CIOs should focus on accurate, long-term NPS to measure loyalty

CIOs needs effective tools for measuring their team’s impact on customer experience. NPS is one of my favorite tools for this, if it’s used correctly.

CIOs build the foundation for companies that are looking to leverage every advantage in the digital age. Their efforts directly impact the customer-experience – from ensuring smooth operations behind the scenes, to enhancing customer-facing technology.

For every new tech initiative, there’s a team that is responsible for designing, developing and executing a new solution. There are three key metrics that can identify the successful execution needed to keep customers: Was the new technology delivered on time? Was it delivered on budget? Was the customer satisfied with the new capabilities?

NPS can be used within context

Timeline and budget are easy to measure. But customer satisfaction can be one most difficult to measure. And it’s important that your organization gets this measurement right, because it is the most important for long-term success.

To tackle this challenge, many companies turn to metrics like their Net Promoter Scores (NPS). This is a measurement of how likely a customer is to recommend your company to their friends and family in need of similar services. The problem with statistics like NPS is that they offer a momentary snapshot without context. And they are often measured following a transaction – which is a narrowly focused moment in time.

Leverage tech solutions

Bruce Tempkin, co-founder and Chairman Emeritus of CEPA, explains: “Net Promoter Scores (NPS) are for relationships, not transactions. Asking people if they would recommend a company isn’t a good question to use after an interaction. If a customer is a detractor on an NPS survey deployed right after a call into the contact center, for instance, then it doesn’t necessarily mean that there was a problem with that interaction. The contact center might have done a great job on the call, but the customer may still dislike something else about the company. If the contact center interaction had been problematic, then the customer’s NPS score might be temporarily lowered and not reflective of the customer’s longer-term view of the company.”

There are dozens of customer experience variables that inflict temporary change on an NPS score. The key is to find out what they are, why customers felt that way, and how the issue can be improved. That’s why integrated customer success technology has become such an important part of accurately gauging customer satisfaction.

The best leaders use NPS

NPS is a great starting point for CIOs to measure success. But they should not stop there. It’s important to dive into past scores to analyze trends. And by diving into specific feedback, it’s possible to complete an investigation into the real impact and opportunities presented by new technologies.

“Average executives think about customer feedback as periodic snapshots in time; high-performing executives see it as part of a continuous narrative,” says Todd Olson, NPS expert and CEO of Pendo. “Critical to this narrative is a combination of qualitative data like NPS and more quantitative behavioral measures and product engagement patterns that reveal which features drive customer delight.”

Learn from Enterprise

When Frederick F. Reichheld designed NPS in 2003, there needed to be a complete shift in thinking among executives. This feedback should no longer be looked at as market research, but rather an operating management tool.

Here’s an excerpt from Reichheld’s original piece in Harvard Business Review on building the NPS process:

The first step in the development of Enterprise Rent-A-Car’s current survey system was to devise a way to track loyalty by measuring service quality from the customer’s perspective. The initial effort yielded a long, unwieldy research questionnaire, one that included the pet questions of everyone involved in drafting the survey. It only captured average service quality on a regional basis—interesting, but useless, since managers needed to see scores for each individual branch to establish clear accountability. Over time, the sample was expanded to provide this information. And the number of questions on the survey was sharply reduced; this simplified the collating of answers and allowed the company to post monthly branch-level results almost as soon as they were collected.

From here, Enterprise could examine relationships between customer responses and purchases and/or referrals. The article states that clients who gave the highest rating on their experience were three times more likely to use the service again, compared with those who gave the second-highest grade.

"Combining NPS with product usage data is extremely powerful. While NPS is widely adopted as a key customer experience metric, it's often difficult or impossible to discern the factors behind the score. Without insight into root cause--without attribution between NPS scores and underlying usage patterns--product leaders can’t identify specific actions to improve NPS scores and, more to the point, improve customer loyalty,” says Olsen.

CIOs can help the rest of the c-suite by incorporating these surveys within the actual app the customers are using. Olsen claims to see 10 - 10,000 times higher response rates when they respond in-app versus email. This provides both a larger data set, and improves the likelihood that customer feedback will identify the areas where customer loyalty is being lost.  

Focus on painting a picture

Quantifying accountability is extremely difficult, but essential for success. One of the best ways to help measure accountability is by determining clear-cut follow-up actions for product managers after receiving the most recent round of NPS feedback.

Here are the steps I would take as a CIO with a goal of improving brand loyalty:

  • Create an internal accountability metric to which you can hold yourself accountable
  • Share it with your close team, your leadership team, and even your Board
  • Create a continuous feedback loop with clients. Let them know you’ve heard their feedback
  • Go public and share your plans for improvement moving forward
  • Create a strategy for turning passives into promoters

Ultimately, NPS was conceived and should continue to be used as an opportunity to focus your technology on the things that deliver an improved customer experience. We must leverage the best and latest tools to make sure every possible qualitative and quantitative data point is being considered. Project managers must leverage key metrics to measure long-term customer satisfaction and establish accountability for the client experience.

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