and done some stuff with some people but today I want to talk to you about Net Promoter Scores. We’ll look at what they are in a sec but before we do that can we have a show of hands. Who knows what Net Promoter Scores are? 2
the Net Promoter Score (NPS) Frederick F Reicheld - creator of Net Promoter Scores. His big thing is his work on the subject of customer loyalty and business 3
One Number You Need to Grow” Havard Business Review (December 2003) “Most customer satisfaction surveys aren’t very useful. They tend to be long and complicated, yielding low response rates and ambiguous implications that are difficult for operating managers to act on. Furthermore, they are rarely challenged or audited because most senior executives, board members, and investors don’t take them very seriously. That’s because their results don’t correlate tightly with profits or growth.” In the article Fred says that the senior management don’t take much notice of customer satisfaction surveys because the results were too hard to easily digest and took too long to organise. He also said that the outputs of the surveys didn’t usually reflect how well a business was doing in terms of profit 5
This is his theory and the central principle behind NPS. He claims that the more loyal the customer the more likely they are to come back and buy stuff from you again and the more likely you’ll be to tell your friends and they’ll buy stuff from you. Quite a simple theory. Make customers happy, they’ll stay loyal and tell their friends to use your service as well. But the question is how do you easily measure loyalty in a way thats easy for the big bosses to understand? This is where Net Promoter Scores or NPS come in. 6
you would recommend our company/ product/service to a friend or colleague? Hands up who has seen this question in a survey? You see it absolutely everywhere and If you’ve ever filled the survey out you’ve contributed to an NPS score and made a middle manager somewhere either happy or sad. This is how it normally works and how NPS helps you measure loyalty. 7
you would recommend our company/product/ service to a friend or colleague? 1 2 3 4 5 6 7 8 9 10 0 Typically an 11 point scale is used and respondents are asked to mark out of ten how likely they are to recommend a service to a friend. With 10 being the highest score and most likely to recommend and 0 the lowest. 8
you would recommend our company/product/ service to a friend or colleague? 1 2 3 4 5 6 7 8 9 10 0 Passives Promoters Detractors Promoters - Loyal customers who will promote your brand to others and most likely keep buying Passives - Satisfied but unenthusiastic customers. Vulnerable to move to competitors. Detractors - Unhappy customers that will damage your brand and impede your growth through word of mouth 9
you would recommend our company/product/ service to a friend or colleague? 1 2 3 4 5 6 7 8 9 10 0 Passives Promoters Detractors Detractors (%) - Promoters (%) = NPS Score (Max NPS Score = +100 Min NPS Score = -100) To calculate the NPS score for a product or service we discount the Passives and convert the Detractors and Promoters to a percentage and subtract the Promoters from the Detractors leaving the NPS score. 10
answered the question “On a scale of 0-10 how likely would you be to recommend this product to a friend?” Detractors Passives Promoters So lets imagine that 140 people have completed your survey in November and fall under the following categories 11
against a competitor. Satmetrix is the name of the company which owns the NPS process and they publish a series of annual reports for various industries. Heres the one for US airlines for 2014. According to Satmetrix a score of 21 is pretty good so if we were an airline we’d be pretty pleased with a result of 28. So in a nutshell thats NPS and how it works now lets look at some of the advantages of NPS as a system. 18
NPS? • Easy to understand measure of loyalty NPS is very popular with senior management because it is so easy to understand Its also used as a KPI in many organisations Interesting use of happiness and loyalty as a metric 19
NPS? • Easy to understand measure of loyalty • Potentially high response rate Because of its simplicity you will more likely see a larger response rate as oppose to a traditional customer satisfaction survey 20
NPS? • Easy to understand measure of loyalty • Potentially high response rate • Gets senior stakeholders thinking about their customers NPS gets management thinking a bit more about the customer as well as the bottom line. NPS scores at least gives them something easy to hold onto which they can think about alongside their other metrics 21
NPS? • Easy to understand measure of loyalty • Potentially high response rate • Gets senior stakeholders thinking about their customers • Continuous measurement and recording Because the NPS survey is always live its easy to get a snapshot and measure against previous scores 22
NPS? • Easy to understand measure of loyalty • Potentially high response rate • Gets senior stakeholders thinking about their customers • Continuous measurement and recording • Seen as a replacement for traditional surveys Traditional surveys are long winded and have a low response rate. NPS surveys can be gathered from multiple sources and quickly analysed saving time and money 23
BAD So we’ve talked about what NPS is and what its good for. As I’ve been talking you’ve probably been thinking of a dozen reasons why NPS is maybe not such a great idea. So lets talk about a few 24
October 2014 “Various research, including the work that provides the conceptual basis for the entire Net Promoter Score methodology, has found a weak link at best between a self-reported satisfied customer and repeat purchases from that customer.” Micah Solomon wrote in Forbes magazine recently that there isn’t much evidence to support that customer loyalty equates to repeat business and therefore profit. This is especially true today where customers flit between various providers of phone, tv, BB etc. finding the best deals. 25
article which says even if customers are happy with you they’ll change anyway. So what you need is a company strategy which doesn’t care much about its customers or their loyalty kind of like … 26
brands but they’ve gone from flying 200,000 people per year to over 87 million so clearly they’re doing something right. So what other some other reasons why NPS isn’t such a great tool. 27
the reasoning behind the NPS figure. Why do people think your product is good or bad? Without further investigation the numbers in isolation are a bit useless To make informed decisions senior management need to know the meanings behind the numbers To be fair Satmetrix say that you should follow the survey with an open question but that info is hard to correlate and turn into a number. 28
to be had that NPS oversimplifies the scoring by reducing the 11 point scale you asked the customer to score against down to 3 (detractors, passives and promoters) then ignoring the detail in the score 29
are low (very low) even when they are only one question. A company I worked with recently had a site with millions of monthly uniques on their website but the click through rate on the NPS survey was less than 1%… this wasn’t accidental though 31
the response rate was so low was because the NPS survey was deliberately hidden to ensure a low response because the middle management knew the product wasn’t very good. The survey was also introduced at the end of the user journey when they knew that the customer would be most likely to be happy and they only surveyed existing customers. 32
is that bad why don’t companies ditch it all together? The advantage of having that simple to understand metric out weigh the negatives but with a bit more thought NPS can be made to work to provide a better insight into your customers. I’ll show you a few examples now of taking the NPS idea to the next level but with a UX slant. 33
Its great you should. They talk a bit about NPS in there and use a case study at Autodesk to show how NPS can be improved by adding three more simple questions. 34
Ease of Use THREE ADDED QUESTIONS They suggest adding three more questions to look into customer satisfaction as well as loyalty. The questions are on the Quality of your product, its value and its ease of use and are marked and calculated on the same 11 point scale 35
Maintain Low Gain • Ease of use • Quality • Value It gets a bit complicated here but by using multivariate technique called multiple regression analysis to determine which aspects of your product are having the biggest impact and allow you to prioritise accordingly. If you read the book it tells you the maths behind it but I’m not clever enough to explain it here! We could probably do things a little easier than this though and have a similar effect. 36
don’t like NPS because they feel its unactionable, the 1-10 scale doesn’t work because people don’t think that way and they question the link between NPS scores and growth. They have a great blog post on the topic of NPS and it they talk about reducing the NPS idea to this 37
anyone? • No • Yes, and this is how I described it: ______ A simple yes and no question with a follow on. They also suggest a similar open response for the No response. They say that the response correlates with their turnover like with NPS but they also get the additional benefits of the open response. I quite like their simple response but I think it could be even better. 38
And finally lets look at how Manchester City Council have implemented a version of it on their website. Same three categories ( detractors, passives and promoters) but a couple of drop downs to help flesh out the responses and a response field for further details. The other benefit of this approach is you can isolate exactly on the website where people have problem with the product. 39
combine the Manchester City Council approach to NPS with something like what the gov.uk have done with their dashboard pages for user needs and metrics? Then you’d really get a sense of how well your site is working and how happy your visitors are. 40
simple tool for measuring and tracking customer loyalty/ satisfaction/ happiness… • …If its implemented correctly and at the right time • Online it can be used to gain feedback at key points in the user journey • Have an aggregated score and a more detailed score • Add additional metrics to gain further insight to the score So here are some takeaways and final thoughts 41
| www.matwalker.co.uk So that was a quick overview of the NPS process. I’m interested in the idea of continuous feedback loop from customers or visitors so I was wondering what thoughts people had about NPS 42
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