Pros & Cons of Using NPS To Measure CX Success. (Podcast)

Is “Net Promoter Score,” otherwise known as “NPS,” a good measurement of customer satisfaction. Many customer experience (CX) experts say yes. They depend on NPS as a sole metric to determine customers’ perceptions and feelings about their brand. However, others debate the validity and usefulness of Net Promoter Score, saying that “the science behind NPS is bad, and it’s been oversold.” Having worked in Corporate America leading customer experience for many years, I have an opinion about this topic, which I share on The Future of Field Services Podcast. During my interview, we discuss several questions including: 

    • IS MEASURING NPS WORTH DOING?
    • SHOULD NPS SCORES BE TIED TO EMPLOYEE BONUSES?
    • IS NPS A DRIVER OF REVENUE?
    • IS THERE ANY DOWNSIDE TO USING NPS?

Listen to Podcast Listen to Podcast HERE. Read the transcript below.

INCREASE YOUR CX SKILLS & TRANSFORM YOUR ORGANIZATION.

 

*All opinions expressed are Stacy’s & do not reflect opinions of or imply endorsement of employers or other organizations.

Podcast Transcription about NPS and DoingCXRight Podcast Transcript:

Sarah: (00:12) Welcome to the Future of Field Service podcast. I’m your host, Sarah Nicastro. On today’s episode, we are going to discuss whether or not Net Promoter Score as a measurement of success is overrated. We’ve seen an increasing focus over the past couple of years on customer experience in field service. And I’m joined today by Stacy Sherman, a woman that I met about a year ago and have grown to know very well. Stacy is leading customer experience and employee engagement at Schindler Elevator Corporation. Stacy, thank you so much for joining today.

Stacy: (00:53) Thank you.

Sarah: (00:55) I’d love it if you would tell our listeners a bit about yourself, your role at Schindler and history in the industry before we dive into the conversation.

Stacy: (01:08) I joined Schindler summer of 2018. I left my customer experience job at Verizon Wireless to join Schindler in North America. My current role has a lot of components, but at the highest level, I can summarize it by three areas of focus. One is acquiring customer feedback and measuring customer satisfaction along the customer journey, what we call key “moments of truth.” Secondly, taking action and closing the loop from the insights obtained, which involves a lot of cross-team collaboration to implement improvements. And then also engaging employees, especially our front line and working with them to apply customer experience best practices and methodologies to deliver customer excellence. I have to say that while I joined Schindler a year ago, the company was doing a lot right in the area of customer experience. They brought me on to take it to the next level, knowing I have advanced degrees and strategic and tactical job experiences.

Sarah: (02:31) That’s great. So, one of the things I think is cool about Stacy, in addition to her role at Schindler, is that she’s super passionate about customer experience. She has her own blog, which is DoingCXRight.com, and talks about all topics related to customer experience. Stacy, how long have you been writing about CX, in addition to your role at Schindler?

Stacy: (03:00) I started my blog a couple of years ago, and, I have to say that I never imagined what the platform would do for me. I’ve met so many authors and CX experts. Everyone’s interested in knowledge sharing and collaborating. It’s an evolution, and we’re really learning from each other. There’s a big community to tap into. So, I started DoingCXRight to share my voice and views while also drive conversation within my blog and on my social media channels.

Sarah: (03:43) Very cool. And it’s excellent content. So, I certainly encourage our listeners to check it out. Between your role at Schindler and DoingCXRight, you’re totally equipped to dive into this conversation today. But before we talk specifically about NPS and its role in measuring customer experience, I’m hoping you’ll entertain a couple of more personal questions. On the Future of Field Service, we’ve been working on women in field service series since March. We’ve been talking to different women in the industry about intentional diversity and inclusion. I’m curious about your thoughts on this important topic. We’ve certainly made some strides, but what’s your take on what needs to happen from this point forward?

Stacy: (04:49) I’m so glad you bring up this question because what needs to happen from a workplace perspective is one, we need a 100% focus and commitment from companies to make inclusion happen. We need diversity of thought in every meeting, and we also need to allow women to have leadership roles, especially in a traditionally male organization. If two individuals with similar skills and education apply for the same job or promotion, there should be no difference in the evaluation process regardless of where they work. Unfortunately, equality and inclusion have not been the case over time. I’ve witnessed this firsthand throughout my career. But on a better note, there is now a cultural shift, and I’m so glad that my kids, especially my daughter, will benefit in positive ways. I have to say that I’m benefiting more now than ever as companies like Schindler are investing a lot in diversity. In fact, I am in a women’s program with other smart women for the next ten months. It’s an incredible opportunity that I’m grateful for and appreciate programs like this exist. So, when you ask me what needs to happen from here, this is it. Companies are finally walking the diversity talk, and we need to keep it going.

Sarah: (06:16) Absolutely. So as a woman in field service, would you be willing to share with us both the biggest challenge you faced as well as how you view the opportunity that exists in the industry for women right now?

Stacy: (06:32) Yes, I’ve overcome inclusion situations. For example, there have been times that I was not invited to all-male meetings, even when my level or related positions were in the room and topics pertained to my role. Fortunately, I’ve overcome those challenges by communicating tactfully with people and articulating the value I bring so they’d understand my perspective and need for inclusion. I didn’t approach it as complaining, but rather emphasizing my value. I see a lot of opportunity in and out of the industry for more women and men to communicate openly and honestly without judgments. And the more this happens, the better our workplaces will naturally be.

Sarah: (07:24) I agree. You know, it’s interesting talking about this topic of women and field service and diversity. I believe the majority of people I talk to appreciate the conversation. I’ve heard many comments that if we really want diversity and inclusion, we need to speak openly about it. It’s helpful because there are times where situations like yours happen intentionally.  I think there are even MORE times where they occur without any malicious or ill intent. And so having the conversation and bringing the awareness to the table helps prevent those accidental issues from continuing to happen.

Stacy: (08:28) I agree. Yes.

Sarah: (08:29) Thanks for answering those questions. Now we’re going to talk specifically about whether or not NPS is overrated. Before we dive into that conversation, let’s discuss just for a moment about CX in field service in general. As I mentioned earlier, it’s become an increasingly critical focus area among field service organizations in a variety of industries. We see more and more field service companies that traditionally haven’t had specific functions, and teams are now implementing CX. As you mentioned, even before you joined Schindler, they were a bit ahead of the curve in making CX a focus. Other industries have lagged behind, and first focusing on CX now. I know you’re very passionate about this topic. We spoke about the fact that you not only lead CX at your day job, but you do it with your blog as well. Tell us about why you love CX so much, and the reason you’ve pursued it both as your career and hobby.

Stacy: (09:43) Yeah, so let me start up by saying that I fell into CX by accident. I had always been in sales and digital marketing roles. And then one day, while working in my eCommerce Marketing role, there was a company reorganization. I was thrown what I call a “CX ball” and caught it, but I didn’t know what to do with it. At that time, terms like “CX” and “VOC” were unknown. I remember asking my boss about them, and he said, “I am not sure, but you need to go figure it out.” And so I did. My passion grew exponentially. It became clear that customers are no longer buying based on price alone and that CX would be the way to differentiate brands… and a way to differentiate me professionally. I continued to advance my skills. As I learned CX methodologies, I’ve been able to make a bigger impact, which in turn increased my confidence and work satisfaction.

Stacy: (10:51) On a personal level, I love leading CX because there’s a lot of psychology to it. I’m able to marry my fascination with psychology and my passion for business together to create experiences for people. My blog is something I thought about launching for a very long time. I wasn’t sure how to get started, and I didn’t know if anyone would even read it or listen to my voice. But, then I just started, and it evolved. As I continued to meet like-minded, passionate people, it became a hobby. While some people like to play golf on the weekends, I enjoy writing and speaking about CX. I believe as it’s an important topic, especially with the evolution of new CX measurement tools and technology, it’s only going to get bigger. So I’m still happy to be part of it, even if it was accidental.

Sarah: (11:53) Yeah. Serendipitous. That cool. You know, there’s a couple of reasons I love this topic. It’s been a favorite of mine for the past few years. I think the first reason is just that it is so important, right? I mean, we see a huge evolution in field service organizations embracing the way to be more strategic and grow their business. And the only real method to do that is by focusing on customers. The second reason we’ve talked a lot about on this podcast is the issue around field service not being what young people envision as a dream career, right?

Sarah: (12:56) It’s not necessarily top of mind when you ask a senior in high school what they want to be when they’ve completed school. As you mentioned, I think as a CX function incorporates these cool things like psychology, it is a new avenue for talent and will continue to grow within companies. It gives a whole new area of the industry to appeal to different types of talent. I think that’s pretty neat as well.

Stacy: (13:34) Yes. And, to that point, I want to help drive that. I want more people to be CX champions, and I want CX to be more embedded in college curriculums. That’s another reason why I started my blog, which is to help mentor people, whether they’re new to customer experience or want to advance their skills. I want to be part of that. I believe leading customer experience is a great career choice.

Sarah: (14:05) Yeah, and that could potentially be something we have a different conversation about at some point, such as what that looks like for folks considering this industry or a CX type of role. So now we’ll get to the topic at hand. Is NPS overrated?  The Wall Street Journal recently published an article on NPS that was titled “The Dubious Management Fads Sweeping Corporate America.” The article got a lot of buzz. I wanted to bring you, who is a CX expert in our industry on to this show to hear your thoughts. The article is essentially raising the question of whether or not NPS is a good measurement of customer satisfaction. I know that in the world of field service, executives I’m talking to daily have worked hard over the past few years to prioritize and incorporate NPS. So, I’m wondering if you can share if those efforts been worth it? What is your take on this question of whether or not it’s overrated?

Stacy: (15:26) Yeah. I have a couple of comments before I answer this question. I need to state out loud that I am sharing my personal views. I am not representing my employer or other organizations. So, with that said, my answer is yes. Net Promoter Score is a valuable leading indicator of customer loyalty. I also believe that drivers of NPS are important to measure too, like the level of effort, customer sentiment, and other key performance indicators. These KPIs coupled with NPS, which is about how likely customers are willing to recommend a company’s products and services, allow managers to make the most informed business decisions.  They can reach conclusions both on a strategic and tactical level. The article presents downsides about NPS. My only comment is that the numeric score is insightful. However, when employees only look at the survey rating without reading customer comments, they miss essential information for action planning.

Stacy: (16:37) I’ve seen this happen throughout my career whereby customers provide a high rating, like a 9 or 10 score, but then indicate “pain points” in their comments. They’ll say, for example, “I love using your product, but when issues arise, it’s tough to get help, and response times are too long.” Well, if you consider the NPS score by itself, it appears that the customer is a brand advocate. But when you read the verbatims, it’s evident that competitive offers could lure the customer. So it’s essential to analyze both the qualitative and the quantitative data for NPS to be fully useful.

Sarah: (17:22) Okay, that makes sense. So I know one of the reasons companies are incorporating and focusing on NPS is to grow revenue. I’m curious if you see a correlation between NPS and revenue?

Stacy: (17:37) Yeah. So the Wall Street Journal article shares different opinions about NPS and financial correlations. There’s an interesting chart that shows an upward trend on how many companies are referencing NPS at their investor meetings. By the way, I posted a copy of the article and chart on my website in case anyone missed it.  So, with the chart in mind, while no one has 100% proven that NPS is a driver of revenue, I believe that measuring customer satisfaction is a useful indicator. It helps predict risk and future behaviors, whether it be cancellations or bad press on social media and review sites. I recommend everyone, at all companies, no matter what size or industry, focuses on customer experience metrics. I encourage all brands to use the voice of customer (VOC) insights as it helps to minimize loss of business, loss of customer trust, etc.

Sarah: (18:40) Okay,   got it. So, another thing that we’ve seen is companies are tying employee bonuses or variable pay to NPS scores. So in your opinion, is this something that is a good idea to do and why or why not?

Stacy: (18:59) I have to tell you that of all the different articles I’ve written, this is a topic that has had the most debate. I believe, yes, it is an effective way to make sure everyone in the company cares about customer excellence. It helps ensure they own it, not just stay it. I’ve worked in organizations where just leaders had CX objectives and not the frontline team. That approach did not drive a customer-centric culture or employee accountability. On the contrary, when customer satisfaction goals became a shared objective across every department, detractor scores declined. This is what I witnessed. Other CX experts might argue against it, and so, the jury is still out on this topic. I believe that it is a good idea to tie employee bonuses to NPS in light of all the scenarios experienced.

Sarah: (20:11) Okay. So overall NPS is valuable but needs to be tempered. If you had to outline a few bullet points, what’s your best advice for organizations on how to use NPS successfully?

Stacy: (20:33) My advice is to leverage NPS but also ask questions that help you get to WHY customers would recommend the company and products. And, most importantly, it’s important to follow up with customers. You must close the loop and let customers know that you’ve heard them and that their feedback matters. I can’t stress that enough. If you’re going to ask the NPS question and other related customer feedback questions, and don’t do anything about it, it’s not worth doing. Customers end up knowing that.

Sarah: (21:16) Is there a different prioritization or process for following up on negative feedback versus positive feedback? Are those weighted differently?

Stacy: (21:29) I think they’re all equally important. Too often, people focus on the negative more than the positive. I think it’s essential to treat them equally.  When there are good scores, celebrate them. Thank your customers. Talk about the feedback at employee meetings. Of course, when customers express dissatisfaction and unhappiness, you have to resolve the issues, but they’re both really, really important. So, I would say there’s not one that’s a heavier weight in my mind.

Sarah: (22:08) Okay. What other comments do you have related to NPS or just customer experience in field service in general? What closing thoughts do you want to share with our listeners?

Stacy: (22:28) I have two final comments. One is that I encourage everyone to focus on improving communication. It’s something that is in our direct control. And yet, it seems to be a pain point with customers and employees everywhere. So for example, if someone asks a question and you are unsure of the answer, don’t hide from it. Tell people, especially customers, that you’re still working on a solution and that you haven’t forgotten about them. The bottom line is we have to humanize experiences more. It sounds so basic, but yet not done enough. My second point is to expect the unexpected. There’s always going to be obstacles. There’s always going to be a path to yes. And there’s always a way to Wow customers. I also believe there’s a way to change company culture, even if they’ve not used to diversity. Those are my final thoughts, and I hope I’ve inspired those listening today. Let’s keep the conversations going.

Sarah: (23:50) Absolutely. So, let our listeners know where they can find more of your content.

Stacy: (23:57) Thank you for that. My website is DoingCXRight.com. You can also find me on Instagram, Twitter, and connect with me on LinkedIn. I’d love to hear from people and continue knowledge sharing.

Sarah: (24:28) That’s excellent. Well, thank you so much, Stacy, for joining us today and sharing your input on this topic. I’m sure there’s a wealth of CX related topics we could get your opinion on in the future, and I appreciate having you with us.

Stacy: (24:42) Thank you again for sharing my view today.

Sarah: (24:45) Absolutely. You can find more content on customer experience including an interview with Stacy that we did earlier this year (view here) and a variety of other articles at Future of Field Service (www.futureoffieldservice.com.) You can find us on LinkedIn and on Twitter too. I hope you’ll check out our content. The Future of Field Service podcast is published in partnership with IFS. You can learn more at www.ifsworld.com. As always, thank you so much for listening.