Take A Good Look At How You Measure Loyalty - Are You Missing The Point?

For years, companies have been seeking to find and use a simple way to quantify customer loyalty. One example is Net Promoter Score (NPS), which identifies three customer categories: promoters, passives and detractors. Keeping things simple, both for the customer and the company, is a big advantage of NPS and similar models. Asking a single question, such as “how likely are you to recommend our company to your friends,” can help identify which of your customers are your brand promoters, passives and detractors. 

Having one key voice of the customer (VoC) metric to track and benchmark over time, across departments, competitors and even industries is also easier for executives to digest. In fact, a well-known early adopter of the model set out to achieve an NPS score 10 points higher than any competitor in its space—a simple metric to rally around. 

There is a challenge with the NPS model, however. By collapsing the responses into three groups, and then further into a single average score, you may lose valuable insight. In today’s increasingly customer-centric environment, asking for feedback implies that you plan to do something with the input collected. If you don’t plan to take this information to heart or can’t afford to proactively follow up, asking for feedback can cause more damage than good. This may particularly be the case with your detractors. 

Even supporters of the NPS model agree that simply asking one question without any additional detail or follow up is not enough. But if a customer rates your organization a zero and doesn’t tell you why, it’s not very actionable. Monitoring a metric you don’t know how to improve upon can be frustrating. So many companies add questions to their NPS survey to try and identify the drivers of high and low scores. Although adding too many follow-up questions can impact the attractiveness of the simple one-question survey and can significantly reduce the customer response rates. 

There are also organizations that try to follow up with survey respondents via a call or email. This allows them to collect additional richer insight, supporting what drove their response. At the very least they try to set up a service recovery and customer retention process to reach out to their detractors. And, in some cases, these companies have managed to switch past detractors into new promoters. Others engage with their promoters by inviting them to be part of an advisory council or customer panel, designed to garner more insights and further encourage them to become advocates of the brand.

Understanding the Customer Experience 

Keeping customer surveys short and simple is critical, because consumers are bombarded with multiple requests from almost every provider they use. This makes creating a brief survey about willingness to repurchase, purchase more, or recommend a good starting point. But, does it provide a full understanding of the entire customer effort and journey, which are critical factors for companies looking to impact the customer experience?   

By adding even a single open-ended question such as, “how can we improve,” companies can significantly expand the actionable detail they collect. It’s important to keep in mind that for larger organizations to make this approach scalable, they need a solution that can mine unstructured comments (i.e., text analytics for mining text comments, and speech analytics for mining recorded voice comments). 

Going Beyond NPS and the Survey Channel

In order to gain a complete understanding of the customer journey—while also “listening” to customers who may not leave detailed comments or respond to surveys—consider looking at other customer touch points.  

An effective VoC program needs to go beyond survey responses and collect and mine other customer touch points such as voice, email, web, chat, branch and social media. Today, all these interactions leave a digital trace rich with insight that can provide a full picture of the key drivers that make customers loyal, angry or simply passive. Customer experience leaders can use NPS or other metrics to track loyalty, but need to dig deeper to map their customers’ entire journeys. Understanding and impacting the entire customer experience across all touch points is the real key for a company’s growth.

2 comments about "Take A Good Look At How You Measure Loyalty - Are You Missing The Point? ".
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  1. Robi Ganguly from Apptentive, November 1, 2013 at 8:58 p.m.

    This is great advice for every organization. Another piece of the puzzle to think about is that in addition to being bombarded with multiple requests, consumers are increasingly glued to their mobile devices. What are companies doing to utilize this amazingly personal channel to connect and better listen to their customers? On mobile devices, consumers spend a large amount of time connecting and conversing with their friends - the opportunity to do so with companies is enormous. Companies that embrace this viewpoint and move to mobile fast will take an inordinate amount of consumer mindshare.

  2. D. daniel Ziv from Verint, November 4, 2013 at 5:03 p.m.

    Thanks Robi,
    Obviously mobile is a critical platfrom for multichannel interactions, not just 24 hour phone channel, but also web, text, apps etc. Mobile also enables proactive customer engagement at the right place and the right time, and will play an increasingly important role in managing and impacting the customer experience and journey.

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