Many common beliefs about customer experience are misguided, based on oversimplifications or a lack of consideration for real-world constraints. In this series of posts, we debunk these myths.
CX Myth #4: Net Promoter Score Is The Best/Worst Metric
People often argue that Net Promoter Score (NPS) is the greatest metric, while other people argue that it’s a terrible metric. Both of those points of view are off the mark.
We rarely see a company succeed or fail based on the specific metric that it chooses. That doesn’t mean that you can choose a ridiculous metric, but most reasonable metrics provide the same potential for success (and failure). In many cases, NPS is a reasonable choice, as our data shows that it often correlates to customer loyalty. The way you use a metric is often far more important than the metric that you chose.
What You Should Do:
- Pick a simple metric. It’s important that you choose a metric that employees will understand, so they are motivated to help improve it. The metric can be based on customer attitudes (like NPS), behaviors (like repeat purchases), or even results (like first call resolution). Just pick a simple metric that aligns with your business goals.
- Follow our five steps. To drive improvements using the metric, follow Temkin Group’s five steps to a strong CX metrics program: 1) Determine a core CX metric, 2) set achievable goals, 3) identify key drivers, 4) establish key driver metrics, and 5) make the suite of metrics actionable.
- Focus on all four action loops. People often discuss an action loop with CX metrics, but we’ve identified four customer insight-driven action loops: Immediate response, corrective action, continuous improvement, and strategic change. Any CX metrics program should put in place processes to close all four loops.
- Don’t compensate too much. When companies establish CX metrics, they often establish compensation based on them. While this can be a valuable approach to raise awareness and alignment, it can also be a problem if the level of compensation is too large (can encourage bad behaviors), it focuses on individual results (CX is a team sport), or the goals are too precise (some metrics are inherently jittery).
- Have a very clear sampling strategy. The approach for sampling often has a very significant impact on results. If you have multiple segments of customers and they each have a different profile (as many do), then your overall scores can change wildly based on the mix of those customers that are included in your calculations.
The bottom line: Obsess about your metrics program, not your metric.