Remove Red Tape to Improve NPS, Retention at Telecoms

Working in market research, it sometimes feels like the metrics I use on a regular basis are not aligned with how the real world perceives them. Certainly research provides interesting, important and insightful measurements to clients, but how many average citizens are familiar with survey design or data analysis?

Recently a good friend of mine, Nicholas, expressed some strong feelings about a measurement tool I’ve run into often but taken for granted—Net Promoter Score (NPS), designed by Fred Reichheld, Bain & Company and Satmetrix to measure customer loyalty. NPS is based on a simple question: How likely are you to recommend the company/product/service to your friends and colleagues? A respondent rates this likelihood on a scale from 0 to 10 and, based on the rating, falls into one of three categories:

  • Promoters (score 9-10)
  • Passives (score 7-8)
  • Detractors (score 0-6)

To calculate a company’s NPS, one takes the percentage of customers who are promoters and subtracts the percentage who are detractors. NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). Nicholas cares about NPS not because he is particularly interested in market research or branding but because his employer uses it to measure employee performance. You see, Nicholas works in customer service for a multinational telecommunications company, and when customers run into trouble, he is one of many receiving inbound customer service calls.

NPS to Measure Employee Performance
When an agent completes an interaction with a customer, the customer receives a survey to rank his/her willingness to recommend the company to friends and family. Follow-up questions ask for the customer’s rating of the agent, how the call was handled, timeliness of resolution and general customer service experience. The bonus structure for agents is built around their respective “Willingness to Recommend” (NPS) scores at the end of each month. Not many get high enough scores to earn the bonus as a supplement to their base wage, even if they perform well on other measures of satisfaction. It is not uncommon for customers to score reps highly in customer service-related areas but be a detractor for NPS.

While low NPS is frustrating for many customer service reps like Nicholas, research shows that NPS is, in fact, tied closely with customer satisfaction. So why might a knowledgeable and courteous rep not see the results of their effort reflected in NPS? NPS is impacted by other factors in addition to customer service—but even within customer service, the result of an interaction might not be entirely in the hands of the representative.

Satisfaction with Telephone Reps
A recent study examining relationships between NPS and satisfaction on the transaction level shared the impact of drivers within “Satisfaction with Telephone Rep.” Respondents rated their satisfaction on multiple attributes, including whether the rep:

  • Made [the interaction] easy
  • Answered in a timely manner
  • Showed concern for their situation
  • Communicated clearly and effectively
  • Clearly explained relevant information
  • Went above and beyond to help

Many of the factors explored in this study such as “showed concern,” “communicated clearly” and “clearly explained,” depend on the skill and demeanor of representatives. Yet whether an interaction is “easy” and “timely” is also dependent on corporate policy. The first representative a customer reaches may not have access to all necessary information, may not be permitted to handle the request or may not have the power to conduct necessary transactions. If the rep finds it is not in their power to help, the customer often gets bumped around between reps or departments, adding complications that negatively impact “timeliness” and “ease.”

As Nicholas points out, “People are fickle, and an agent’s score can tank for the month because of a customer angry with the company. Agents are not trained for PR or crisis management, and they have limited tools to address serious issues. Most low scores are given by customers who have a dispute or grievance with company policy, something utterly out of the agent’s control.”

Impact of Company Policies on Customer Experience
In telecommunications, where calling customer service is considered to be an inconvenience at best and a hassle at worst, the customer’s goal is to minimize the length of time on the phone to fix their problem. Customers who are forced to call multiple times or get shuffled around between representatives are more likely to be detractors and vocalize their discontent.

In the past six months, major telecoms have begun minimizing the cost of switching and sweetening deals to pull in new customers, making it even more important for companies in the industry to consider ways of improving customer retention. If a company is not performing well in NPS despite an investment in quality customer service representatives, it might reexamine the impact of company policies on the customer experience as a step toward streamlining the process. Removing some nonessential red tape can make these interactions go more smoothly, prevent frustration for reps and customers and potentially improve NPS and customer retention.

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