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Does NPS really matter, or is there something better?

NPS QPC

Since the success of the Harvard Business review article ‘The One Number You Need To Grow’, Net Promoter Score (NPS) has grown in adoption and popularity as a way to understand whether your company is succeeding in business. Thanks to Frank Reichheld, the author of NPS, business managers were given a ‘simple to understand evaluation metric’ that could indicate how successful the company was in creating promoters.

This methodology is now prevalent in business. So prevalent, I experienced several rounds of lectures, exercises and training around ways to influence NPS. NPS spawned a new focus around metrics and survey. The key to NPS success has been its simplicity, 0-6 equals a detractor, 7 or 8 a passive, and 9 or 10 a promoter. NPS is then promoters minus detractors. The higher the NPS, the higher the growth potential of the company.

The basis of the NPS is a survey such as ‘How likely are you to recommend company X to friends, family colleagues?’ or some version of that verbiage. In the pursuit of increasing NPS, more and more in depth surveys are sent trying to uncover why people rated the company way they did. Some practitioners lean toward asking questions of promoters to understand what needs to be replicated. I’ve even seen questions such as ‘what would it take for you to rate us a 10?’. Sorting and sifting through some of the responses, if the customer hasn’t suffered form survey fatigue by now and therefore not responded at all, it can be onerous.

Inherently, a survey is based on old information. The interaction already occurred.

So, How does a company know and affect what is going on in real time or near real time what their NPS will be?

This question is the crux of why NPS may no longer be relevant. In my years of trying to figure this out, one constant seemed to always be there. The effort expended by the customer to maintain the relationship with the company. Think about it, if the customer has to expend ever increasing effort (time, money, etc) to keep the relationship going, at some point, an inflection point, they will decide to move somewhere else, usually a competitor.

This move to a competitor, quitting the company, is the ultimate event NPS is trying to prevent. So, in this data rich world, why don’t companies track the customers holistic effort expended? For that matter, is it even possible to do so?

Enter the next evolution of customer understanding – Customer Effort Score or CES.

What is this anyway? This is where the organization must strive to capture the effort expended. This can be quantified by tracking how long customers spend in each channel. How much time is wasted time to the customer, i.e. time spent in queue, time being placed on hold, time waiting for someone to call back. It needs to be further enhanced by understand that as customers move from channel to channel and rep to rep, this is frustrating. Ostensibly, customers are interacting to solve one issue – get a new device, correct an error in billing, or many other reasons for contact. The more channels that have to leveraged to achieve resolution, the higher the effort perception by the customer.

This move form channel to channel or rep to rep is transfer fatigue. When going to the web, a customer finds resolution and the effort is say 500 seconds. The second customer goes to the web, spends 500 seconds and then needs to engage a call centre, a chat rep or an email the second customer now perceives the first channel, web, as wasted time, wasted effort.

As organization’s begin to track this holistically across the organization channels, the data will show the inflection point where effort reaches X causing a high probability of choosing to leave. This will then afford companies the ability to become proactive in addressing bottlenecks. Reducing customer effort across the entire continuum of their business will be achieve in finding ways to make customer need resolution faster, more efficient and this, in turn, drives reduced cost to serve.

The end state is reduced customer effort result sin increased retention and therefore revenue, reduced cost to serve and therefore increased margin. The CES metric becomes the new management must have.

Luckily, there are experts working in this field right now and able to deliver the beginning of this data. To understand how this starts to work, watch this Tracxion video.

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