Creating a Customer Centric Culture: How to Use NPS to Its Maximum Advantage

NPS is the industry standard for measuring customer experience and loyalty. However, while many organizations across industries believe that they’re using NPS methodology to its maximum advantage, the reality is – they aren’t.

First, research continues to support NPS as a leading indicator of future financial performance. When used in combination with your financial metrics, you can understand how your customer experience impacts customer lifetime value. This provides a forward-looking indicator of business health. Often organizations have an “ah ha” moment when they put NPS/Customer Experience into the context of customer retention and acquisition. An out of balance focus on attracting new customers, while your current ones are exiting and detracting others, will lead to disappointing financial outcomes.

Secondly, the segmentation of Promoters, Passives, and Detractors mobilizes an organization around the customer. Everyone in the business can understand the concept of making more Promoters, and reducing Detractors. This is much more engaging then trying to explain how individual efforts of your employees impact some illusive loyalty index.

NPS provides not only performance assessments around specific events or transactions, but can also help you understand how those events fit in with a customer’s overall brand perception, along their entire customer journey. This provides a forward-looking indicator of both general business health and highlights key areas of future focus.

So how can organizations fully leverage NPS methodology to greatest effect?

Use NPS as an Overall Brand Relationship Measure

The original research behind NPS proved that financial performance is predicated on an overall relationship measure. This “overall relationship measurement” refers to the end-to-end customer journey and relevant brand attribute scores with respect to how they affect loyalty and, ultimately, buying and referral behavior.

Organizations frequently misuse NPS in a transactional environment – NPS is a brand measure that encapsulates all customer touch points – it’s not typically a measure of a single interaction. It’s misleading – and unfair to customer support employees – to evaluate the quality of a given customer touch point. For instance, if you’re using NPS to measure the quality of the service delivered by the call center, it’s critical to evaluate these scores within the broader context of brand satisfaction – because if customers are dissatisfied with the product, the real source of the dissatisfaction may not lie in the customer support experience. You are better served to measure the call center employee on the attributes that they control and that you know will drive higher NPS.

Monitor NPS Continuously to Achieve Customer Centricity

Many organizations measure NPS annually and have no ongoing listening strategy that keeps customer experience integrated into real-time everyday business metrics. Effective customer experience management requires daily monitoring – the understanding of how specific interactions create promoters, passives and detractors as events unfold inspires employees to transform customers into promoters each and every day. Daily monitoring mobilizes customer centricity, because daily transactional measures identify timely “moments of truth” to empower employees to deliver a better overall brand experience.

To compliment your daily transactional listening, relationship NPS should be measured quarterly at a minimum to keep it integrated and aligned with your quarterly financial measures. While transactional measures help optimize individual customer touch points, relationship NPS is the measure that will link to your financials. Annual measures of customer satisfaction are out of synch with the business – once you detect what’s happening the damage is already done and you have churned your detractors. This consideration is particularly important in B2B environments where relationship NPS is most often attributed to decision makers vs. transactional which often has a bias to end-users.

While some have tried to create negative perceptions of NPS to advance their own less-proven measures of customer satisfaction, the truth is that it’s not the measurement system – it’s knowing the difference between merely measuring vs. using the methodology to drive a customer centric culture.

The process is analogous to losing weight. Simply stepping on the scale will not change the outcome – losing weight requires behavior change, which in the Net Promoter environment means monitoring daily interactions and mobilizing your team to create more Promoters. That’s the true power of NPS, and companies that use it properly are the ones that achieve the best results.

Optimize individual touch points through transactional measures, monitor relationship NPS at least quarterly, and link NPS to your customer lifetime value model to put everything in the context of business performance. Your NPS is an outcome of the management framework you deploy from the frontline to the boardroom.