A Q&A with Product Management Experts
One of the biggest challenges facing CX executives is understanding the ROI of their customer experience (CX) program. Companies that aren’t sure of the monetary benefit of their program are eliminating their CX teams, while companies that know how their program helps them make and save money are rapidly expanding those same teams. The dichotomy between organizations comes down to their ability to understand and show value. So to help organizations build world-class CX programs, we’re going back to the basics of how to understand and prove the value of Customer Experience Management (CXM).
To kick off our blog series on the value of CXM, we sat down with the Product Management team, to understand why NPS is making its resurgence and why every company needs to be talking about NPS again.
Q: Why are we focused on NPS now?
A: NPS has been around since the early 90s, practically the stone age in digital history. The problem that NPS was meant to solve back then was to provide a simplified way to chart customer loyalty in a consistent, measurable way with a single survey question: "How likely are you to recommend Company X to a friend or colleague?" Despite having much more sophisticated methods of parsing through big collections of data (transactional, operational and behavioral) than we had in the 90s, companies still struggle today to get at that nugget of information.
Our interest in NPS stems from our experience with our amazing customer brands who have built great reputations through customer-centric decision making. Many of them started with simple NPS surveys and then built sophisticated programs to identify opportunities for improvement and drive results with product, marketing, brand and customer experience teams. The results they've achieved speak for themselves, including increased revenue and customer loyalty, higher customer lifetime value and better, faster products to market. We see NPS programs as a common starting point to achieve these types of outcomes.
Q: Over the past couple decades, NPS has fallen in and out of favor. Why?
A: NPS is often criticized for not being prescriptive enough. Companies can struggle to correlate NPS scores with tangible business outcomes. Sometimes the scoring methodology is at fault, sometimes it's the implementation—but most of the time the reason why NPS programs fail is the lack of appropriate follow-up. We believe that NPS is an effective first stage in CXM program maturity. Can you get value from NPS alone? Yes. NPS scores will give you directional guidance on how your brand is perceived by the most important people—your customers. Is it the be-all, end-all solution that you need to generate customer loyalty and steal customers away from your competition? My answer is—No, but it's a good first step on the maturity curve. What we are seeing is that, as technology has matured to do more with NPS to make it prescriptive through connecting feedback with action, and to get deeper customer insights through integrations with customer engagement solutions - NPS programs find themselves in the midst of a renaissance. In recent years, and even more since the pandemic, customers are approaching us about NPS as a starting point in their customer experience management journey.
Q: Where do companies go wrong when thinking about and implementing NPS programs?
A: An NPS program is more than just a survey. There are lots of "NPS Companies" out there that will gladly take your money to set up a survey and call it a day, not worried about whether your NPS program helps you meet tangible business objectives. What they fail to address is the governance of the program, including the frequency of outreach, the stakeholders that must be involved and the programmatic approach to drill into the details to make the feedback actionable by the critical stakeholders in your business. If all you want to do is check a box that says “we do NPS” then those tools might suffice. If you want to actually want to use NPS as a means to improve your customer experience, you need a plan to implement, grow and mature your program. Leveraging the experience of hundreds of well-known and respected customer-centric brands, we've developed a maturity assessment that helps you determine where you are today, and define what your program should look like so the path forward is clear so you can get the most value from an NPS program.