The Net Promoter Score (NPS) vs Customer Effort Score (CES)
It’s been 14 years since the Net Promotor Score appeared in a scientific article as “The One Number You Need to Grow”. Today, there isn’t a boardroom meeting imaginable without the Net Promotor score (NPS) as important KPI. Nevertheless, the Customer Effort Score (CES) is increasingly gaining ground. The CES is quite a new metric that also addresses the relationship between customer satisfaction and loyalty. Both metrics have their pros and cons. When do we need to use which metric? And is it really necessary to choose?
The Net Promoter Score – NPS
The Net Promotor Score is based on the idea that an organization can divide their customers into three categories: promotors, passives and detractors. The customers can be categorized by asking one simple question: “How likely is it that you would recommend [organization X] to a friend or colleague?”.
- Promoters: the customers who answered the question with a 9 or 10.
- Passives: the customers who answered the question with a 7 or 8.
- Detractors: the customers who answered the question with a 6 or lower.
The Net Promoter Score is the percentage of promoters minus the percentage of detractors. Note that the NPS can also be negative.
The main critique on the NPS is that it does not measure the actual customer behavior: customers make a prediction about their future behavior when answering the NPS question. However, scientific research has shown that customers find it easier to assess a recent and real experience. In addition, critics argue that it is not only important to measure the likeliness of recommendation to others, but mainly the customer’s eagerness to continue to do business himself or to even enlarge his commitment. Unfortunately, the NPS does not offer this perspective.
So why does one use this metric so much? The great strength of this metric lies in its simplicity. With just one simple question, two key points are measured: customer loyalty and future financial growth. Promotors will after all remain the customers of your organization, while there is also accretion of new clients. Also, each employee within your organization will understand the NPS after a brief explanation. Hence, the popularity of the model makes it easier for marketers to use the metric and benchmark results.
The Customer Effort Score – CES
The Customer Effort Score is based on the finding that customers ‘punish’ an organization easier than reward them. News about a bad service-experience usually reaches twice as many people than a good service-experience. For this reason, reducing customer dissatisfaction yields sometimes more than increasing the customer satisfaction.
The Customer Effort Score charts how much effort a customer needs to put in during his or her customer journey. Elements such as time, money and risk are understood as effort. When measuring the CES, the focus is on a specific process of service, and the customer is asked to review this process by the criterion of difficulty/ease. It is necessary that the customer has been in contact with the specific point in the process that is being measured. The amount of effort experienced by the customer is measured by prompting the question: “How much effort did you personally have to put forth to handle your request?”.
The customer can answer this question on a five-point scale, with the lowest score standing for very little effort and the highest score for a lot of trouble. A low score implies that the process took the customer little effort. The chance that this customer will turn to the competitor is therefore low – why change when the service runs smoothly?
Organizations can create loyal customers by solving problems quick and easy. The swift handling of complaints can provide a strong sense of loyalty by the customer. This way, one bends a negative experience into a positive experience
CES correlates well with customer behavior because of the complexity and multitude of products and services. In addition, the fact that a customer sometimes even gets different answers from the customer service depending on whom one speaks, causes frustration. Fix the basics first.
But ease is not everything. Compared to a fancy restaurant, it is easier to make a choice from the menu of a fastfood chain and to place an order, it is easier to eat (you do not even need cutlery) and the whole process takes just a minimum of time. Yet there are people who prefer to eat at the fancy restaurant instead of the fastfood place, even for a multiple of the price. Ease is only one dimension of the complex interaction between a customer and an organization.
Practical example NPS and CES
Imagine you are an energy supplier. Your main task is to make sure that your customers can purchase energy from you without problems. If this goes well, your customers will not shout it from the rooftops. Nowadays we find it quite normal that the light is on. Your service only stands out as soon as the light is off. At that moment, you can make a difference by solving the problem as quickly as possible, so the light is back on without too much difficulty for the customer. How well you handle this situation, is measured with the Customer Effort Score. Therefore, it is important that your customer actually had to deal with a power outage and with your service at that time.
But what if you are an accountant? First and foremost, customers come to you to check their figures or to put their administration into your hands. If your organization performs well on these tasks, your customers will be satisfied but it will not be striking. If you think as an accountant along with your customer and for example alert him on saving possibilities, you deliver an additional value without request of your customer. This added value and the exceeding of expectations leads to more satisfied customers who are delighted to share their good experiences. This recommendation intention can be measured by the Net Promoter Score. However, it is never certain whether customers will convert this intention into actual behavior.
Which metric is best?
Both metrics have their pros and cons. NPS measures the entire relationship between the customer and the organization and makes a prediction of the customer’s future behavior. A customer can recommend an organization but it is never guaranteed that the customer remains a customer. The NPS score is affected by the customer service but also by quality, price and brand. If an organization solely focuses on NPS, one will not be able to determine which customer service improvements will have the greatest impact on loyalty. From that point of view, the CES may be of interest. This metric only focuses on the ease of handling customer problems. So in this case, it is essential that the customer has been in contact with the questioned process. CES provides more useful insights to address the obstacles that appear during the service experience. NPS and CES provide answers to various questions but are strongly interrelated.
On which question an organization will focalize, depends on the specific aim of the organization. To that end, earlier practices can be an inspiration.