Developing a customer scoring programme
Measuring something as multi-spectral and ever-evolving as sentiment is a massive challenge and yet quantifying customer satisfaction is key to business growth.
Happy customers keep coming back and refer other people to you, whereas unhappy customers will buy elsewhere and discourage potential buyers from choosing you. A business needs to know whether it's getting better or worse at ensuring customers are having a good enough experience to stick around.
Scoring your existing customers gives a business a barometer as to whether the majority of customers are happy, or dissatisfied. The earlier in the customer's lifecycle these assessments can be better, a business can influence the outcomes by flagging unhappy contacts for attention and encouraging happy customers to bring in new customers.
Existing customer scoring models
Historically businesses have turned to the global standard measurement method for tracking customer satisfaction; NPS®.
NPS® (Net Promoter Score) has a number of benefits, which have led to it being the conventional approach for measuring customer satisfaction. But it also has some quite significant drawbacks, which few businesses are able to overcome.
This scoring system asks a simple question and gives the business a score based on their response. When posed the question ‘How likely are you to recommend [business name] to someone else?’ the individual is then asked to rank their answer on a sliding scale of 1 to 10 with 1 being not at all likely and 10 being highly likely. Anyone responding 9+ is considered a promoter (very likely to recommend), anyone scoring 6 or below is a detractor (dissatisfied and likely to grumble) with everyone in between flagged as passive, and is not included in the final calculation.
The calculation takes all the promoters, as a percentage of responses and minuses the detractors as a percentage to give the NPS®:
Promoter % – Detractor % = NPS®
Another model to consider when developing a customer scoring programme is CSAT. Standing for Customer Satisfaction (the C from customer and the SAT from satisfaction) it looks at the short-term impact a particular purchase or experience has had on the customer's impression of the company. It often appears at the end of a web-chat or customer support emails and can be framed "How would you rate your overall experience with the service/product you received?".
The main difference between NPS® and CSAT is that the former asks for a company-wide score and the latter feedback on a particular interaction. It's worth noting that, depending on the interaction the CSAT is gathered from, a business may see exceptionally high or exceptionally low scores. A customer service rep instrumental in fixing a particular tech issue will receive high scores as the desired outcome was achieved, while any other outcome might warrant an exceptionally low score due to the solution not only being unresolved but the added time invested failing to yield the desired outcome.
Should my business use NPS® for its customer scoring programme?
The simplicity of this calculation is also its biggest weakness when considering it as a metric for scoring customer satisfaction. Summarising something as complex, evolving and multi-faceted as a customer’s opinion of your business with one question is risky. After all, how many times has a waiter asked if everything’s alright with your meal and you’ve answered in the affirmative even if it’s not?
73% of companies with above-average customer experience perform better financially than their competitors and brands with superior customer experience (CX) bring in 5.7 times more revenue than competitors that lag in customer experience.
Data delivers the insight required to improve a business and incorrect data can misdirect investment, while also causing the business to focus on the wrong areas thus perpetuating the underlying issues. This is aided by the oversimplification of NPS®.
A study by the University of Cambridge highlighted the case of a business using NPS® where 500 customers had been incorrectly classified as promoters by the NPS® model but were actually detractors when purchasing behaviour was analysed. This is huge, especially for businesses looking to have their customer satisfaction programme directly feed back into business growth.
There are numerous articles highlighting the shortcomings of NPS®, but what are the alternatives?
The challenge for businesses looking to develop a customer scoring programme is that every major feedback tech platform measuring customer satisfaction uses NPS®. A quick scan of Ask Nicely, Delighted and Qualtrics shows they're confidently promoting their use of the NPS® model. And whereas this might be seen as a sales advantage due to NPS® being easily recognised this oversimplification of customer satisfaction can actually lead to reduced business revenue due to the misidentification of detractors as promoters.
And whereas NPS® asks an undoubtedly important question for any business it doesn’t answer the most important question; why?
If someone gives an 8, what specifically, drove them to that score? What can be learned from their rationale, can it be improved upon or replicated? When you're considering a customer scoring programme also ask yourself what you're scoring, and whether a score is more valuable to your business than written explanations for why your business is succeeding or failing at winning more customers.
What’s needed is a multi-dimensional calculation based not on a single question, but a multitude of inputs - both implicit and explicit. There is more data available to businesses about their customers than ever before, yet very little of it is directed towards measuring customer satisfaction and churn. Innovative CRM systems, such as HubSpot and Salesforce enable businesses to track customer behaviour readily but the affiliated satisfaction scoring systems have yet to keep pace.
When trying to create a programme for managing and measuring customer satisfaction ask yourself whether a single question about their likelihood to recommend your business to a friend goes far enough. If it doesn’t then maybe you should look into the next generation of customer feedback platforms.