Why NPS No Longer Provides a Complete Picture of Customer Experience
NPS has been top of mind for marketers since Fred Reichheld and a team at Bain & Company determined the one question that seemed to predict company growth: What is the likelihood — on a scale of one to ten — that you would recommend Company X to a friend or colleague?
High scores on this question were highly correlated with repurchases and referrals — customer activities that lead to increased revenue.
There are clear benefits to using NPS surveys, such as simplicity (surveys may consist of just one question), ease of use (they can be administered by phone, email, text or mail) and adaptability (it’s open-source and works in various business scenarios). Many large companies have successfully adopted the practice, including Apple, Enterprise Rent-A-Car and Philips.
But with the growing prevalence and importance of online reviews and social media, NPS may no longer be enough to determine your future success. A high NPS measures the quality of a company’s relationships with current customers — but what about profitable organic growth?
What NPS Can’t Tell You
An NPS survey in isolation is not specific enough to help you truly understand customer sentiment and loyalty, because it lacks context Additionally, without a plan for acting on results, the survey can’t help you improve your business.
A low NPS score by itself may alert you to a problem, but without the details, it’s difficult to take action. You’ll still have to dig deeper to determine the root cause of the customer’s dissatisfaction.
NPS survey data, combined with other survey, social and review input provides a comprehensive picture that can be used to take immediate, targeted action. If you uncover a review that criticizes your service quality, for example, you can reach out to the customer directly to address the issue.
What NPS Can’t Tell You
Critics of NPS say it may not be specific enough to help you truly understand customer sentiment and loyalty. Additionally, without a plan for acting on results, the survey can’t help you improve your business.
A low NPS score may alert you to a problem, but without the details, it’s difficult to take action. You’ll still have to dig deeper to determine the root cause of the customer’s dissatisfaction.
Online Reputation Management (ORM) platforms, by contrast, provide at-a-glance access to all online reviews from all of the key sites on a single dashboard. With the review in-hand, you can take immediate, targeted action — if you uncover a review that criticizes your service quality, you can reach out to the customer directly to address the issue.
Digging Deeper with Analytics
By capturing and analyzing unstructured, free-text data contained in online reviews, you can begin to understand how your customers perceive you at a much more granular level. And, you can identify and address service issues quickly, before they lead to customers writing negative reviews.
Taking this a step further, sentiment analysis flags words that are associated with or related to troublesome keywords. For example, the word “reeked” will be grouped with “odor,” while “crowded” might be grouped with “wait times.” Such associations provide a more complete and accurate reflection of the customer’s experience. NPS surveys don’t address sentiment — and even the most powerful survey tools frequently lack the AI and machine learning components necessary for in-depth understanding of customer sentiment.
Finally, competitive benchmarking helps you understand how you’re performing relative to your competitors. Tools like tornado charts such as the one below provide a clear picture of performance trends relative to industry benchmarks. You can compare customer sentiment about your locations in various categories against the average for competitors — at a glance.
Knowing this information can help you zero in on problem areas, teams, or even individuals and implement training programs or operational changes. Or, you can reward employees for providing exceptional service and standardize on what’s working across your locations.
A 360-Degree View of Customer Sentiment
Although NPS is still a powerful measurement of the probability of customers to refer someone to you or continue to use your services themselves, it doesn’t provide a full picture of how they feel about your brand.
Online reputation management helps create a 360-degree view of customer sentiment, and empowers you to take action to strengthen your brand perception based on candid feedback from all available sources.
Learn more about how you can use advanced analysis and reporting tools to improve customer experience.