At a CCNG meeting a few weeks ago, a discussion arose about the difference between customer satisfaction (CSAT), Voice of the Customer (VOC), and Net Promoter Score (NPS®). I reviewed the difference between CSAT and VOC in an earlier post. Let’s now look at the difference between Voice of the Customer and Net Promoter Score.
VOC is a market research technique pioneered by Abbie Griffin and John R. Hauser to provide insight into a customer’s needs, desires, perceptions, and preferences. For example, many Six Sigma companies conduct formal VOC studies to gather insights from customers before they develop a new product, service, or process. The information gathered is used to inform the design thereby closing the gap between customer expectations and the offering of the company. Today, many companies use the concept to measure customer loyalty over time.
NPS®, on the other hand, surveys customers with one simple question: “How likely is it that you would recommend this company to a friend or colleague?” Based on their scores, respondents are grouped into Promoters (score 9-10), Passives (score 7-8) and Detractors (score 0-6). The Net Promoter Score is the percentage of promoters minus the percentage of detractors. NPS® was developed by Satmetrix, Bain & Company, and Fred Reichheld, and popularized in Reichheld’s book, The Ultimate Question.
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Those of you who are already measuring NPS® can take this a step further and look at what’s called the Net Advocacy Score. Coined by Alain Samson of the London School of Economics and Political Science and published in the International Journal of Market Research, the Net Advocacy Score is calculated as the Net Promoter Score (which measures intent) minus Negative Word of Mouth, or the percentage of customers making very negative comments in the past 12 months.
A lesser known measurement but one that makes a lot of sense to me is the Secure CustomerIndex® developed by D. Randall Brandt, VP of Customer Experience and Loyalty at Maritz Research. A secure customer is one who is very satisfied with the service, definitely will continue to use the service in the future, and definitely would recommend the service to others.
Regardless of what you call it, the big question is, how do you improve your customers’ experience of your products and service so that they stay, buy more, and tell their friends? Net Promoter has some suggestions, Samson and his co-authors at the London School of Economics have an in-depth article titled, “Advocacy Drives Growth” which will give you some ideas, and TSIA recently hosted a webinar titled, “Beyond NPS®: Using the Secure Customer Index® to Measure Customer Advocacy.” Following some of these tips, Netezza, an IBM company and leader in data warehouse appliances, managed to improve their Net Advocacy Score 8% in 3 months. Mako Surgical, a medical device company, focused on securing customers and improved metrics 2-7% within 6 months, including a 5% increase in customers who would recommend Mako to a colleague.
According to Fred Reichheld, “A 5% improvement in customer retention rates will yield between a 20 to 100% increase in profits across a wide range of industries.” Sounds important to keeping the executive team and shareholders happy, right? So now that you know the definitions, it’s time to put them aside, roll up your sleeves, and start making the required improvements to satisfy your customers, keep them loyal, and turn them into secure promoters and advocates of your brand.