Earlier this year I was asked for my opinion about which key performance indicator (KPI) was the most important. I think if you ask five different people you may get five different answers.
As important as overall satisfaction, value for price paid, intent to return, and a dozen other performance indicators are, if I had to choose one, I’d choose net promoter score (NPS).
NPS is a customer loyalty metric created by Fred Reicheld, Bain & Company and Satmetrix in 2003. Essentially, it identifies customers as being Promoters, Passives, or Detractors of an organization, company, or brand based on their likelihood to recommend it to others.
Here’s why I like NPS so much as a KPI of customer service quality:
It’s based on “the ultimate question” identified by Reicheld in his book of the same title: (On a 0-10 scale) How likely is it that you would recommend (our organization, company, or brand) to a friend or colleague?
At its essence, this is a question about recommendations/referrals, which is inextricably linked to reputation, which, in turn, is inextricable linked to customer confidence in the organization’s performance/product & service quality.
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It validates the existence of neutral customers (labeled “Passives”) who largely feel invisible to the organization and its employees.
Due to the perceived indifference with which they are treated, these customers are unenthusiastic and easily swayed to the competition – because the company and its employees have done nothing remarkable to acknowledge them or make a lasting positive impression (in order to secure their loyalty and move them to becoming “Promoters”).
Whenever I conduct a NPS analysis of, say, a local competitive set for a hotel client using TripAdvisor data (correlating its 5-star rating to NPS’s 10-point scale), I’ve never once had a client say that my results/rankings did not reflect the actual product/service quality reputations of the hotels included in my analysis.
How about you? Is there a KPI that you feel is most important to evaluating product and service quality in your world of work?
About the Author
Steve Curtin was rated #4 by Global Guru on its 2015 listing of the Top 30 experts in the world on the topic of customer service. He is the author of Delight Your Customers: 7 Simple Ways to Raise Your Customer Service from Ordinary to Extraordinary (AMACOM Books, New York, NY), currently in its fifth printing.
After a 20-year career with Marriott International, Steve now devotes his time to speaking, consulting, and writing on the topic of extraordinary customer service. He lives in Denver, Colorado with his wife, four children, and a Goldendoodle named Nugget.