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Wednesday, January 17, 2024

Back to Basics: Why Gathering Feedback Needs to Be More than Just NPS

Note: This piece is written by Zach Golden, a Consultant for Anova, about his first-hand experience in seeing the importance of giving customers a voice.

A few months ago, I was sitting in a meeting with the Head of Service for one of Anova’s clients, a large retirement services organization with thousands of clients across the country. We were discussing the current state of their customer base including satisfaction and retention.

The Executive was talking about the steps his organization was taking to determine which clients were loyal, referenceable customers, and which ones were at risk of leaving. His response was relatable to many companies. He said, “We do pulse checks of our customers multiple times throughout the year, almost whenever there is an interaction with one of our service reps. We send them an online survey to fill out asking for an NPS score, and all the answers come back with great responses. But then we lose a bunch of clients at the end of the year and our salespeople want to know why we can’t retain the customers they sold.”

This problem is indicative of a trend that has overtaken the marketplace: the over-simplification of customer satisfaction research.

The Net Promoter Score is meant to be a relationship metric, not transactional. However, so many organizations get sucked in to trying to quantify the interactions with their customer base. These organizations tend to lose sight of the forest for the trees. Some organizations obsess over each touch point, but fail to understand how the overall relationship with their client is being perceived.

In the case of our retirement services customer, the friendliness of their call center representatives resulted in high NPS scores because their clients were pleased with the cheerfulness of the service personnel. However, these same customers were dissatisfied with the overall relationship because there was little proactive communication or help offered to them, particularly during tax and reporting season.

Customers need to be heard from. They need a platform to voice their satisfaction and dissatisfaction about all aspects of the relationship. They need someone to listen to them and ask questions about specific pain points. A simple NPS metric cannot deliver that detail.

In-depth phone conversations serve as a contrarian approach to gathering feedback from today’s overly web-surveyed customers. They allow the person to feel more valued because their feedback is actually being heard, instead of being lumped in with all the other web surveys they receive after every transaction at the supermarket, coffee shop, or car wash. The conversations let customers voice their opinions on a wide range of attributes impacting their entire relationship.

It is estimated that it costs 7 times as much to acquire a new customer than to retain an existing one. At that cost, keeping current clients as satisfied as possible is a necessity for companies looking to improve their bottom line. What is the most effective way at ensuring clients are satisfied? Actually listening to what they have to say.