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February 27, 2017

Why NPS should stand for Near Pointless Scoring

By michaelpace on February 28, 2012

NPS and Behavioral scoring model

Just stop for a second and answer a question for yourself:

Why are you measuring Net Promoter Score (NPS)?

  • Does it provide you the best insight to your customer’s satisfaction?
  • Maybe you read The Ultimate Question six years ago, and have found your silver bullet to customer service?
  • Or your boss told you to do it?

Does anyone else struggle with what to do with a score of 27 when last month was a 29?

Do you end up looking at all the verbatim to understand the differences?

Do you ever wonder if someone’s score of 6 is another person’s 8?

Just stop again, and think why are you tracking NPS; for what purpose are you asking people “would you recommend our services/product to a colleague, friend or family?”

(Most probably) The reason you ask this question is to understand “how likely is my company going to retain you as a customer?”  If that was the question you needed the answer, would you consider possible other ways to skin the cat?  The primary purpose of Customer Service departments is to retain customers.  Yes, great customer service can fill the top of the funnel with new, super-qualified and efficient leads. (Learn more about the traditional funnel and how to Flip the Funnel) However, if Customer Service is not focused first on retaining customers, they become a worthless cost center.  Let me be clear, there are clearly differences how companies approach retention (ex. Zappos and <insert name> cable company).  Back to the heart of the matter; if you step back there are more ways than just NPS to answer the question “how likely is my company going to retain you as a customer”.  It is not the silver bullet.

One recent trend that has peaked my interest is customer behavior scoring.  This scoring uses variables, determined by the organization, that help leaders, management, and agents understand how often engage with your product or service, how effective customers are at using your product/service, and how much of your full suite of solutions are they utilizing.  By leveraging behavioral data, you take the subjectivity out of scoring.  This methodology is gaining steam with SaaS model businesses.  For example, you should be able to infer a customer’s likelihood of retention or attrition by understanding how often they log into your application.  This data can be presented in more raw form to analyst teams to create proactive programs and/or fed to front line associates with specific actions to take if contact is made.  There is considerably more actions that can be taken based on behavioral data than from subjective Net Promoter Scoring.  A Boston based company Apptegic is making some nice progress bringing these tools to market.

And while I think behavioral scoring is incredibly interesting, I am not sure it is the answer either.  However, if you are able combine the emotional and subjective scoring with the behavioral and objective scoring, you start to see a much clearer picture of an actual customer.  Emotional scoring (NPS/CSAT) measures the depth of the relationship, and behavioral scoring can measure interaction; together you get what I would call an Engagement Score.

NPS and Behavioral scoring model

And it gets even more interesting if and when you are able to understand the potential impacts of their social graphs.

NPS, behavioral and social graph

Now, you have a clear understanding of who your brand advocates are, and can develop programs to leverage their enthusiasm and the power of their voice.   You can also be more prepared if you have active participants with loud voices who are more likely to comment on displeasure.  Once you understand which box your customer is in, you can develop effective actions to be taken by your leadership, marketing and floor associates.

All I am trying to say is NPS is not the only game in town.  We should all be questioning why we do things.  And finally, if you get to the root of you quest (the why), we can develop solutions that meet and exceed our needs in this dynamic landscape.

Are you fed up with NPS?

Are you using another customer scoring system that is working for your business?

Does a combination score lead us closer to a “silver bullet”?

About mpace101

Comments

  1. 12 Comments

    Mike,
    I’m not at all a fan of NPS. But, in fairness, I’ve probably read the original published materials more than most. The argument, logic and intent, in my conclusion is not ultimately the problem.

    The problem with NPS is how it has been applied by pracitioners. Its like the old expression “guns don’t kill people. people do”. Too many have looked at NPS as a short cut to claim customer loyalty victory to their senior management.

    Oh yea. And an score of X is not actionable.

    Let’s face it. If it was that simple, would it have taken Fred Reichheld several hundred pages to explain it?

    • 12 Comments

      Hi Barry,

      Thanks for the thoughtful comment. I really just believe people forgot why we measure NPS without thinking about the problem we are trying to solve. You are trying to retain customers and acquire new ones. NPS should help determine the likelihood of retaining your customers and if they will refer new business to you. If the question you (as a business) are trying to answer is “What is the likelihood I will retain my current customers?” than there are many ways that answer can be sought. The industry relies too heavily on scores, scores are pointless. The context is king.

      • 12 Comments

        context is absolutely important. also, the only good data is actionable data. So, in isolation, an NPS score doesn’t tell me what to do. I’ve seen too many organizations proclaim a score. My response is “so what”? Thanks for the dialog.

  2. 12 Comments
    Todd Hixson says:

    Quite thought provoking Michael. Sometimes NPS reminds me of Nigel’s amp in Spinal Tap. It goes to 11! Hmmm–what if we just made 10 the highest? Answer–but it goes to 11. Seriously, if we look at NPs as a snapshot of a moment, is that a relevant test? I mean–I just got through with a fantastic customer experience with a rep. The product I am using is so so. I answer the survey that I would recommend due to my “Wow” experience, but the next week I try my buddy’s product, and it is awesome. I’m gone. Consequently, I am a long time user of a product that is second to none. I get a horrible rep on the phone, (probably one chewing gum, tweeting, reading blogs on linked in, playing Farmville.) I am miffed and trash the company–but I have no intention of trading the product–I just go to self -help. Both of these scores would be meaningless.–As always sir–loved the read! Totally peaked my interest.

    • 12 Comments

      Hi Todd,
      Great to hear from my main man deep in the heart of Texas. You are right, all surveys are snapshots which can be influenced by factors from the company to the individual’s personal life. Did you catch the person with “the case of the Mondays”? Or are the people who actually reply to your survey really the core of your business, or are they just the least busy or loudest? It’s all as mysterious as the Spinal Tap song Stonehenge 🙂 Hope all is well with you and the family. I really enjoyed your latest post on the ICMI blog http://www.icmi.com/Blog/2012/February/Have-You-Heard-Them-Being-Quiet
      Talk to you soon.
      Mike

  3. 12 Comments

    Love the title of your message. NPS is useful for what it is intended, but it is not a “Silver Bullet.” I don’t believe that support primarily exists to promote the next product, although we can be helpful. Measurements of csat and loyalty are better for our particular mission. You make a pretty good case for there being no “silver bullet’, only specific measurements (bullets) for specific things. On this, I wholeheartedly agree.

  4. 12 Comments

    Michael, great article! From the title I thought it was just another rant against NPS, but I really enjoy what you are saying: That NPS (or alternative scores) are only one part of the picture. And that’s true – you need to combine both the analytics and the score – and I like the idea of the social media thrown in.

    I know Jim and John, and can recommend their Human Sigma book. But it’s not really saying the same thing. Its message is more focused on what you need to measure on a location basis, as opposed to individual customer basis. It comes down to what are you trying to optimize – the individual customer or the location. Both are important, just different.

    Keep up the great work!

    Jim

  5. 12 Comments
    EJ van der Gronde says:

    Hello Michael,

    I agree what you are saying about NPS. NPS measures the intentions of customers not their actual behaviour. And NPS almost seems to good te be true. And anything to seems to good te be true, I think you should distrust.

    The graphs you are showing are almost an exact copy presented in the book Human Sigma by John Fleming and Jim Asplund. But on the x the talk about customer engagement and on the y about employee engagement. I can recommend this book to you because the authors deliver the (scientific) evidence over many years of research that high customer and employee engagement drive the financial outcomes.

    They also state the you should divide promotors in 2 groups: rational and emotional promotors. Their research shows that rational promotors don’t behave different than detractors in terms of value creation, retention, attrition etc.
    So we have to connect emotionally with the customer to benefit in terms I mentioned above.

    The evidence they are providing is very convincing so I believe that combining the score is indeed the “silver bullet”.

    • 12 Comments

      EJ – thanks for commenting here and on the LinkedIn page. I am definitely going to pick up the book Human Sigma. There really are so many ways to measure the likelihood of retention, mostly because we are people. People have thousands of reasons to change their mind daily. I am not sure there will ever be a perfect score (until we start physically plugging ourselves in). Thanks again.
      Mike

  6. 12 Comments

    Thanks for the feedback William. I know I will make mistakes, and I am ok with that.

  7. 12 Comments

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