A bad customer experience can be very devastating. These days, the power of customer review can either make or break a company.
These days, consumers heavily rely on customer reviews before purchasing a product.
If you are one of the companies who suffer from bad reviews because of poor customer experience, then you may want to read further because in this article, The NPS Customer Experience, we will discuss how you can take that bad feedback and use them to understand your customers better.
In light of this, we will also discuss the following sub-topics:
What is a Net Promoter Score (NPS)?
The NPS Net Promoter Score or NPS is developed in 2003 by Bain Company Fred Reichheld to measure, understand, and track customer experience and customer loyalty.
NPS is based on one question: What is the likelihood that you would recommend the company to a friend or colleague?
The respondents are given a scoring system of 0-10, with 0 being the least likely to recommend and 10, being the most likely. The respondents are placed into one of these categories:
These are the customers who keep coming back to your product service and they also refer their friends to buy from you.
These are satisfied customers, but they may easily switch to other companies or brands and are not likely to be recommending your product service.
These are unsatisfied customers due to bad customer experience with your product or service and may likely voice out their dissatisfaction to others.
Later in this article, we will show you how you calculate your net promoter score metrics. But based on Reichheld recommendation, an net promoter score of more than 50 is considered excellent. Most top companies score between 75-80 percent.
Why NPS is important?
While NPS does not really measure the number of people that will go out and recommend or criticize your product or service, it still gives companies a better understanding of how customers feel about them.
When it comes to driving sales, word-of-mouth remains the most effective form of advertising, and knowing whether your customers are willing to promote your company can be valuable.
Additionally, based on Bain’s study on NPS metrics, the likelihood to recommend proved to be one of the powerful predictors of repurchases and referrals.
Another reason you should be using net promoter score is the simplicity of providing quick data on customer experience in a way that anyone can understand.
A high NPS score shows a successful customer-centered business strategy, while a low NPS score alerts the company of what it needs to do, which is to put any effort into achieving a better customer experience.
NPS can also be measured over time, so companies can easily track their progress from one year to the next.
How to calculate your NPS
It is quite easy to calculate your net promoter score metrics. You just subtract the percentage of detractors from the percentage of promoters.
If you have 20 percentage of detractors, 10% passives, and 70% promoters, your NPS metrics would be 70-20 = 50
What to measure using NPS
The good thing about NPS metrics is you can measure anything using this scoring method.
Aside from understanding the overall NPS of your organization, you can track your scores for almost anything from individual products, stores, websites, or even staff members.
For example, call center agents. One agent may have a 78 net promote score and a colleague with a 32 net promoter score.
By considering just their NPS scores, you will not have an idea of why they got this. If you can understand the context of each agent and what they are working with, it will start to make sense.
Perhaps the agent with a lower NPS score works with customers who request cancellations or refunds, while the other is working with first-time clients. These two agents will have different scores because of different customer experiences.
Another thing you may want to track is the average handling time (AHT) or first call resolution (FCR). You may also ask for feedback on specific traits like if the agent is polite or helpful. These are all important when it comes to analyzing data on NPS metrics.
The more data that you can gather to analyze the NPS score, the more you can fully understand what is driving customer experience. This allows you to prioritize the things you need to improve to have the biggest impact on your customers.
You may also use NPS to measure employees’ sentiments or known as employee net promoter score (eNPS).
eNPS measures how likely your staff members are to recommend your company as a place of work.
And as we all know, NPS is popularly used in marketing or customer experience strategies to better understand how a company is doing compared to its competitors.
NPS helps you understand your target market better and see how they respond to your product or service, even in social media campaigns and customer service staff.
The ultimate goal ins using NPS survey is to gain loyal customers, who will help promote your company or brand to consumers.
How to create an NPS survey
It is easy to create an NPS survey. However, you should take note of the long-term data use when it comes to deciding how you will administer them.
There are also available survey tools, but most of the time, these survey tools have a limit when it comes to the ability to take action on the results because they can only measure extremely likely customer experience in one metric.
You may also look at several customer experience management platforms or customer management survey tools that are made for measuring NPS to get a comprehensive view of your customers.
Most of these tools allow you to keep track of all the interactions with your brand customers, both the current ones and those potential ones.
You may use the NPS data or metrics to better understand the different touchpoints and which ones have high NPS scores and which ones have the lowest NPS scores and metrics.
Questions on demographics
It is not surprising to start your NPS survey with demographic questions such as age, gender, location, etc. These demographic survey questions help you create segmentation during research and analysis.
Just avoid demographic survey questions that are not needed or questions whose answers are already in your other systems such as CRM, CSAT, or customer database. And remember the fewer questions, the better.
The NPS question
Getting the right NPS survey question is the core of measuring your NPS score. You may add other sections but the NPS question is the most important one that you want to get from your respondents.
What is the reason for your score?
This is an open question that you often ask your customers on their primary reason for giving you that numerical score when it comes to measure customer experience.
This follow-up question will help you find out the drivers, promoters, and detractors.
You can manually go through each one of the answers. However, for the larger number of respondents, there are available tools that can analyze each feedback automatically and this will save you a lot of time.
How can we make your experience better?
This question resolves what you can do to improve your customer experience. This question is helpful if you plan to do closed-loop follow-up and customer ticketing with the responses.
If you have the answers to this question, then it is easy to resolve the issues with the customers.
Not all the time that we will need both the “reason for your score” and “how could we improve” questions as many times that will have the same answer.
An example would be, if the reason they gave a bad score was “long call waiting times”, the way to increase the experience will probably be to shorten the wait time.
Permission to have a follow-up with the customer
It is also a good practice to politely ask a customer for a follow-up. But remember too, that not all people want to talk about their issues.
Thus, depending on how your survey is distributed, you may or may not have the customer’s basic contact information.
Do not be afraid to ask if you need this information but also, do not ask for information that you can get with a metadata tool or from another system.
NPS advantages and disadvantages
Proper customer segmentation
NPS provides proper customer segmentation where you can see exactly the types of clients that you need to focus your efforts on, whether they are the promoters, passives, or detractors, to get better results on improving your customer experience.
By eyeing and consistently analyzing the ratio of promoters and detractors, you can get accurate insights about the long-term customer journey and relationships you are building, and you will have an idea of whether you will grow as quickly as you have initially planned.
NPS surveys are accurate
Since NPS uses question that is larger in scope, you will get unbiased and accurate feedback about the product or service.
Instead of asking specific questions, NPS uses a broad approach, questioning customers on the likelihood to recommend a company or product as a whole.
The effect of this is the score and feedback are likely to be affected by any particular events. Your company will get specific and meaningful feedback, with fewer outliers caused by recent positive or negative customer experiences.
NPS has a long-term customer satisfaction metric
NPS is focused more on the overall referability of your company or brand, and not just on the individual customer experience.
This is based in the customer journey and on the fact that people are unlikely to refer to a product or service if they have no trust in it. But if they do, then they are more likely to stick to it and recommend it to their family and colleagues.
NPS surveys are realistic
Net Promoter Score NPS gives a more realistic perspective of the overall customer sentiment and feedback since the sample size is randomized to cover the entire customer base, and not just the recent active users in the customer journey.
NPS surveys have a higher response rate
An average survey has a response rate of over 3%. In NPS surveys, the rate is much higher with a rate of 20% to 40% range.
This is because of having just one question and the choices are given on a numerical scale of 0 to 10. This makes it easier for respondents to offer quick feedback since there is no additional text to read further.
A higher response rate means that even with a small NPS survey, it can still provide meaningful, statistically significant data that companies can use to improve customer retention and generate more revenues.
NPS surveys require follow-ups
Most net promoter score NPS surveys do require follow-ups, and this means that you cannot rely on just one simple question.
The best NPS ratings can create a tunnel vision effect, where most of the time businesses think they are on the right track. This can be limiting when it comes to knowing what the customers want in terms of customer experience and satisfaction.
While getting a good NPS score is relevant, you do not call it a day since you need that score to act on the improvements needed. You need to start engaging with your promoters and present your brand to others. You need to become more proactive in addressing issues faced by the detractors.
Is not a good stand-alone data
A satisfactory NPS score does not mean that your company is doing well.
An example of this would be, when a first-time customer buys a product from you and answered a short NPS survey with a satisfactory rating, this is a good indicator of a satisfied customer.
However, a few days later the was a problem with the product and the customer wants a refund. Then the refund process is not as smooth as the buying process, so the customer is frustrated and upset and promised to never buy from your company.
If you have sent another NPS survey at this time, the same customer would be a detractor.
This is a problem with NPS surveys that it just captures one point in time with the customer in the customer journey. The customer’s response is heavily dependent on his or her customer satisfaction experience.
Only focusing on NPS surveys as a measure customer experience is not a good thing to do and can lead to turning loyal customers into detractors.
What users say is not necessarily what they do
All self-reported data is not accurate. This means not because a customer says they will recommend you means they will.
Nielsen reports that self-reported data from users tend to heavily depend on and influence by cognitive biases.
Like for example, if participants said that they drink tea on their own on a NPS survey but when observed in a natural environment they drink tea with honey or lemon.
The same thing can be said with net promoter system surveys. A favorable NPS score from a customer does not guarantee you that the same customer will likely refer your product or service to a family or friend.
NPS does not show them why behind the score
The most important data that NPS misses is the why behind the score in measuring customer experience. If your company received a high net promoter system score, do you exactly know why? And if you received a low NPS score, can you tell where you need improvements?
While it was said previously that you can do a follow-up question to et customers explain why they choose that particular rating, the customer feedback depends on the customer’s recent memory of the interaction with your company. That recollection may not be accurate or detailed enough to provide you with an actionable response on customer satisfaction.
How user research and NPS complement each other
NPS is a quantitative metric that is also a strong signifier of a company’s strength in customer experience. However, for NPS to become a good measurement tool, this should be paired with qualitative insights to bring in the right data behind the score.
To do this, most companies use NPS to look for areas that they need improvement on and then collect customer insights through several qualitative research such as usability studies to get a better understanding of why they got the score.
By hearing your customers explain better why they provided that rating for your company is easier to adapt to meet their expectations in the future.
Think of using NPS as an A/B test. Why this provides you with what your customers are doing, this limits you to understand them better unless you conduct user research.
If you got a great NPS, you can conduct qualitative research that digs deeper to find out about customer satisfaction and what your customers love about your product or service, and why.
You can watch them navigate the site or the app and get the customer feedback on what motivates them to get that score for you.
You may discover that even though they graded you with a high NPS score, the same customers can have a hard time navigating to your website or they do not understand the pricing that was seen on one of your sales pages.
You may also experience or discover interesting insights when customers start to interact with your company, and you can replicate these somewhere else.
Observing your customers and how they interact with your product or service provides you with a good understanding of your NPS and you can easily make an immediate, actionable plan.
Once you have a regular research schedule, it is also easy to combine your NPS survey results with corresponding qualitative research data to begin your development process.
You need to remember this: Customer experience is a moving target. This means that you do not want to miss the mark when it comes to understanding your customers and knowing exactly how NPS influences your customer experience.
NPS is a good practice to do to keep up with how you can make good customer satisfaction. However, there are also some limitations to using NPS, and using its score as a sole measure customer experience is not recommended.
Combining your NPS strategy with frequent qualitative research allows you to zero in on what your customers really think about your product or service. This is your way of making your brand exceed your customers’ expectations.
Keeping your customers happy enough with above customer satisfaction to continue coming back and recommending your brand to others is a repetitive process that involves the entire staff in your company. This means that everyone, from your sales team to the customer service team, will need to be fully committed to building a customer-centric company.