Impact Learning Systems


Voice of the Customer and Net Promoter Score: What's the Difference? Peggy Carlaw

At a CCNG meet­ing a few weeks ago, a dis­cus­sion arose about the dif­fer­ence between cus­tomer sat­is­fac­tion (CSAT), Voice of the Cus­tomer (VOC), and Net Pro­moter Score (NPS®). I reviewed the dif­fer­ence between CSAT and VOC in an ear­lier post. Let’s now look at the dif­fer­ence between Voice of the Cus­tomer and Net Pro­moter Score.

VOC is a mar­ket research tech­nique pio­neered by Abbie Grif­fin and John R. Hauser to pro­vide insight into a customer’s needs, desires, per­cep­tions, and pref­er­ences. For exam­ple, many Six Sigma com­pa­nies con­duct for­mal VOC stud­ies to gather insights from cus­tomers before they develop a new prod­uct, ser­vice, or process. The infor­ma­tion gath­ered is used to inform the design thereby clos­ing the gap between cus­tomer expec­ta­tions and the offer­ing of the com­pany. Today, many com­pa­nies use the con­cept to mea­sure cus­tomer loy­alty over time.

NPS®, on the other hand, sur­veys cus­tomers with one sim­ple ques­tion: “How likely is it that you would rec­om­mend this com­pany to a friend or col­league?” Based on their scores, respon­dents are grouped into Pro­mot­ers (score 9–10), Pas­sives (score 7–8) and Detrac­tors (score 0–6). The Net Pro­moter Score is the per­cent­age of pro­mot­ers minus the per­cent­age of detrac­tors. NPS® was devel­oped by Sat­metrix, Bain & Com­pany,  and Fred Reich­held, and pop­u­lar­ized in Reichheld’s book, The Ulti­mate Ques­tion.

Those of you who are already mea­sur­ing NPS® can take this a step fur­ther and look at what’s called the Net Advo­cacy Score. Coined by Alain Sam­son of the Lon­don School of Eco­nom­ics and Polit­i­cal Sci­ence and pub­lished in the Inter­na­tional Jour­nal of Mar­ket Research, the Net Advo­cacy Score is cal­cu­lated as the Net Pro­moter Score (which mea­sures intent) minus Neg­a­tive Word of Mouth, or the per­cent­age of cus­tomers mak­ing very neg­a­tive com­ments in the past 12 months.

A lesser known mea­sure­ment but one that makes a lot of sense to me is the Secure Cus­tomerIndex® devel­oped by D. Ran­dall Brandt, VP of Cus­tomer Expe­ri­ence and Loy­alty at Maritz Research.  A secure cus­tomer is one who is very sat­is­fied with the ser­vice, def­i­nitely will con­tinue to use the ser­vice in the future, and def­i­nitely would rec­om­mend the ser­vice to others.

Regard­less of what you call it, the big ques­tion is, how do you improve your cus­tomers’ expe­ri­ence of your prod­ucts and ser­vice so that they stay, buy more, and tell their friends? Net Pro­moter has some sug­ges­tions, Sam­son and his co-authors at the Lon­don School of Eco­nom­ics have an in-depth arti­cle titled, “Advo­cacy Dri­ves Growth” which will give you some ideas, and TSIA recently hosted a webi­nar titled, “Beyond NPS®: Using the Secure Cus­tomer Index® to Mea­sure Cus­tomer Advo­cacy.”  Fol­low­ing some of these tips, Netezza, an IBM com­pany and leader in data ware­house appli­ances, man­aged to improve their Net Advo­cacy Score 8% in 3 months. Mako Sur­gical, a med­ical device com­pany, focused on secur­ing cus­tomers and improved met­rics 2–7% within 6 months, includ­ing a 5% increase in cus­tomers who would rec­om­mend Mako to a colleague.

Accord­ing to Fred Reich­held, “A 5% improve­ment in cus­tomer reten­tion rates will yield between a 20 to 100% increase in prof­its across a wide range of indus­tries.” Sounds impor­tant to keep­ing the exec­u­tive team and share­hold­ers happy, right? So now that you know the def­i­n­i­tions, it’s time to put them aside, roll up your sleeves, and start mak­ing the required improve­ments to sat­isfy your cus­tomers, keep them loyal, and turn them into secure pro­mot­ers and advo­cates of your brand.

Peggy Car­law is the founder of Impact Learn­ing Sys­tems, a lead­ing train­ing com­pany spe­cial­iz­ing in improv­ing com­mu­ni­ca­tions between front-line employ­ees and cus­tomers. Peggy is co-author of sev­eral books pub­lished by McGraw-Hill, includ­ing Man­ag­ing and Moti­vat­ing Con­tact Cen­ter Employ­ees and The Big Book of Cus­tomer Ser­vice Train­ing Games.
Peggy Carlaw
View all posts by Peggy Car­law
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  • Net Pro­moter Score: Does improv­ing your Net Pro­moter Score (NPS) cor­re­late to improved busi­ness out­comes? — Quora

    […] 100% increase in prof­its across a wide range of indus­tries.” Impact blogged on this issue recently…This answer .Please spec­ify the nec­es­sary improve­ments. Edit Link Text Show answer summary […]

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