A lot of research looks into the value of different approaches to measuring customer satisfaction, and we hear the merits of customer effort versus NPS being discussed on many sites and blogs.
Is NPS still a good measure?
It was with this question in mind that we decided to undertake some original research. We wanted to find out if our thoughts on NPS were reflected in the behaviours of real Australian customers. We talked to 1,000 Australian customers about three different suppliers they had interacted with, giving us 3,000 customer stories to delve into.
We asked all of our respondents to rate their supplier on the standard 0 to 10 NPS scale.
We also asked them to tell us what their intended next steps were — from seeking an alternative supplier to telling others about their experience. This was across a wide range of industries, including government, health insurance, telecommunications, travel, gas/electricity suppliers and banking; so the data is not industry specific.
Personally, I am still in favour of NPS as a useful tool, and so was delighted to see that the research validated that it is still a valuable indicator of customer loyalty and potential future behaviour. The results from our research indicated the differences between promoters and detractors were more polarised than expected — and clearly showed that customers who rated their interaction as a 9 or 10 (promoters) will act differently from those who rated their suppliers 0 to 6 (detractors).
What did the research show?
The graph shows a cross-reference of two questions we asked: what NPS the customer gave, and what their next steps were.
Our results showed that 34% of promoters had told others how good their experience was — compared to 2.7% of detractors — and another 57% were satisfied with their current supplier. Conversely, nearly 18% of detractors indicated they were actively seeking an alternative supplier (compared to only 2% of promoters) and close to another 50% would happily switch suppliers.
The results are clear. Promoters are actively endorsing your brand in the marketplace, and half of detractors are at high risk of churn — promoters matter to your bottom line. What is even more worrying is that one third of passives were open to changing suppliers, and so are ripe for a marketing offer or conversation from competitors.
So what does it all mean?
At the end of the day my view is simple and probably overly pragmatic – measurement for measurement sake is a waste of time. What you need to do is take what you learn and implement strategies that will make a difference. This can be calling customers whose issue has not been resolved and fixing their problem, or using positive customer feedback to design your customer interaction framework. But don’t under-estimate the feedback you get from your customers – analyse, use it and make sure you take action.
In my next blog I will breakdown what elements of service that drove a promoter score and which (or the absence of) drove detractors. In the meantime, reach out on LinkedIn or Twitter if you have any of your own experiences with NPS you’d like to share.