We all know that NPS® helps thousands of companies around the world through its research methodology. What you may not know yet is that this metric has evolved into a new version, NPS® 2.
To give you better context on this subject, NPS® was used for a long time only as a scoring system, and not as a customer experience management system. And that's exactly what the new NPS® methodology does; it has become a system for managing customer satisfaction and experience.
We've already mentioned in other articles that the Net Promoter Score℠has become the Net Promoter System℠, remember? Well, the NPS® methodology has also evolved in recent years, as the marketing landscape has evolved along with it.
So let's talk about how NPS® 2 works and what changes it has undergone:
What is NPS® 2?
There is no single, precise definition of NPS® 2. What you need to keep in mind is that the NPS® has evolved from a data-driven, survey-based approach to an integrated system that prioritizes the customer journey, rather than just survey data.
NPS® 2 emerged when the authors of the book The Ultimate Question identified that companies that were succeeding with NPS®were following the same path, which we will describe in the following sections.
But remember, the key to NPS® isn't the metric itself, but the follow-up you do with your customers or employees after each action.
NPS® and NPS®2: Understand the difference
NPS® , and improving the customer experience.
However, the focus now is on using metrics as a customer satisfaction management, not just a measurement methodology. Furthermore, the customer journey should be considered throughout the entire customer lifecycle.
To help you understand better, we've broken down the differences into a few key points:
Focus on the NPS® system
As I mentioned before, the shift now is to focus on the customer journey and use scoring only as a guide. After all, if you're only focused on scoring, you end up restricting the actions you can take.
Furthermore, the idea is to monitor the entire customer journey, not just parts of it. It's the only way to ensure you're always focused on delivering the best customer experience during every stage of the customer lifecycle.
As we've discussed in other articles, the NPS® score is more than just a number. It can be volatile, and you need to focus on several aspects (such as the margin of error, the response rate , and the number of people who respond, to name a few examples).
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Use of external data
Understanding customer needs is fundamental to ensuring growth and extending their lifetime value within the company, and for this, a variety of data sources is very useful in meeting this challenge.
While NPS® surveys offer excellent insights into how your brand, service, or product is perceived, there is much more to explore.
NPS® 2 expands to more data sources, such as social feedback and operational data, aiming for a comprehensive understanding of the customer journey.
By analyzing different sets of information, the new methodology tends to effectively embrace this data diversity and drive continuous improvements in all aspects of the business.
Here are some examples of additional data sources that NPS® 2 takes into account:
- Data captured during conversations with customers;
- Unstructured feedback (essentially, comments left by customers on social media);
- Operational data (help desk, CRM, ERP, etc.)
Loop closure at all stages
Instead of focusing solely on winning back detractors, the idea is to concentrate more on engaging and stimulating neutrals and promoters.
While it's crucial to ensure the number of detractors isn't too high, you should also focus your efforts on building relationships with your promoters, as this is more beneficial in the long run. In fact, according to a study by the Institute of Customer Service, loyal customers are, on average, worth up to 10 times more than their first purchase.
The more you interact with promoters and nurture their loyalty, the more likely they are to become brand advocates and start helping your company win new customers.
Furthermore, closing the loop can also help you innovate the customer experienceby analyzing the steps in their journey where customers are "handed off" from one department to another.
The first loop involves frontline employees, where customer feedback is offered and customer service acts on it. Now, the feedback can be leveraged to learn more about the root cause and find solutions that strengthen the customer relationship.
The second loop involves the company's leadership level, which should focus on improving the overall customer experience, relying on the data collected in the research.
The third loop occurs at the executive level, which directs efforts toward developing a quality communication strategy between customers and employees, and also toward closely analyzing the numerous customer categories (so you can offer exactly what they want).
Continuous measurement of customer experience
The idea of applying seasonal surveys at the same time of year is no longer effective. According to the NPS® methodology, for a real change in customer satisfaction, experience, and loyalty, customer data needs to be part of a daily information flow.
When a process like this can be fully integrated into your business and is carried out in conjunction with timely NPS® surveys (during different phases of the customer lifecycle), that's when you can gather enough relevant information to make a meaningful change that will truly impact the customer.
Data integration
When NPS® first emerged, few companies were aware of how to apply the metric to their businesses. According to Satmetrix, many companies started measuring NPS wherever they could, resulting in fragmented and actionable data.
The goal of NPS®2 is to bring all the data together in a single integrated system, capable of providing companies with the necessary framework to better understand and address the customer experience.
Company-wide involvement
Another extremely important point, and one that makes all the difference in adopting a customer-centric culture, is that all employees and departments of a company should have access to customer data collected through these surveys.
NPS®2 addresses the fact that you need to spend more time finding ways to make the collected feedback easier to consume than on practices for collecting responses.
The idea is to use attractive formats to convey data to your employees to ensure everyone engages with it. A good example of this would be a company newsletter that displays all the data through infographics or videos, as visual content is generally more engaging than just plain text.
Conclusion
The Net Promoter℠ methodology is considered one of the most effective ways to measure, manage, and improve customer experience. With NPS®2, you can take it to the next level, creating a customer-centric.
This not only helps you discover what customers think of your brand, but also provides insight into your company's future financial condition, as there is a direct link between NPS® and corporate growth.
Apply the tips from this article to your company and ensure a better future for your business.
Customer experience metrics give us clarity, control, and most importantly, inspire action.
Lucas Hansel, CPO Harmo
NPS is a registered trademark, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.