Is There A Better Way To Measure B2B Customer Satisfaction Than The Net Promoter Score (NPS)?
The Net Promoter Score (NPS) is a widely known measurement of customer satisfaction developed by Fred Reichheld in 2001. Its popularity and broad use have been attributed to its simplicity and transparent methodology yielding in higher response rates. The question is framed as follows: “How likely would you be to recommend Company X to a friend or colleague?” (1 least likely, 10 most likely) The insight behind this question is that a recommendation is a personal reflection on Company X, so truthful answers are far more likely.
But is the NPS robust enough for complex B2B customer relationships? Its simplicity allows B2B companies to easily get feedback from many different individuals across geographies and accounts. But in the end the NPS is just a number. We believe in order to use NPS as an effective B2B customer-relationship management tool the rating methodology can be improved and the question should not be used in isolation. Let’s take those one at a time.
The Net Promoter Score calculation methodology versus The Referral Rating methodology.
The NPS score is calculated by subtracting the percentage of low scorers “Detractors” (rating 1-6) from the percentage of high scorers “Promoters” (rating 9-10), therefore removes any respondents that score 7 or 8. But excluding those rating 7 or 8 removes a large proportion of respondents. Based on the Customer Relationship Consultancy B2B norms, 47% of respondents score 7 or 8. We believe that a methodology that excludes almost half of all respondents is essentially flawed. Moreover, focusing only on the extremes can make the results very volatile and therefore lead to wrong conclusions. This is especially of concern for small datasets for example when looking at NPS scores for individual key accounts which are an important KPI in the B2B context.
That is exactly why we have developed “The Referral Rating” (TRR), which uses the Net Promoter Score question but takes the average rating of all the respondents. The Referral Rating methodology ensures the entire respondent population is represented and therefore the overall rating moves slower over times which is more reflective of the nature of B2B relationships.
NPS followed up with an open-ended WHY question.
Any metric of customer satisfaction is useful, but real insight comes from feedback, the WHY. Therefore, we believe the rating question should always be followed by ONE more open-ended second question “What makes you feel this way?”.
We’ve found that adding this one question to the NPS question is all you need to open-up a wealth of insights. The question is relevant to anyone responding regardless of seniority, job function or B2B industry because it does not guide responses but captures spontaneous “top of mind” reasons behind a customer’s rating. With question #2, we have the context we need for each rating to truly inspire action and improvements.
Fact is, you don’t need 25 additional questions to understand your operational and strategic performance, this one additional question is sufficient and the response rate is not compromised (our B2B global average response rate is 55%).
Finally, there is no effective measurement (B2B or B2C) without robust analytics and reporting capabilities to make the data actionable. Here at the Customer Relationship Consultancy we provide leadership teams with easy-to-understand reports that identify the key areas for operational, behavioural and strategic improvements, and empower you to take action with confidence.
Is there a better way to measure B2B customer satisfaction than the Net Promoter Score (NPS)? We say yes.