In our last post, we covered the difference between customer satisfaction and customer effort score. Both of those metrics are good for examining transactional elements of the customer experience.
As we discussed, the best customer experience metric for your business is a matter of finding the best fit for your business.
In this post, we’ll take a look at two more advanced fits: Net Promoter Score and customer engagement.
Using Net Promoter Score
Net Promoter Score (often abbreviated as NPS) is a measure of a customer’s likelihood of recommending you to another person or company. It’s measured by responses to one question:
“How likely is it that you would recommend [Company Name] to a friend or colleague?”
The response choices range from 0, “not at all likely,” to 10, “extremely likely.” Each respondent is then placed into one of three groups:
- Promoters, who give 9’s and 10’s on the 11-point scale;
- Passives, who give 7’s and 8’s; and
- Detractors, who give any score from 0 to 6.
To get to the Net Promoter Score, you take the percentage of Promoters and subtract the percentage of Detractors. Net promoter scores vary by industry and hence, targets should be set according to benchmarks and norms.
Net Promoter Score takes a different tack than the transactional metrics we discussed in the last post. It’s more relationship-driven than the customer effort or customer satisfaction metrics reviewed previously. In order for customers to actively promote a company, those companies must achieve a level of trust, understanding, loyalty, and delivery that extends beyond meeting basic customer needs.
Think about your own network. What would it take for you to vouch for someone else? You need a level of trust they will live up to your word.
When should you use the Net Promoter Score? Here are a few examples:
- When you’re examining your position in the industry.
- When you’re interested in growing referral business.
- When you need to manage negative word-of-mouth.
- When you want to benchmark your customer experience as a whole.
- When you need a simple metric that the organization can rally around.
Using Customer Engagement
Customer engagement is a deeper, more complex measurement than that offered by the Net Promoter Score. Our research shows it's a better predictor of overall business success, as it includes behavioral and emotional attitudes toward the customer experience.
As we define it, customer engagement is based on four factors:
- Retention, or the likelihood of the customer continuing to do business with the company.
- Extra Effort, or how likely it is for the customer to go out of their way to do business with the company in the future.
- Advocacy, or whether the customer will refer his or her network to the company.
- Passion, or the customer's emotional response to the experience.
Again, if you consider the wording, you may recognize that customer engagement goes beyond meeting needs. As such, customer engagement is useful for gauging ongoing interest, loyalty and the deeper, more emotional response to the customer experience.
Here are a few examples when customer engagement works well as a metric:
- When you need a baseline for developing customer experience strategies.
- When you're measuring progress toward long-term goals.
- When your industry precludes referral business.
- When you want to dig deeper into the layers of customer loyalty.
Finding What Customer Experience Metric Works Best
When selecting a measurement for customer experience improvement, you should also consider other aspects of your business that relate to the challenge, including:
- The likelihood of adoption: Will employees understand and back the metric?
- Executive buy-in: What will your executive team respond to?
- Long-term vision: What are your long-term goals, and how will the customer experience help meet them?
But what if you're stuck?
In that case, we can recommend one thing: flip a coin.
The fact is, if selecting your key customer experience metric is stopping your company in its tracks, then pick a metric and get moving. You won't see the benefits of listening and responding to customer feedback until you get started. Measure whatever you can, and then adjust as you go.
Want to learn more?
You can subscribe to our blog for more insights. If you're after more answers, you can also check out our Voice of the Customer FAQ page, which answers common questions about customer experience improvement:
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Posted on 10-22-2015