The Net Promoter Score rapidly became a reference for businesses aiming to improve their customer experience through a simple question: “How likely are you to recommend us to a friend?”
The power of NPS lies in its straightforward approach to capturing customer sentiments, which clearly indicates the current state of your company. Businesses with high NPS scores tend to outperform competitors, attracting more customers through positive referrals and increasing the loyalty of existing customers.
In today’s customer-focused era, NPS has a profound impact on customer satisfaction, retention, and revenue growth. Business owners seeking to elevate service quality and foster sustainable growth find NPS indispensable.
The Issue: Net Promoter Score Limitations
While the Net Promoter Score offers numerous benefits, its limitations have a significant impact on the results and efficiency of the tool. As an executive, these elements should reflect the issues you encounter with the tool and what prevents you from reaching the full potential of your business.
- Limited Problem Insight: NPS is just a number; it doesn’t provide detailed information on specific customer issues, making it hard to target precise improvements. Without understanding the factors driving customer sentiment, it’s difficult to implement specific improvements or to truly understand what aspects of their product or service are falling short.
- Score Fluctuations: NPS can be sensitive to external events or minor changes in customer experience, leading to potentially misleading fluctuations. It represents a picture of the current state of customer sentiment and does not allow consistent and reliable monitoring over time.
- Score Manipulation: Pressure to maintain or improve NPS scores can lead to practices that manipulate how scores are collected or encourage higher ratings, thus compromising the integrity of the results. Profit-sharing agreements or bonuses incentives could add a bias for employees that could confuse the means (NPS) and goal (increasing customer satisfaction).
- The Survey Method: The Net Promoter Score requires a survey that can be time consuming and costly. The sample can be biased and with the increasing number of reviews, it can create a survey fatigue that could result in less reliable data.
There are two targets of the Net Promoter Score:
- The Customer NPS measures customer loyalty and satisfaction by asking how likely they are to recommend the company,
- while Employee NPS (eNPS) measures employee satisfaction and advocacy by asking how likely they are to recommend their workplace.
In other words, NPS tests the attractiveness of the company to customers, whereas eNPS tests the trust and commitment of employees within the company. Both scores indicate the engagement level internally and externally at a given moment in time.
However, while they provide valuable observations, their usefulness for actionable insights is limited. It’s like trying to drive while only looking in the rearview mirror; much harder to steer and navigate! What if we could predict what could happen rather than relying on past static snapshots? What if we could shift from the rearview mirror to looking straight ahead with a clear view of the road?
The Turning Point: C.A.R.E.™ Model
To shift from an observed NPS to a predictive NPS, the solution lies in the C.A.R.E.™ model.
This process involves breaking down the key elements of NPS and eNPS and integrating the four components of C.A.R.E. (Camaraderie, Authenticity, Reliability, Ease). Based on this foundation, we have established KPIs for each aspect, allowing us to gain precise insights and effectively manage both employee and customer engagement.
- We maintain the simplicity of the NPS by keeping an overall number, while also having precise recommendations on how to improve this score, all based on reliable and numerical data.
- Detailed data collection offers a comprehensive and stable set of metrics that capture the nuances of customer and employee experiences over time, reducing fluctuations, variability, and uncertainty.
- Using multiple metrics reduces reliance on a single indicator, mitigating the risk of score manipulation. By incorporating a broader range of KPIs, the approach promotes genuine improvements and aligns incentives with true performance.
- To address the limitations of the survey method, we use real-time metrics that combine both quantitative and qualitative data, allowing us to gather comprehensive insights internally without solely relying on customer feedback. This ensures a proactive approach to anticipating and addressing future issues.
The Solution: C.A.R.E.™ Dashboard
In response to the limitations of the Net Promoter Score and to help business leaders make better strategic decisions, we are introducing the C.A.R.E.™ Dashboard—an innovative tool that transitions from an observed NPS to a predictive NPS, offering a more comprehensive understanding of employee and customer satisfaction and loyalty. Using the dashboard guarantees awareness of your company’s current state as well as the ability to anticipate future challenges.
“Build trust, Boost your audacity, Out CARE the competition.”
Stay tuned for the next article!
