This article originally appeared on LinkedIn.
Too many companies confuse the goal of enriching customer lives with the tool to help achieve it, the Net Promoter Score®. They further confound their employees by tying bonuses to NPS, converting the tool into the objective for frontline brand ambassadors.
Let’s take a step back. The goal of the Net Promoter System® is not to increase your Net Promoter Score. The goal is to increase the number of customer lives you enrich on a sustainable basis. After all, the ultimate objective, the purpose of any great organization, is to improve people’s lives. The NPS categories of promoter (those who award a 9 or 10 out of 10 when asked how likely they are to recommend a company), passive (those who give a 7 or 8) and detractor (6 or below) simplify the definition of success or failure, and help companies track progress toward the true goal.
These categories make common sense. Promoters feel their lives are enriched. Passives got what they paid for but nothing more; their lives have been neither enriched nor diminished. Detractors received less than they expected for the price they paid, and they feel their lives diminished as a result.
Using a short survey to gauge a customer’s happiness has proven practical and effective. The survey provides instant feedback that can be a reliable indicator of success or failure. By supplying that timely feedback, the survey approach makes it possible to close the loop with promoters, passives and detractors; probe root causes; and test improvements. But a customer’s answer to a survey at one moment in a relationship doesn’t guarantee that he or she has been correctly characterized overall as a success or failure for the company—as a life enriched or diminished.
In today’s overly surveyed world, where gaming and score manipulation run rampant, it’s critical that we cut back on survey requests and use other data sources to estimate customers’ promoter/passive/detractor status. Part of the solution requires tracking operational data, such as the number of times a customer calls the service center. A bank that’s declined someone’s credit card three times this week at the point of sale should know the customer is frustrated. It doesn’t need a survey to figure that out.
Observing operational data and actual customer behavior—things like repurchase rates, average size of purchase, purchase frequency, number of referrals, and online postings and ratings—makes it possible to better estimate their true promoter/passive/detractor status. We call this approach “signal NPS.” Signal NPS can reduce the need for survey NPS and augment its accuracy. Capturing this data and then integrating it with survey NPS is becoming more practical with the development of sharper and sharper big data tools.
Signal NPS can highlight apparently happy or unhappy customers, but getting to the “why” behind customer behavior requires a nuanced approach undertaken over time. Observation is part of that, and so is engaging in direct dialogue with the customer, often through surveys. In combination, all of that input should help companies substantiate, recalibrate and explain customer NPS ratings.
As companies deepen their understanding of the customer, the overarching goal must remain the same: to determine if they have enriched or diminished the customer’s life, and to take action based on that insight. Survey NPS, augmented and integrated with signal NPS, is the right approach. But no matter how good a number these refinements produce, don’t fall into the trap of treating the score as the objective. It’s not about the score!
Net Promoter®, Net Promoter System®, Net Promoter Score® and NPS® are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.