Stop depending on NPS: What retailers get wrong about customer feedback
The NPS question. Probably the most used tool ever for measuring customer satisfaction and loyalty. But can you really count on it to change behaviour and outcomes? Let’s look closer and see how retailers should use NPS to create meaningful change.
NPS (Net Promoter Score) has been around for 20 years and is being used by the majority of top companies around the world. Always with the purpose of measuring how loyal and satisfied the customers are, in order to get a better understanding of customer sentiments.
Despite its undeniable popularity, NPS might not be as effective as many want to believe. Relying on just one, simple question to determine customer satisfaction and loyalty oversimplifies the complex nature of consumer experiences. And oftentimes the results only leave managers frustrated, since the end score is difficult to turn into actual behaviour change.
Thankfully, we are currently seeing a trend where retailers want to use more data to invest into customer experiences. They’re realizing that NPS is not enough, and since using data is so effective in the online space, why not use more data in the physical stores as well?
With that in mind, what should you focus on, if not NPS? And how should you use NPS going forward?
In this article, we’ll cover:
- What is NPS?
- Why are so many companies using NPS?
- Benefits and limitations of using NPS
- Dangers of relying on NPS
- Asking the right questions
- What questions to ask
- The modern way to collect feedback
What is NPS?
NPS was created by Fred Reichheld in 2003, with the purpose of gaining a clearer understanding of customer loyalty and identifying the factors that contribute to customer satisfaction.
A question is sent out to your customers to answer after they’ve been in touch with your store. The answers create a metric for companies to measure and make decisions based on.
NPS is simply one question that is asked to establish levels of customer satisfaction and loyalty: How likely is it that you would recommend [Organisation X] to a friend or colleague?
Based on the answers, companies get an overall understanding of their customers.
- If the answers range between 9-10, customers seem to be satisfied and likely to recommend your store.
- If the answers range between 7-8, customers seem to be satisfied, but might not actively recommend your store to others.
- If the answers are lower than that, customers might be dissatisfied and might speak badly of your store to others.
Even though this tool is widely used, many are starting to criticise it for not encapsulating the whole customer experience.
It is simply not enough.
Why are so many companies using NPS?
NPS has become the most popular tool for measuring customer satisfaction, mostly because of its simplicity and ability to benchmark. It is, however, important to not get stuck and do things because “that’s how we’ve always done it”. The NPS comes with both benefits and limitations.
Benefits of using NPS:
Simplicity: One of the key advantages is the simplicity. Using just one, simple question makes it easy for customers to understand and respond without feeling overwhelmed.
Quick data collection: The straightforward nature of NPS also allows for quick data collection and analysis. You can get an overview of the score and decide your next action plan fast.
Easy to benchmark: Since the final Promoter Score is standardized and used worldwide, it’s easy to benchmark against industry standard and competitors.
In the end, NPS can serve as an indication on how your store is doing, and how satisfied your customers are. Using the score as a measurement, you can then decide actions and compare to earlier NPS results to see how you’re doing.
However, there are a lot of limitations when it comes to NPS, compared to other solutions.
Limitations of using NPS:
Narrow focus: Using only one question oversimplifies the complexity of customer experiences. You simply don’t get the full picture, and you won’t get deep enough to understand the details of any interaction.
No connection to behaviour change: The score itself doesn’t tell you what your staff need to work on, which means the plan moving forward becomes a guessing game. Asking other types of questions could give you more detailed insights to point you in a direction of improvement.
Inability to capture changes over time: The NPS is simply a snapshot of customer satisfaction at one point in time and doesn’t capture the changes and trends in customer satisfaction. Over time, it won’t give you the day-to-day feedback you need to keep improving.
The danger of relying on NPS
At the end of the day, depending on NPS to get performance insights is not ideal. It’s a limited method that won’t give you the granular insights necessary to implement behaviour change among your frontline staff. You also ask for the customers to spend their time answering your question, which makes it even more important that their time leads to something valuable.
Most of the time when we talk to retail managers, they are frustrated because they know their NPS score, but they don’t know how to initiate behaviour change among the staff. They are starting to realize that they need to switch strategy to be able to improve their performance and empower their frontline staff.
Of course, you don’t have to stop measuring NPS all together. But what you need to do is use other tools that can actually provide insights and ignite the behaviour change that is needed for improving performance and customer satisfaction.
Asking the right questions
The purpose of feedback is to receive data that you can use to improve. Otherwise, what’s the point? With that said, since you already ask customers for their time to answer your NPS questions, why not take the opportunity to ask questions that give you actionable answers?
The most successful retailers have already realized the power in data collection, not only in your online store, but in your physical stores as well! And asking for the right feedback is the most powerful way of accumulating quality data. How do they do this? Simply by asking the right questions.
What questions to ask
Here are some of the best questions to ask your customers, to make sure you get answers that you can turn into insights, and most importantly, areas to improve in.
- In what degree did the staff provide you with good advice and recommendations?
- How friendly and accommodating was the staff?
- Did they offer you the help you needed?
And remember, your customers don’t want to spend all day answering your questions. Keep it short and simple, and make sure that every question serves a purpose.
The modern way to collect feedback
Hopefully you’ve now realized the value in asking the right questions and not relying on NPS to improve your staff performance and store revenue. Next step is to choose what solution you will use to simplify the process of collecting better feedback.
Maze is essentially a training app for your frontline staff, to improve their performance and in the end, create more positive customer experiences. You send out smart questions that are chosen based on your sales strategies, and then formulated by our smart and well-trained AI. And then your customers can answer them in a simple way. The frontline staff and managers receives concrete, real time feedback they can act on immediately.