One subject came up as a question after a session and I couldn’t help chiming in – executive compensation on your customer KPI, most notably NPS http://www.netpromoter.com was mentioned, although others arose as well.   to be clear up front, I’m all for incenting the right behavior and having incentives that are rooted in improving the customer experience are great. 

What I’ve experienced and heard about from many in this field is that once you incent based on improving the customer KPI, you will often find an intense focus on how the number is captured, calculated and surrounded by debate on the score.  This results in a frustrating amount time spent justifying the number itself, rather than improving the customer experience.

So how do you get out of that hole?

The easiest way I’ve found is to change the focus of attention away from the number (whichever one you use) and instead focus on incenting for improvement initiatives that are based in customer feedback.  By doing this, you comfortably fit full control of the efforts and results into the hands of the executive being incented (which also encourages engagement) and you circumvent all of the arguments around the number. 

Do you have a customer based KPI?  Is there incentives for it?  I want to hear how you handle this challenge.

The next step is connecting NPS results to customer data to determine lifetime values.  Our data showed conclusively that the more likely a customer is to recommend, the longer they tend to stay with us.  Showing this proves the value of NPS.  It ties the results to dollars, which is key in determining which improvement issue to go after first. 

A simple ranking of the number of customer mentions without an attachment to dollars makes it very difficult for your key stakeholders in the business to develop ROI scenarios.  But ranking them with the addition of lifetime value makes a significant difference.  If you can also add in the reasons why customers cancel and the reasons why customers choose not to buy, you have a powerful business case for change that is built in lifetime value (dollars of potential revenue) and is anchored in NPS results.   How many of you are connecting your NPS results to customer lifetime value?

First subject – how detailed do you focus the survey?  A key decision early on in the program.  There are three levels you can measure NPS and each has varying degrees of impact. 

• At the top level, you have the brand NPS.  If your brand has strong recognition and powerful ties to decision making this can tie NPS.  This can be valuable to get a sense for your share of word of mouth but may not get you sufficient detail by itself to help you drive improvements. 
• The mid-level view or as I like to call it, the actionable level is the product NPS.  This is specific to the product they own and would they recommend it.  This helps a great deal because it can get you several why’s down in five why analysis within the survey itself and helps identify the strengths and weaknesses of each product.  It also ensures that the data is not skewed by a strong influencer (negative or positive), which can happen in the top level measure.
• The tactical level or operational view is really about areas such as service or training.  If you sell this in addition to the product, it can be quite valuable to measure at this level, in conjunction with what product the service or training was delivered on.  Because these are heavily customer facing, they are strong driver elements.

It’s important to look across the business you serve in from the view of customer.  This helps immensely when designing what levels to survey and how frequently to survey.  At the heart of any NPS program, in my opinion, is driving improvements in your customer’s experience, which results in a stronger company from a longevity and revenue perspective.  Ensuring that each survey point is purpose designed and driven towards gaining you actionable data is core to your survey design.  When you have that purposeful leveling structure, you know how detailed your survey needs to be, which means you get to keep it short and focused.  How do you structure your NPS survey?

I’ve often said that the NPS question itself (and the resulting score) are the least important parts of an NPS program and survey.  Before I anger anyone, please note that I said least important, not that they aren’t valuable at all.  What is more important, in my view, is the “why” for the score given and “what would it take to improve”.  This is where the listening gets good.

Once you have all that great data from your customers, it’s time to turn it into actionable information.  That’s done by taking the NPS data and tying it to other key data.  That’s going to vary for your business but it could be market channel, customer value, number of customers, retention, country, product, brand… well, I think you see where this could go, right?

Customer feedback that’s just a number that everyone watches and argues about is not really all that helpful, is it?  The real power comes from the program you build around the NPS data you collect and the tools you develop as a result.  Taking action on customer feedback and letting your customers know they are heard.  And who doesn’t want to buy from a company like that?