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Why your NPS strategy is only half working – and how to fix it

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WHY YOUR NPS STRATEGY IS ONLY HALF WORKING - AND HOW TO FIX IT

 

Wanting to supercharge your NPS campaign ROI with deeper insights and targeted solutions? It’s all possible with analytics says Datamine’s Sally Carey

Net Promoter Score (NPS) feels like it’s been around forever but in fact it’s a relatively new business metric, first articulated by Fred Reichheld of management consultants Bain & Company in 1993 (it’s a registered trademark too). While its foundations lie in the concepts underlying decades of customer satisfaction surveys, NPS simplified the entire vocation down to a single customer question: ‘On a scale of 1-10, how likely is it that you would recommend our company/product/service to a friend or colleague?’ Respondents with a 9 or 10 are considered promoters, 7 to 8 are passives, and 0 to 6 are detractors. An organisation’s NPS is then calculated by subtracting the percentage of detractors from the percentage of promoters — with any score above zero being considered a positive result. It’s simple, and for time-pressured marketers with a lot going on, the simple grading offered by an NPS score was initially very attractive. 

In more recent times, however, criticism of NPS has mounted. Companies with positive NPS scores, for instance, have been surprised by consumer behaviour that seems counterintuitive. Customer satisfaction, for example, hasn’t necessarily equated to loyalty and many businesses have been surprised when customers who were apparently very satisfied with their new TV, insurance policy or hotel suite, chose an alternative supplier the next time the opportunity arose.  What’s missing, they say, is answers to the all-important ‘why’ and ‘how’ questions and while NPS provides a broad positive or negative outline – deeper insight into the reasons behind the score (and what to do about it), is lacking. For businesses whose NPS campaigns raised more questions than they answered, one solution has been to follow up with respondents manually – with additional phone or email surveys aimed at filling in the blanks. The problem, however, is that these surveys are expensive to deploy and risk alienating respondents with too many unwanted communications. 

 

How to appreciably boost the value of your NPS

At Datamine we’ve long been convinced of the worth of Net Promotor Scores to any organisation wanting to get a snapshot of its customer satisfaction levels — with one caveat — we’ve always thought it had more to offer. To that end, we’ve invested in developing a bundle of analytics protocols that can be wrapped around the results of an NPS survey that will markedly increase its insight value — without requiring any additional respondent follow-up or clarification. Processes include:

 

Proof of Concept Addressing the very fundamentals of NPS, for organisations conducting regular surveys, comparative analysis can reveal if previous responders who were identified as ‘promoters’ really did go on to stay longer and buy more.

Text Mining Any NPS campaign that allows customers to answer questions in writing is text mineable for keywords and phrases that will provide customer insight and answers to many of your burning ‘why’ questions.

Bias Weighting Whether it’s caused by the communication channel selected or a penchant for responding to surveys by certain genders & age brackets, sampling bias is unavoidable in any NPS deployment — and must be corrected to prevent result skewing and enable improved resource allocation.

Trigger Identification Predictive analytics can identify which events in a customer relationship are driving responders into the detractor basket. Once these circumstances are defined, automated retention campaigns can be developed to coincide with the scheduled ‘negative’ event.

Communications Analysis What impact are your direct campaigns and sponsorships having on your NPS? Analytics has shown some expensive campaigns to have had negligible impact, while cheaper initiatives have delivered results far in excess of what was expected.

Variable Ranking Behind the scenes of a deceptively simple NPS score there are hundreds (if not thousands) of variables at play — but it is only once these have been ranked that an organisation gains true insight into which ones are critical to a positive performance — and which ones aren’t.

 

While by no means a comprehensive list, the techniques above, when applied to responses from an NPS survey, are significantly increasing the return on investment from Net Promoter Score campaigns by delivering businesses actionable insights and helping to define a clear path for improvement.

 

WHY YOUR NPS STRATEGY IS ONLY HALF WORKING —AND HOW TO FIX IT

ABOUT THE AUTHOR

Sally Carey is a director of Datamine and has over 20 years experience consulting on data analytics solutions across a range of industry sectors. Carey specializes in delivering clarity from the complexity of big data – advising organizations on a host of predictive analytics disciplines - including quantitative decision making, loyalty programmes, organisational change and marketing strategy.