, because you’re eager for the answers. Make sure everybody in the company listens to the answers (each on a different level). Take action. And inform colleagues and customers you’ve taken action. N=1 can help you transform your company, but you have to give it a chance.

    For me the score itself maybe is the least important aspect. NPSpirit & NPSystem make the real difference.

    And by the way, true enthusiasts give ’9′-s and ’10′-s also in NL. And even for low-interest services as banks and insurance companies. So no excuse for passivity. You have given them a reason…

    Thanks for another good post and for ‘killing the dutch effect’.

    Anders

  2. Interesting article, thanks. One point to consider is some sectors like financial services struggle to attract high NPS scores as they have low engagement. Thus I’d advise people to get your data (NPS or otherwise), understand what sector norms are, use qual to plan a route forward. Cheers.

  3. Hi Wim

    Another interesting post.

    NPs is hardly out of the news these days. If it isn’t being touted as the best thing since sliced bread by new managerial converts to the NPS-cult, it is being pulled apart by independent researchers for being a methodologically flawed instrument and for not being any better than CSAT at predicting growth. Bob Hayes lays it all out in an interesting article about ‘Customer Loyalty 2.0’ (http://bit.ly/Y2i7np).

    There’s never a dull moment in NPS-land. And now comes the suggestion from Alexander Dobronte in a blog post about ‘We need an NPS-EU’ (http://bit.ly/xwIypf) that to overcome cultural biases in Europe we should tinker with the already methodologically flawed NPS to make it easier to get a higher NPS score!!!

    Putting the methodological weaknesses of NPS to one side, do we really need to adjust the scoring algorithm for NPS for European audiences? Or for any other audiences come to that? A quick look at the literature suggests that most people actually over-score when asked questions about their perceptions of a service, e.g. their satisfaction (see Danaher & Haddrell’s 2006 article on ‘A Comparison of Question Scales used for Measuring Customer Satisfaction’ for more details http://bit.ly/ZIGjir). Our tendency to over-score was described in a paper by Peterson & Wilson way back in 1992, which has led to data transformations being created for surveys so that the data becomes normally distributed and thus, easy to analyse using statistical instruments like regression analysis (which requires a normal distribution). Far from people scoring too lowly all the hard evidence points to the opposite; that people routinely over-score on perceptual scales.

    The argument about scale construction rather misses the point. It doesn’t matter what scale is used (providing it is methodologically and thus, statistically robust, of course) but rather, what it tells you. And more importantly, whether you can do anything about what it. I have seen far too many meaningless statistics proposed by management, which when you question them closely, turn out to not to have any managerial impact at all. If you can’t use a measure to actively influence a business’ direction you shouldn’t waste any time measuring it. As you rightly point out; if your NPS is negative (and it will be for most organisations) the questions you need to be asking yourself are why do you have many more detractors than advocates, why are they detractors and what can you do about it. This is the real business of management. Not trying to fudge your NPS scores so that it will be higher. Customers aren’t so easily fooled. And they vote not with a rating out of eleven, but with their feet.

    Graham Hill
    @grahamhill

  4. Win,

    I would like to add that customer surveys, in general, have other systematic limitation that have to be managed more proactively:

    1) Customer surveys could breed feedback fatigue:

    http://ariegoldshlager.posterous.com/do-your-customer-surveys-breed-feedback-fatig

    2) Customers do not always answer the questions they’re asked:

    http://www.quora.com/Customer-Feedback/Do-your-customers-answer-the-questions-they%E2%80%99re-asked

    3) Some customers are telling you white lies:

    http://ariegoldshlager.posterous.com/are-your-consumers-telling-you-white-lies

    Arie.

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