NPS is a good indicator of customer satisfaction about a Transaction, however it does not say much about the Experience of the customer or the Relationship with the customer. Since NPS measures the response to a question, not the actual behaviour of customers it is not an indicator of customer loyalty.

A good application of NPS is for instance when a customer scores low after an interaction with the call centre, the organisation follows up with the customer to understand WHY she scored that way. This enables the team lead and the call centre agent to learn what caused the low score and to do something about it through training, process adjustments, communication, etc. This improves the experience in future customer interactions and at the same time “wins back” the dissatisfied customer, or detractor.

A painful example is where an organisation uses NPS to measure customer satisfaction in the different touch points. The customer gives a positive score after an online sales transaction, but calls the call centre because of a problem with the delivery of the service. The call centre gets a negative score on the sales transaction that actually failed in another channel.

In the first case the NPS is score is primarily used to identify issues and positive behaviours, and secondly as a trend line to measure performance of teams in a specific process/transaction. In the second case the NPS scores are rolled up to department level and give an inconsistent performance indicator, without any link to the underlying interactions. What’s worse, by tying the NPS score to internal rewards, it encourages silo behaviour where the NPS score might improve, but the customer experience does not.

The more complex the product/service is from a customer perspective (telecoms, banking, insurance), the more rigor is required to properly deploy and use NPS. Companies need to decide the purpose, objectives and application of NPS, and how it relates to the real customers’ experience. Here are some considerations:

- Is there a thorough understanding and definition of: Customer satisfaction, customer interaction, customer experience, customer relationship over time, customer loyalty?
- Do you measure service quality, or experience, or satisfaction (and no, you cannot capture all 3 in a single score)?
- As NPS is mainly transactional, how will the experience/satisfaction be measured for 70-80% of customers who do not interact with the organisation?
- How do you operationalize the individual customers’ scores as well as the overall score?
- Since the customer is the only one who experiences the complete company, what are the relationships between the different interactions, touch points and processes where NPS is measured?
- How is the NPS score validated/complimented with other measurements to understand customer satisfaction/experience?
- As touch points/products/services change over time, what is the short and long term use/value of the scores?
- How are customer facing projects and initiatives incorporated in the measurement of satisfaction/experience?

The difference is scores may be to do with the Cassandra Phenomenon. The following is from http://www.infoquestcrm.co.uk/B2B%20C- Sat%20Surveys%20-%20Best%20Practice%20Guide.pdf

The Cassandra Phenomenon sits atop the list of biases and influences that undermine the candor and accuracy of a customer satisfaction survey. It is defined as –

In a survey environment where the respondent believes their identity is or may be known, a strong positive bias filters into responses.

In a survey environment where the respondent believes their identity is or may be known, a strong positive bias filters into responses.

The problem is simple. When customers believe that their identity is or may be known, roughly 70% of the population will hesitate to openly voice a strongly negative opinion for fear of the potential consequences. That hesitancy is driven by concern over possible reprisals, the “hassle factor” of potentially being asked to explain or defend such comments, even misgivings about getting a business partner into trouble (however deserving) and thus detrimentally altering whatever relationship is currently in place.

It’s ironic when you think about it. In most business settings, success is based on the development of personal relationships. Over time, people become acquainted, familiar with their business to business contact people, perhaps even develop something of a friendship.

When they do, they tend to become more careful of hurting someone’s feelings or expressing views that may get someone into trouble. In other words, personal relationships tend to suppress the expression of dissatisfaction or unmet need.

The Cassandra Phenomenon does not apply to everyone. Through long observed behavioral patterns we see that approximately thirty percent of the general population suffers no misgivings about clearly and openly expressing their views – both positive and negative. Those folks will look you in the eye and tell you precisely what is on their mind, regardless of how they think you might react to it.

The problem is that the remaining seventy percent of the population harbours subconscious concerns about the ramifications or consequences of openly speaking their mind. For those people, the only safe approach, assuming they can’t find a way to duck the survey in the first place, is to “soft-sell” or “back-peddle” on complaints rather than openly voice them or have them committed to paper, where the possible consequences cannot be measured or predicted.
And, of course, for both the interviewer and the company using the resulting data, there is no possible way to know – before, during or after the survey – which portion of the population any single customer belongs in.

The only possible way to mitigate these influences, and to promote the candid expression of accurate opinions, is to provide survey participants with a vehicle that will provide them a comfort level to openly express their views without fear of consequences.

How many of the available survey methodologies do you think provide for that need?

When customers believe their identity is known, 70% will not openly voice negative comments for fear of producing unwanted consequences.

And there is an 8-page review of NPS (I think you may already have seen this Wim) on the Downloads page http://www.infoquestcrm.co.uk/downloads-examples/

My main issue with NPS is that I cannot explain the high fluctuations in the score, not that we cannot explain why people rate us high or low.

My examples are not related to transactional NPS measurement. And I can ask the “reason why” of high/low Customer Satisfaction too.. I don’t need NPS for that. We do, btw, see that the factors Customers claim to be reason for (not) recommending us, show very similar correlations with both NPS scores and Customer Satisfaction scores. Another reason to just stick with Customer Satisfaction..

Thx for your comment & stopping by.

Wim

Daarnaast is bij transactionele NPS het aantal respondenten vaak kleiner waardoor grotere fluctuaties eerder optreden.

Maar het gaat om het waarom. Als het onderzoek het waarom niet zelf oplevert, zul je contact moeten opnemen. In zowel goede (promotors) als slechte gevallen (detractors). Bij Apple stores doen ze dit zelfs elke dag (daily download)

Customer-i
Frank van Gool

PS Er is een grote correlatie tussen hoge NPS en en hoge gem KTV (>8)

I agree with Glenn, NPS is great first step and is fantastic to unify effort and customer focus across departments in a business. I also like that I can get some (not entirely reliable I agree) benchmarking across a variety of industries as well.

I think the exciting thing for us will be to correlate NPS to segments and interactions/events as we capture more data across the customer experience.

An example of this is that as an online retailer we survey post order arrival but will soon be surveying after any returns as well. Pre and Post-Return comparisons and the qualitative feedback we’ll get with those surveys will really highlight where we need to improve things for the customer.