Following on from blog article – Keep it short, keep it focused we felt it appropriate to continue the discussion around keeping things simple when asking customer satisfaction questions. This article puts forward the argument that there is no such thing as the ‘ultimate question’.
With customer satisfaction surveys increasing in length, the marketing industry will always be seduced by statements such as ‘this is the single most reliable indicator of a company’s ability to grow’. However, is the Net Promoter Score (NPS) concept oversimplifying things and losing sight of what customer satisfaction and loyalty studies really aim to deliver?
The fundamentals of the Net Promoter Score are that every company’s customers can be divided into three categories: Promoters, Passives, and Detractors. By asking — How likely is it that you would you recommend us to a friend or colleague? you can find out how likely a brand is to be recommended, and it will provide a good indicator of how well it will grow.
Customers respond on a 0-to-10 point rating scale and are categorized as follows:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.
To calculate your company’s Net Promoter Score (NPS), take the percentage of customers who are Promoters and subtract the percentage who are Detractors.
Many large consumer brands have integrated the NPS into their customer loyalty programmes from Amazon, Apple and eBay through to Harley-Davidson, Google and Dell. However, despite its popularity amongst large corporates, research by Hayes (2008), "The True Test of Loyalty," Quality Progress, June 2008, shows that the "likelihood to recommend" question is no better predictor of business growth compared to other customer loyalty questions used over time e.g., overall satisfaction, likelihood to purchase again.
The attraction to the Net Promoter Score is its simplicity in that it requires just one question, it is easy to benchmark and implement across individual divisions or organisations as a whole. However the real driver of its ubiquitous use has been its claim that it is the only question you need to ask that tells you everything you need to know and this is where the problem lies. Word of mouth does not always boost sales and distribution and pricing can mitigate effects too.
In conclusion, there is no single question that can be used to monitor customer loyalty and satisfaction. NPS is a useful measure enabling changes over time to be tracked but a customer survey needs more elements to it to facilitate the changes to take place. Customer loyalty and recommendation behaviour are products of satisfaction with the total customer relationship from the product and service, they cannot be fully understood by one question.
The key to any customer satisfaction and loyalty survey is about understanding how satisfied customers are, why they think the way they do and how change can take place to increase satisfaction and loyalty in the long-term.
The Net Promoter Score has been around for over 5 years now and was announced as the ‘ultimate question’. Tracking a number over time is only a marked indicator and does have its values but the real work is understanding what makes customers satisfied and loyal and then delivering that through change management.