According to a Walker report, by the year 2020 customer experience will overtake price and product as the key brand differentiator. We only need to look at the scandals racking companies like Facebook and the Australian banking industry to see the effect of leaving customer feedback out of the business strategy loop. This shift away from an inwards focus can lead to strong business growth, but it can also leave you with a lot of data and nothing to show for it. To get the most out of the transition to a customer-centric organisation, it is essential to understand the why behind what your customers are saying about their experiences with your organisation.
One of today’s top metrics for ranking customer experience is Net Promoter Score (NPS). Based on a simple 10-point scale, NPS captures not just satisfaction, but also the loyalty a customer feels towards your organisation and is highly correlated with their long-term value. As an industry standard, it provides effective benchmarking, but if benchmarking is all you’re taking away from your NPS then you’re missing its real benefit. It’s not enough to gather the data if you’re not using it to grow your business; growth that, if done from an informed position, should naturally feed back into your NPS.
NPS as more than a benchmark
NPS provides information on one aspect of the customer experience, but the actionable insights that can be mined from a deeper scrutiny of these surveys are often overlooked. The power of NPS surveys comes not from the score itself, but the associated reasoning. Knowing why a customer has given that score is much more valuable than the number itself. Without this knowledge, NPS becomes the simplistic benchmark and provides little more than a comparison score to your competitors.
These insights, from real people, let your business know what you’re doing right, and where improvements are required. Instead of knowing where you stand within your industry, you begin to see how you’re perceived by your customers. This is the beginning of a truly customer-centric focus, and an area that many companies are struggling to grasp, resulting in a stagnation of NPS and loss of growth opportunities.
Guiding growth from understanding
Analysing the text data, not just the NPS number, should be at the core of any business seeking to improve its customer experience. You need to be able to identify key issues and themes that drive customer satisfaction if you hope to act upon them. This process should be repeatable and unbiased, providing complete transparency to management, allowing for strategic business decisions to be made and customer satisfaction improved. Tools such as Kapiche can assist in taking large open-ended surveys and quickly breaking them down into coherent, powerful insights.
Armed with this knowledge, you can begin to take action. Instead of jumping from one problem to the next, or missing the key issues entirely, customer concerns can be addressed methodically, efficiently and cost-effectively. You can start to build frameworks that direct the business towards addressing issues impacting consumer behaviour, rather than increasing internal indicators. This new focus can lead to significant gains, with research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) finding that increasing customer retention by just 5 per cent can lead to a 25–95 per cent increase in profits.
Beyond the NPS survey to an NPS strategy
Making the change to a customer focus is no mean feat. A key requirement is a dedicated customer analyst (we spoke about this in detail here), but it also requires buy-in from all levels, strong leadership and a willingness to change across the board. That’s where having documented customer insights can help to drive change across departments and align silos across your business. Once implemented, it is important to keep track of progress towards business targets to continually improve customer satisfaction.
In the case of NPS, it can be difficult to identify how customer feedback on individual topics is tracking over time. This is another case for unstructured data analytics. By reviewing ongoing customer feedback and comparing over time, you can begin to see emergent themes and get an understanding of how certain business decisions are affecting customer feedback. If these are moving favourably, then you can continue on your current path. Otherwise, it’s time to go back to the drawing board.
NPS done right - the Bendigo Bank case
When it comes to customer experience, the most successful companies focus on understanding their customers and predict their behaviour. One such company is Bendigo Bank, who have been working with Kapiche to gain a greater understanding of their NPS results. In the second half of 2017, they saw an increase of 12.5%, taking them to +27 and on top of Forrester’s Australian Banking Customer Experience Index.
This growth was built around their customer-led metrics framework, a company-wide shift from internal statistics to external feedback and insight. And this shift has seen success. Recent half-yearly financial results showed a 6 per cent growth in total income, a result that managing director, Mike Hurst, attributed to their focus on customers.
Bendigo Bank used their customer insights to hone in on three pillars: attracting new customers, pleasing existing customers and business growth. This encompassed everything from brand awareness, responsiveness and their ability to meet the needs of customers. None of this would have been possible without going beyond the NPS number itself.
NPS is a vital mechanism to understand where you stand with your customers. It provides many benefits and has shaped countless customer experience programs. But these are only truly successful when the company understands the whole picture. Utilising the unstructured component of your surveys lets you make informed decisions and build strategies that lead to positive growth, both in customer satisfaction and NPS.