This must, somehow, be the season for looking at the real and granular actionability associated with marketing, brand, experience, and communication performance metrics. As someone who has done a great deal of b2b and b2c developmental research into drivers of brand equity, messaging effectiveness and customer behavior, especially with respect to the evolving decision-making landscape over the past decade, I have generated a number of blogs and articles on the detailed application of metrics, including:
http://www.customerthink.com/article/customer_advocacy_behavior_personal_brand_connection:
http://www.customerthink.com/blog/gathering_and_leveraging_customer_decision_insights_what_the_future_may_hold
http://www.customerthink.com/blog/an_open_letter_and_question_to_all_b2b_and_b2c_marketers_how_well_do_you_really_identify_unders
A few weeks ago, I shared observations about the Customer Effort Score, or CES: http://www.customerthink.com/blog/its_time_to_get_really_serious_about_performance_metrics_what_works_what_has_challenges_and_why In this post, NPS, as a concept and metric, will be addressed based on recent findings presented by the insights manager of a prominent retailer, Jiffy Lube.
A recent Advertising Age article – http://adage.com/article/dataworks/jiffy-lube-net-promoter-score-goose-sales/243046/ – described the predictive limitations of NPS, as a standalone metric, for the Jiffy Lube service centers on a systemwide basis. As noted in the article, “…the overall NPS rating had almost no correlation to return visits. That meant customers who said they’d gladly recommend Jiffy Lube to friends didn’t necessarily return to the store themselves.”
However, because a high percentage of Jiffy Lube franchisees participate in the organization’s customer satisfaction research program, the insights manager used the added step of bringing in an outside consultant to apply text analytics software to the one-third of its 400,000 customer surveys who provided comments. When text analytics and NPS were dually utilized, linkage could be established between sales and return visits, vis-à-vis issues that these commenting customers identified.
It was the fusion of text analytics with NPS that actually helped Jiffy Lube identify key elements of the customer experience, and downstream behavioral drivers, And, that combination has enabled Jiffy Lube to significantly increase per-store sales. In the article, Forrester analyst Harley Manning noted that too many companies use NPS as a one-number indicator of how well the brand is doing, without knowing why the score is rising or falling. He added: “You have to do the work to find out what the drivers of the score are. Then when you figure that out, you have to tie them to specific practices.” In other words, some out-of-the-box thought has to be given to how NPS can be applied to touchpoint, brand, and communication improvement.
Many other customer experience and behavior experts, including Bob Thompson, Wim Rampen (http://wimrampen.com/2012/05/11/sorry-nps-im-not-buying-it/) and Bob Hayes (http://businessoverbroadway.com/unmasking-the-problem-with-net-scores-and-the-nps-claims) have addressed issues associated with NPS as a simple, and universally applied, performance metric. And, there have been an array of academic research studies speaking to the actionability problems with the metric, relative to its claims over the years (Keiningham, T. L., Cooil, B., Andreassen, T. W. & Aksoy, L. 2007. ‘A longitudinal examination of net promoter and firm revenue growth.’ Journal of Marketing, 71, 39-51; Sharp, B. 2008. ‘Net promoter score fails the test: market research buyers beware.’ Marketing Research, Winter, 28-30; East, R. 2008. ‘Measurement deficiencies in the net promoter score.’ ANZMAC. Sydney, Australia, etc.) So, there are both supporters and detractors for the Net Promoter Score as the only number needed for growth; and they can certainly voice their own perspectives.
Much more than insufficiencies of individual performance metrics, especially when they appear simple and universal, what’s largely at issue is the complacency, risk aversion, and ‘lemming effect’ often ascribed to marketing, customer experience, and brand research professionals, sometimes accurately and sometimes not. A lesson of the Jiffy Lube application is that a small infusion of analytical creativity can go a long way
In addition to the research cited in this post, my company, ForeSee, found that Net Promoter Score overstates detractors by 299% on average for the 100 largest brands in the U.S. (the full report is available for download at http://wordofmouthindex.com/womi-research/womi-research-top-100-brands-edition/).
With the goal of building and improving upon NPS, ForeSee also recently introduced the Word-of-Mouth Index (WoMI), a groundbreaking measurement that augments NPS by adding a second critical question: "How likely are you to discourage others from doing business with this company?” The WoMI calculation weighs and incorporates both positive and negative word-of-mouth for a more precise, accurate and actionable picture.
The important thing to remember is that there is no single measurement that can be relied upon for everything. Instead, I would encourage companies to thoughtfully adopt a system of measurements that measure the total customer experience so they can see how various changes can impact satisfaction levels, as well as future business performance.
….both of which are algorithms I helped create, and both of which incorporate incidence and degree of positive and negative word-of-mouth (as well as brand favorability level, and related elements): http://www.customerthink.com/article/customer_advocacy_behavior_personal_brand_connection Over the past few years, Satmetrix and Bain have endeavored to ‘annex’ the concept of customer advocacy behavior, claiming that recommendation and advocacy are identical. The two concepts are not even remotely close. It’s entirely possible to recommend a product or service and have low future future purchase intent; and, in fact, customer behavior research in multiple business sectors repeatedly shows that this frequently occurs.
….we’ve been able to achieve, in multiple b2b and b2c verticals, using customer advocacy and customer-brand bonding research frameworks. If you could respond to my email address – [email protected] – I’d be glad to send you some of my presentation and white paper content. Given that I note some synergy in our thinking here, there may be an opportunity for us to collaborate