I was recently in a new client’s office discussing the merits of using Net Promoter Score (NPS) or Top Box Overall Satisfaction (OSAT) as the key customer experience metric. That lively discussion highlighted the differences in the two metrics. At Market Force, we think about and use them in very different ways—and it has to do with the exact question being asked.
NPS asks “How likely are you to recommend [brand name] to a friend or colleague?” The question focuses on engagement with the brand itself, and very likely reflects everything from the brand reputation to the products offered. Consider Apple and the iPhone as an example. However, if you are interested in measuring a transactional experience in a multi-location business—we advocate using a different question: “How satisfied were you with your experience at this Apple location?” The questions then become focused on the experience in the store rather than the connection to the brand itself.
In Market Force’s customer experience (CX) management practice with multi-location businesses, we see both metrics being used. We recommend using a 1 to 5 scale, with 1 being not at all satisfied and 5 being very satisfied, or delighted. We report top box OSAT as the measure of choice. There are two primary reasons for this choice. First, it’s very actionable at the location level. Based on absolute and relative benchmarks, our clients can set performance goals for every location unique to their individual needs. Second, our panel research clearly shows that competition in every industry is very tight. Receiving a 4 instead of a 5 on a satisfaction metric means anywhere from a 2x to 12x difference in likelihood to recommend. To be competitive you must create a best-in-class/top box experience; you must delight, not just satisfy, your customers.
Our financial modeling work has found that overall satisfaction—and the critical drivers of that metric—predict revenue growth metrics, ranging from same store sales growth for restaurants to revenue per available room for hotels. Our survey design practice advises implementing both questions—satisfaction with the experience and brand recommendation—to get both views. And we clearly advise not being solely dependent on NPS as a metric for your multi-location brand. Your operations teams may see a NPS result as intangible and very difficult to improve their score while specific transactional experiences may seem more in their span of control.
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