Medallia partnered with CX Network to host a live webinar featuring an interview with the creator of the Net Promoter® system, Fred Reichheld and Medallia’s director of professional services, Matthew Churchill. In this blog post, we’ll take a look at some of the top costly CX failures and how to rectify them, as explored in the webinar.
Net Promoter Score®, or NPS has become a ubiquitous and universal way of measuring customer satisfaction. In fact, it is the keystone metric for over 70% of Medallia customers, which likely reflects the average of large businesses around the world. And it’s no wonder; calculating the number of Promoters, Detractors, and Passives is a useful shortcut to gauge customer experience and business growth.
However, the founder of NPS himself, Fred Reichheld laments that we are now over relying on the score. This is especially true when the score becomes the end itself, rather than a means to an end, and companies stop thinking about it simply as a tool to build better relations, learn from feedback, and monitor the impact of improvements. It’s also harder to get this metric right than it might seem – sample sizes, timing, culture and wording all affect NPS outcomes.
NPS may not be the be-all and end-all, but it can be good to reward executives for high NPS since they’re in a position to make significant changes. On the other hand, studies and observations show that frontline bonuses linked to NPS can lead to unintended consequences: employees trying to game the system, or getting frustrated and quitting because it becomes just one more way to get in trouble – rather than a tool to get better.
The businesses who have the greatest success using NPS are the ones that empower employees to take action based on the feedback they receive, rather than reward or punish them for it. If an employee gets a detractor, they should have the ability to reach out to the customer, find the root cause, and try to rectify the situation so the customer feels cared for. If you take that conversation back to the analytics team in real time, it can provide a valuable opportunity for discussion and new learnings. That accomplishes much more good than any bonus ever could.
While headquarters are tasked with sorting through masses of data to find patterns, branches have the ability to follow up with individual customers. And it doesn’t have to just mean exceptional cases of angry detractors, either. On the contrary, many customers who are happy overall and leave high feedback scores still wish to provide unstructured comments. For example, a retail customer can write that he’d like the supermarket to restock his favorite beer that’s been out of stock for a while. That branch manager can call him and let him know it’s been re-ordered, creating a delightful and unexpected moment.
Sure, having dozens of questions on a customer survey makes it easier for insights teams to run analytics on it. But consider the burden it places on the customer. It’s unlikely they want to wade through tons of irrelevant questions to get a chance to express their real concern, if they have one. It’s better to ask two or three open-ended questions to allow customers to share their experience quickly and in their own words.
Often, companies are reluctant to give their frontline employees access to customer feedback. But refraining from doing so means employees miss out on the opportunity to learn from comments, and suggest improvements. The essence of the NPS system is to help your organization focus on enriching the lives of customers. If you don’t have feedback delivered to employees in real time to help them get better, it will be hard to live up to that goal.
It’s one thing to collect customer feedback, but what about what happens next? Too many companies ignore the repeat complaints that come up in customer surveys and team discussions. There are some issues that can be solved by the individual frontline employee or team, but sometimes you need cross-functional solutions, senior investment in IT, or changes in policies and procedures. If you tell your frontline teams that you really care about delighting customers and they should make that their top priority, and you don’t give them a way to escalate the issues they can’t solve, they will quickly lose momentum. Employees need to have a way to surface the issues that they are most concerned about, and then hear back from executives about what is being planned to rectify them.
What it all comes down to is making sure there is genuine care for the welfare of customers, and not just in a quantitative sense. A machine algorithm can produce an NPS score, but unless you give your employees – both frontline and c-level executives – the confidence and the tools to act on customers’ words, NPS will end up as nothing more than a futile KPI.
To listen to a recording of the full webinar “Customer experience failures and how to avoid them,” click here.