Research

The problem with customer satisfaction surveys—according to the inventor of NPS

The problem with customer satisfaction surveys—according to the inventor of NPS

Renowned business author and strategist Fred Reichheld is sick and tired of customer satisfaction surveys. In an interview with Bloomberg Technology, the former Bain & Company consultant says CSAT surveys have become less meaningful now that they’ve become inescapable.

“The instant we have a technology to minimize surveys, I’m the first one on that bandwagon,” Reichheld told Bloomberg.

Reichheld’s opinion on CSAT surveys wouldn’t be that surprising or notable if not for one minor detail: he was a leading pioneer in the use of CSAT surveys. In 2003, Reichheld introduced the concept of Net Promoter System (often referred to as the Net Promoter Score, or just NPS for short) in the Harvard Business Review article “The One Number You Need to Grow.” Used to measure customer loyalty, NPS asks a single question: “How likely are you to recommend X?”

Because of its simplicity and elegance, the NPS has seen wide adoption since Reichheld’s article was first published. Companies of all sizes from virtually all industries now use NPS, including Hubspot, Airbnb and JetBlue Airlines.

Two big disadvantages of NPS scores

So why is the inventor of NPS growing tired of the very same thing he advocated for? The Bloomberg article highlights a couple of problems.

The first one is survey fatigue. According to Bloomberg, the growing need for customer feedback to drive product innovation and the increasing thirst for customer data are encouraging companies to spam their customers with more and more surveys.

Unfortunately, as companies nag customers for more input, they get less insight out of it. (Response rates for ad-hoc surveys, for instance, are down.)

Response rate for ad hoc surveys

Too many surveys with too many questions turn off consumers,” notes the article. “[Consumers] who do respond often do not make it through the whole survey, especially if it’s longer than a couple of questions.”

Another issue: many employees have figured out how to game the NPS system. As both CSAT and NPS have gained traction among the majority of Fortune 1000 brands, many companies started tying bonuses and other incentives to these metrics.

Today, it’s not uncommon for staff to explicitly ask customers to give them a perfect 10 in their CSAT surveys, often offering additional assistance if customers aren’t 100 percent satisfied. But when employees pressure customers to give them high marks, the accuracy of the NPS results becomes questionable.

The even bigger issue with NPS

In The Enterprise Guide to Customer Experience, Tyler Douglas, chief sales and marketing officer at Vision Critical, dissects the various pros and cons of measuring customer experience, including NPS and CSAT. In the e-book, Douglas highlights one critical issue with NPS not mentioned in the Bloomberg article.

“The problem with NPS is that, while it can tell you if customers are likely to recommend you, it can’t tell you why,” writes Douglas. “NPS can’t tell you what about an experience makes a customer want to recommend you to a friend or not.”

CSAT and NPS surveys are sent to customers after the purchase is done, so by the time the results are analyzed, the information is already outdated. This “built-in lag,” according to Douglas, lessens the effectiveness of these methods.

“Like CSAT, NPS only addresses a single part of the customer journey and is by definition reactive.”

A better approach is to cultivate a two-way, ongoing relationship with customers. Douglas recommends engaging with customers frequently and building your understanding of them over time. In particular, he recommends the use of insight communities—groups of thousands or even hundreds of thousands of customers who opt-in to be a part of a group that offers regular feedback and suggestions to improve products and the customer experience. 

“By cultivating long-term relationships between customers and brands, insight communities build trust and allow companies to learn about who their customers are, how they behave and why,” says Douglas. “Insight communities allow brands to learn about customers progressively over time—unlike the one-off survey data used to tabulate NPS, insight communities yield higher quality insight with each interaction along the customer journey.”

Ultimately, whether it’s through insight communities or some other method, what companies need to do is to cultivate understanding and empathy for the customer. CSAT and NPS scores fail to do that since they tend to treat customers as mere data points.

As more and more customers revolt against traditional surveys, the effectiveness of NPS and CSAT scores will only continue to decline. As Reichheld implies in the Bloomberg article, one possible solution is to “minimize surveys.”

Beyond that, however, to improve their innovation strategy and enhance the customer experience—two important levers of customer satisfaction—what companies need to do is to focus less on measuring stuff and focus more on engaging with their customers in a more meaningful way.

RELATED: Get The Enterprise Guide to Customer Experience to learn more about the pros and cons of NPS and customer satisfaction surveys.

The Enterprise Guide to Customer Experience (CX)



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