Around the globe, leaders and decision-makers are questioning whether NPS® and CSAT can truly explain customers' decisions and predict earnings. The market has recently seen many successful companies tragically closing their doors, despite these scores being at an all-time high.
The question is: Why?
The Windows Phone (confession, I owned 3 models and LOVED each one, still miss the platform to this day) was far and away the leader in NPS® over iPhone and Android in the US, with scores of 76, 63 and 57 respectively. Did that correlate to people deciding to purchase the Windows Phone over the other options?
It did not. The platform no longer exists. The list of companies struggling or failing for similar reasons keeps growing...
Toys R Us
...and the list goes on and on.
What two things do all these companies have in common? All had extremely high CSAT & NPS® scores and they're either gone, struggling, or completely rethinking themselves. Blockbuster still has one store in Oregon, and Toys R Us (the brand, not the department store) is mounting a comeback from bankruptcy with a strategy built around the experience.
Even extremely high CSAT & NPS® scores don't translate to future success for companies. Think of Bose — they decided just last month to close their stores in the US, Europe, Japan and Australia, despite boasting an NPS® score of 78. The industry average for Consumer Brands and Electronics is just 45. And yet, they're closing their doors in 4 continents.
So, why don't satisfied customers equal profitable businesses? How do companies keep falling into this pattern?
Because NPS® and CSAT can't explain the "why" behind the buy
While Satisfaction and recommendation metrics do a great job gauging customers' emotional connection to brands, they only scratch the surface of what the customer actually wants to talk about. And they don't explain the most important decision of all: to buy or not to buy.
I highly recommend Fresh Market and Whole Foods...but I do more of my shopping at Kroger and Publix. I'm not shopping at ALDI or Walmart either, even though they charge less.
We can all stay at a Ritz Carlton and be highly satisfied....but where do most of us actually stay? Hilton Garden, Hampton Inn, Courtyard. Some people will say that price is the motivation. But while price is one driver of that decision, it isn’t the main factor for many. I'm not staying at a Motel 6 or Super 8 even though they're cheaper.
Why is that?
Because at the time I made the decision to book the hotel or shop for groceries, the ones I chose were more "worth it" to me at that moment. The CSAT and NPS® scores that I would have given Ritz Carlton, Fresh Market and Whole Foods had no bearing on where I chose to spend my dollars.
The opposite is also true. Ryanair's share price is up 50% over the past 5 years...yet I haven't spoken with a single person that is highly satisfied by their experience with the airline. The comfort of first-class isn't the main factor for their frequent fliers.
High NPS® & CSAT scores do not correlate to customer decisions, future success or longevity in any meaningful way. Those metrics utilize a static survey using the same exact questions for each respondent and do not take into account different regions, climates, cultures, demographics, perspectives or personas.
They are not providing you insights into the last and most powerful conclusion that we all make before choosing to spend money with any company: “Is it worth it to me?”
You may be surprised what micro-details about your product can push customers into "worth it" territory. What features do you normally consider when buying a car, for example? Maybe you're a fan of the classic look, or you want something sporty. Maybe the brand status means everything to you...it's got to be a Mercedes, or a Rolls-Royce, or a Cadillac.
Or maybe you're like a friend of mine's wife, whose search brought her to two mid-size family utility cars that were very similar in all of the primary features like cost, engine, safety, gas mileage, etc. For argument's sake, let's say they were a Honda and a Toyota.
Here's the kicker: all of those features turned out to be secondary in her final decision...it wasn't the brand, the relationship with the dealer, or any other core features. The deciding factor? One car had a trunk net, and the other didn't. It may not seem like much, but that's a powerful insight that can translate directly to financial results — the kind of insight that traditional metrics can't tell you on their own.
What makes you "Worth It?"
Traditional metrics don't get to the core of why customers choose you over your competition, or what exact factors motivated that decision: what motivating factors have the strongest impact on their behavior, or the micro-perceptions and experiences that tipped the scales.
Businesses have come and gone at an ever-increasing pace since the start of the information age. The speed of change has never been faster, and it takes more than satisfaction and recommendation to keep up.
What makes you the most "Worth It" choice for your customers? Stop asking questions about what you think they want to talk about, and start "Listening without asking" to discover what truly motivates them to choose you or not: your worth!
Net Promoter Score® and NPS® are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.