6/26/2013Posted by John Caddell
For those who have not encountered these terms before, here are quick definitions: Net Promoter Score, devised by Fred Reichheld of Bain & Company in the 1990’s, relies on an “ultimate question.” “Based on your experience with this company, how likely is it you would recommend them to a friend or colleague?” The question is rated on a score of 1 to 10 (higher is better). Ratings of 9 or10 identify Promoters; 7 or8 are Neutral; and 0 through 6 are Detractors. The Net Promoter Score is obtained by #Promoters – #Detractors, and expressed as a percentage . NPS is now in wide use in businesses throughout the world.
Customer effort, a newer metric, is based on an entirely different premise. Rather than viewing customers as enthusiasts who are eager to recommend products to their friends and relatives, Customer Effort Score (created by the Corporate Executive Board and first published in the Harvard Business Review in 2010) sees customers as very busy people who want to get their jobs done with any supplier quickly and easily. The more effort they expend to transact their business, the less satisfied they are. Customer Effort Score is also based on a single survey question: “How much effort did you personally have to put forth to handle your request?” The respondent rates his or her effort on a scale of 1-5, and lower is better.
The roundtable discussion was very enlightening. The folks who spoke up said that Customer Effort Score was a better measure of individual interactions, while NPS was better at measuring the overall quality of the relationship. In other words, they both measured different things, and both were needed.
This article from the HBR Blog Network (“There Is No Single Best Measure Of Your Customers”) says much the same thing.
NPS is a very subjective measure – it describes customers’ deep emotions and is impossible to measure from objective data. It will always rely on surveys, and that’s fine. CES, we have discovered, is something that can be measured by interaction analytics, without having to ask the customer anything. This means that every interaction with a customer – voice, email, chat – can be scored for customer effort. That data can be aggregated and trended and used as the basis for projects to reduce customer effort. And we’ll discuss that in the next post.
[Photo by Insouciance via Flickr Creative Commons]