NPS - The Hunt for Schrödinger's Cat

Welcome to our bonus extra minisode, where we invite you to listen in as our experts discuss the NPS score, and whether it’s a useful measure in today’s data-rich world.

Presented by Sue Carter. Featured Guests Stephen Priestnall & Richie Hester.

Recorded & Edited by Mr Anderson Limited.

Transcript

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Sue Carter: 0:05

Hello, and welcome to our 'minisode' our extra episode of the joy of CX. I'm Sue Carter. And today instead of our usual podcast, we're giving you a little look behind the scenes of a discussion at oomph. Now as part of our exploration into the world of CX, and how we use data to inform and support our decision making. At oomph within our team, we've been looking at NPS, which is the Net Promoter Score. Now, if you haven't heard of that it's a market research metric based on a single survey question that asked respondents to rate the likelihood that they would recommend a company product or service, etc. Now, we had a bit of a discussion about this, we thought we thought about what the score was telling us, but crucially, how relevant we think it still is, and whether we might be able to improve on that process to help understand the customer and the customers needs. So in a room, we had Richie Hester, who will also hear on our recent episode about CX and data. And I'm CEO, Stephen Priestnall, and a few other of our colleagues. And Richie talked us through his view of NPS as did Stephen and how perhaps it could be improved. So, I'm going to hand over to them now. And you can now listen to some of the conversation that they had.

Richie Hester: 1:37

The background on this? Yeah, it now is a good time to challenge NPS as a universal customer metric. It may be very strong in some instances, but maybe meaningless in others. Yeah, and I do mean meaningless, I think other organisations are already starting to look at this and think about it, as witnessed recently by Stephen Priestnall.

Stephen Priestnall: 1:57

So, in organisations that have an interface with end customers, and that could be b2b or b2c. This historically, it's come a lot out of b2c, but it does work b2b as well. They, probably 15 years ago, they started striving for a thing that would say, well, what tells us whether we've got a good relationship with our customers that actually makes our business better. And a model was created called a Net Promoter Score

Unknown: 2:25

I'll tell you when it was, it was 2006 and it was Bain

Stephen Priestnall: 2:27

So i wasn't far off, by 15 years. Yes. The idea was, if an individual is likely to promote a brand or a service or a business, then that indicates a high quality of customer service. Customer experience wasn't really a term at the time, it was more of a customer service. And then a whole, so Bain launched this thing and a whole bunch of consultancies made money out of creating their version of a net promoter score model, and essentially meant going into an organisation creating a survey founded on the principles of net promoter score, and then populating, inserting that survey into customer experiences. So intervening in customer journeys at various points, point of sale, point of service point of complaint. And the organisation would then score itself on net promoter score on the NPS, and as a score of zero to 10. Essentially, there's more to it than that. Anything, 8, 9, 10 means essentially, you're doing a

Richie Hester: 3:38

9 /10,

Stephen Priestnall: 3:39

9 / 10 you're doing as well as you can, if you're at 910, that means

Richie Hester: 3:42

you're a promoter

Stephen Priestnall: 3:43

you are an active promoter, Apple, which typically scores top top top only ever really scores 8 to 9. So very few people ever get 9's/ 10's. If you're in the four to 8, 5 to 8?

Richie Hester: 4:00

No 7 to 8. Yeah it's a tough,

Stephen Priestnall: 4:03

that's, that's then,

Richie Hester: 4:04

Neutral Passive they call them

Stephen Priestnall: 4:05

neutral, passive, okay? It goes. So that means that, okay, you're not doing anything wrong, but you could do better. And then below that, once you're scoring under that, then you're, you're essentially losing people out of your brand as a consequence of service. So where that's got to over the last five years, probably it's becoming a tired metric. It's becoming perceived as really linear.

Richie Hester: 4:28

And it's applied lazily everywhere. So whoever works, gas companies will do it. Banks will do it, everyone regardless of how relevant it is to them.

Stephen Priestnall: 4:37

So it's starting to get to lose traction as a thing. So previously, you would have a board saying, What's your NPS? Just tell me what the NPS is. And then they'd say, if it's 3, well, our job is to get it to 4 next year, and everything would be focused around getting NPS from 3 to 4. So of course, what you do is you'd find out when the survey is, were being inserted, you then go and fix that bit. And then that job done, because I guessed what's gone on. But of course, that doesn't reflect the overall customer experience. It's it's. So it's a bit like a Shroedinger's Cat thing. It's like once you open the box of NPS, you've kind of, you've lost the point of it, because you're measuring the thing as

Richie Hester: 5:20

Nice comparison!

Stephen Priestnall: 5:21

So if you don't know Shroedinger's Cat that's another story, a longer one,

Richie Hester: 5:25

that's a scary one.

Stephen Priestnall: 5:29

The point is that it's now it's got that kind of Emperor's New Clothes about it. And

Richie Hester: 5:35

it's just one score. So you take all your nines and 10s. So 80 of our survey replied 9 and 10, 100 replied 0 to 6, take whatever's there 100 from 80, your NPS score is minus 20. With that one score they look at all the time

Stephen Priestnall: 5:53

sorry. So Richie is right, the bit I missed was you'll get a minus or a plus score. So you get that's what I was getting confused by. So you have these, what are you, what are your 9's and 10's? where you're 8's and 9's and what are the rest? And you add all those up, and you get a positive or negative. So yeah, that's what I was saying about Apple. So I think Apple scores like plus 60%, or something, isn't that? Yeah, so it's plus 60,

Richie Hester: 6:19

which is as good as you're going to get

Stephen Priestnall: 6:19

As good as you're gonna get as the

Richie Hester: 6:20

but like you said, it's a lazy, self combination between promoters and detractors. And if you're kind of in the game of thinking about NPS, you want to be thinking of adding plus 20 upwards as kind of a, once you're in plus 20 upwards you thinking, Okay, we're kinda doing alright defeating metric because different industries and different organisations different, different customers are all going to behave differently.

Stephen Priestnall: 6:45

So I was at the conference at the Quirks Conference, which is a research conference last week, and this was a presentation. It was co-presented by a think a digital agency that dabbles in CX specialising in subscription model, membership organisations like Netflix. And, arguably, BT, or things that you pay a monthly subscription for. That's where their their specialism is, and they're partnered up with a research agency. And they, their idea was to challenge NPS, challenge brand tracking surveys, which is another metric that people use to say, how good is our business doing. And they proposed that actually, there are some more fundamental measurements, of customer experience than what NPS does.

Richie Hester: 7:45

So basically, the problem with NPS is it kind of makes an assumption that all customers are the same, all their needs the same, all business is the same, all offerings are the same. Therefore, you can apply this metric. And it's just not the case. And even if you do use it, it should be calibrated differently. So that's kind of where we're starting from. So yeah, we'll challenged it by just going back to real basics first. So, not all customers are the same so let's think about customers. Think about why they're customers, think about what they actually need. And, based on that have a reflection back of will how relevant is NPS in different cases, and then overlay the criteria on top it will just start building the sort of screen we saw before just potential for what have what we could look at, I think a real strength oomph has got, and it's a USP, is the ability like you said then to not have to be data driven. You don't, this is a very good agency, if you're not coming from the data says this we'll follow it. There isn't anything we can't do anything. You and Sue, particularly good at putting stakes in the ground and let the data work to fill it. So it does give us a major strength here. So there's I think there's 3, challenging NPS, there's three or four ways forward, one is doing nothing. Yeah. But there's three different levels of approach we could take here. And I've just, as I've been going, I thought of some things just pertinant or relevant to me to just throw into sort of help shape and thinking a bit. So this doesn't give us an answer. It just shapes the question, hopefully so we can start thinking about it. Yeah, and it's based on what I've seen in my time, and I've deliberately not referred to anything else. I've never looked back at your presentation such a bit. We do build on it. There's no copyright issues. We didn't make anything from anywhere. It's just purely what I've seen in life. Yeah. And don't get hung up on terminology,

Stephen Priestnall: 9:32

Yeah. yeah. If I say 'requirements' and you think is 'need' it shouldn't really matter yeah. And how does this fit in with need states? I think it's integrates and complements it and it's like Broadway in New York it just cut through the middle and just pulls it all together kind of thing. Yeah. So right customer, so everything in NPS is just what does the customer think and there's endless permutations of customer. So top level is an individual, typically b2c. A group, people forget this one. So a key example of group is a couple in a bank account. Yeah, banks do not know who their customer is, if you and your other half have a bank account, they're really unclear who the customer is, is it both? What they tend to do is the prime primary stakeholder, which is the first signature on the form nothing else. Yeah. And it's, it's really complicated. Organisation, now i wonderded if there's something something else around network, you know, I don't know, like a Facebook group or something? I don't know. It's interesting.

Richie Hester: 10:30

Yeah. But it's just worth thinking along that that column is anything to expand on. Yeah. And then the state they're in. And this actually matches exactly what they said, I kind of agree with him on this. It's, there's a customer, someone who may offer a as a prospect has recently offered a new customer is offering an existing customer, or who no longer offers, which has lapsed customer, and whether there's more than that we think

Stephen Priestnall: 10:55

Your use of that term offer seems a bit odd to me

Richie Hester: 10:57

No that's going to come into the next bit. Now, one off payments, you kind of alluded to this already, there may be more between one off payment and regular subscription. There might be more Yeah, I think there's some really important ones that people don't think about. One is information. Yeah. And my relationship with Google. Yeah, all I give them, I've never given them a penny in my life information. And then this one's even

Stephen Priestnall: 11:24

if you're not paying anything you're the product, but that principle.

Richie Hester: 11:28

Yeah, exactly. And then this one is even bigger, I think, and which is attention and i'll come on to that but an example of that is Spotify. I've got it later. Yeah. I don't pay them a penny. But what I give them is I give them my time, and I listen so that they can flog me adverts in between, Yeah? And is there, I just wondered, is advocacy in itself an offering? An example would be; you write restaurant reviews, come to my restaurant and you can have a free meal if give us good write up? And I don't know if that's relevant or a sidetrack.

Stephen Priestnall: 12:00

No, I think this is really interesting. That the value in a customer is more than the transactions fundamental thing that this is saying.

Richie Hester: 12:07

Yeah.

Stephen Priestnall: 12:09

Which has massive implications.

Sue Carter: 12:11

Yeah. I agree.

Richie Hester: 12:11

And so you might think, and just add more in there or sort of break them down. But they're just the kind of starting point,

Ross Anderson: 12:18

Or a click, a click sort of fits between somewhere between the notion and advocacy, right?

Richie Hester: 12:21

Very nice. Yes, yes. And then in return for, typically products and services, but again, I'd argue information, you know, that their relationships might have what you may pay, you're not interested in the product itself. You just want the facts. And this is a key one for me. And this comes out, this access. And this is Liverpool supporters Football Club, yeah, Liverpool Football Club, me and Tommy, we pay membership every year. So we're regular subscription. I don't care what they do. The only reason I do it to get tickets to the games, nothing else matters. They send me all this player recent opinion up nope, not interested. I want that day, when I think I want to try and get tickets, nothing else matters. So I think access is another one again, there might be more down there. But even just thinking of a customer like that you've got at least 250 permutations of what customer means we try to pick one score on top of that, and 250 different types of people. It's really difficult. Then this one, I think, why are your customers so why are you in one of these states? And there's, I think there's three reasons and there's necessity, benefit and fulfilment. And necessity is where you're trying to make something bad. Okay? Benefit is where you're trying to take something that's okay, and make it better or good. And fulfilment is where everything's fine, you just want more what's something more rewarding in your life? Maybe there's others but I think I think I can't think of any example of anything I ever buy that doesn't fit into one of those or a combination of them even yeah, so you're already going to get to 760 different customer types. So this is the way to kind of think about or think so if you think of a driver of why you're a customer wellbeing is a really good one because it fits across all three yeah? So it could be a necessity I'm depressed I need medical help. Yeah, I'm in a bad situation. I want to make it good. I'm going to look for product services. It could be something where life's fine but I want to make it better. Yeah, I'm gonna find out quite nice meditation classes to make life even better still, and it might just be fulfilment I want to appreciate fine art just purely for my own wellbeing and I think those three are all driven by a wellbeing need but they're totally different, one's a need, one's a benefit, one's a fulfilment okay, it could be the wrong words you can look at better words but it's the kind of thing and you can work through these and there's just one here so after physical health so now I'm ill and need it checked out healthier food to help me lose weight. Is there a fulfilment one here and the one I thought of, i haven't put one in, but you're fell running, you could say is primarily a benefit any purchase any relationship you have is because it's keeping you fit? But you probably enjoy it as well. So

Stephen Priestnall: 15:02

yeah,

Richie Hester: 15:03

Even if it didn't make you fit, it would still possibly fit in the third category

Stephen Priestnall: 15:06

Fulfilment piece no, I think it is fulfillment piece. Yeah, I think there's a lot of Yeah.

Richie Hester: 15:11

Okay. And they can keep going so well. So you mean either we're skint we need to do something we're going to be repossessed or we've come into some money let's invest it. I can't see there's any point where it's fun playing the stock market you do it for the benefit or the necessity kind of thing. And you can work your way down in this endless not endless I came up quite a few just comfort. You know, it's it's either a necessity or a benefit.

Stephen Priestnall: 15:33

The merging between benefit and fulfilment is kind of, I'm struggling with a distinction between benefit and fulfilment.

Richie Hester: 15:39

Okay, I would argue fulfilment has no intrinsic value. I'll come to some in a minute. Just for fun. Totally. I think. So qualification, this is a really key one. Yeah. Enlightenment, I want to appreciate fine art. There's no benefit of me having a picture of x it's just a fulfilment. It's just nice. And then this one. I've earned that chocolate cake. Yeah. It's not making life better. It's just a reward. And that festival sounds like fun. So there's stuff which is purely for yourself, just to make yourself feel more fulfilled. It's not making you healthier, fitter, financially safer. It's just, in fact, chocolate cake is a good example. It's actually undermining everything else. Yeah? But it's something you would buy as a fulfilment for yourself, no benefit in it.

Ross Anderson: 16:24

Is there a charity element, giving back if that's...

Richie Hester: 16:28

Nice, I should have, good point actually, charity, charity would fit only in fulfilment really wouldn't it? I suppose you can argue this, suppose I want to invest in charity, because of x and y is happening in my family but but just in thinking along these lines, you're suddenly getting 11,000 already just without you guys adding stuff in, different states of customers just using those few drivers. So why are you a customer? Because I have a wellbeing necessity or wellbeing benefit or a well, wellbeing fulfilment. So one extreme how relevant is NPS?

Stephen Priestnall: 17:09

Sue, I don't think that Richie needs us!

Sue Carter: 17:15

Yeah!

Richie Hester: 17:17

Right. Yeah, so I think an area when NPS is mega relevant is something like this. Yes. And this is survival is our house is about to collapse. We need a builder. Yeah. This guy scores massive on TripAdvisor, or whatever, you know, Trustpilot, whatever. He's done loads of work in the area and everyone is delighted. So we're thinking of moving house and I said to our our window cleaner he saw the For Sale sign and they said, you're moving. I said he and he said, would you do us a favour? Would you let the next people know that we do a good job and I thought spot on that that kind of thing, you know, is where NPS is really important. Recommendation. And then when it's very irrelevant, I think totally irrelevant, is back to I want to buy some fine arts. Yeah. You think this I want to base it on my opinions only. And I'm actually passively, passionately disinterested with what anyone else thinks. And to me, I just think this is the biggest piece of genius mankind has ever produced that picture. Picasso. I don't know why I just love it. I don't care what anyone else thinks. I just love it unconditionally. Yeah. The cheapest print you can get is 4000 pounds if you do it on the cheap. But yeah, I just think NPS is utterly irrelevant. Doesn't matter if everyone else in the world hated that. Or if everyone else loved it. It's irrelevant to me. It's just, so I think those are the kind of extremes. Yeah. And then you get the decision

Stephen Priestnall: 18:38

and fell running is the same thing. Most people go you're mad.

Richie Hester: 18:41

Yeah.

Stephen Priestnall: 18:42

Why on earth do you run up and down mountains?

Richie Hester: 18:43

Parachute jumping yeah. So yeah, maybe it's the case that NPS is much more relevant on the necessity side and disappears in value as you move towards fulfilment. Just a thought.

Stephen Priestnall: 18:58

Awesome work Richie, it's really interesting.

Ross Anderson: 19:02

It feels like it's any reaction to how society is changing in terms of NPS was relevant when things were much more, you know, the needs were much more fundamental post-war, sort of,

Richie Hester: 19:12

when the bank, when you go to see the the bank manager,

Ross Anderson: 19:15

Now that the idea of fulfilment is as much of a valued need as, or more of a valued need than it was, and so you know, there's a business in that, yeah,

Richie Hester: 19:26

it's important for you think of presents, when you buy presents for your kids nowadays, they've got everything they need on the phone, so it tends to be skydiving or what you know, experiences fulfilment type stuff. So there is definitely a move towards it in some ways.

Sue Carter: 19:48

So, we will leave it there and I hope that Stephen and Richie have given you a lot to think about, particularly when it comes to that NPS and data and YOUR customer experience. We'll see you for the next podcast. Our next one is entitled UX and CX 'a match made in heaven'. We look forward to welcoming you then. Thanks and bye