How much simpler would life be if the answer to just one question gave us all the customer satisfaction insight we needed?
Since the advent of the net promoter score (NPS) in 2003, many managers have made this metric the focal point when monitoring customer satisfaction. It’s obvious to see why it quickly became the industry standard for measuring customer loyalty:
- It’s simple. Consisting of one question (“How likely are you to recommend this business to a friend or family member?”), and an optional open-ended follow-up, it is easy to both ask and answer.
- It’s easily understood. A simple calculation yields one number: the percentage of your customers who are Promoters (as opposed to Detractors or Passives).
- It’s easy to use. The score’s sole focus on creating satisfied customers makes it easy to implement and interpret, with results from day one and no need for experts to analyze.
Because customer satisfaction, heavily influenced by customer experience, can have a significant impact on the bottom line, it’s no wonder that marketers at organizations large and small have flocked to this deceptively easy “ask and answer” for improving financial performance. But while it works – and the data shows good NPS scores do correlate to customer loyalty — many managers expect too much from it.
The Problem with Solely Using NPS
While it’s a great tool for benchmarking customer satisfaction, NPS does not provide comprehensive data; it’s only one component of a complete measurement model. Why, you might ask? And that’s the answer: NPS doesn’t tell you why account holders may be satisfied or not.
It doesn’t tell you what’s working and what’s not, in the eyes of the account holder.
What’s driving account holders’ answer to that one simple question? What do Detractors not like about your financial institution? Why are Promoters giving you a 9 or 10? What would it take to turn a Passive into a Promoter?
NPS is an outcome metric. It’s only a measure of a customer’s loyalty, not their overall satisfaction with your financial institution and its products across the board. Managers also need to identify the process metrics that are causing that outcome.
Do This Instead
Banks and credit unions need additional metrics to determine what’s behind a high or low NPS score. Without a full 360-degree look at account holders’ experiences and interactions, managers are relying, and acting on, incomplete information.
There are a number of other effective metrics that can be used to get a complete customer view. These include the Customer Satisfaction Score (CSAT), measuring customer satisfaction with a specific transaction, product or service; the Customer Effort Score, measuring how much effort a customer felt they expended in purchasing a product or resolving an issue, and; Forrester’s Customer Experience Index (CX Index), that specifies if and how a customer’s needs were met, how they felt about it and if they enjoyed the overall experience.
There’s no denying the value of NPS for most financial institutions, but it’s only the first of many questions to continuously ask as part of a comprehensive customer satisfaction measurement program.
Click here to learn more about Vericast’s Voice of Customer.