In a previous organization, I was brought in to build a customer experience program from scratch. We used NPS at the direction of our executive management team; they were adamant that we have a single metric to evaluate customer loyalty. Unfortunately, using NPS did not allow us to shape our business strategy as much as it was used for benchmark purposes and to punish or reward leaders of the respective business units.
In this organization, our response to NPS-defined detractors was to build a system that required the local manager to contact each customer labeled a detractor. Our hope was that the manager could resolve any issues customers had and convert them into promoters. This was a huge missed opportunity. Our more detailed analysis identified key customer pain points that should have been addressed at a global level before diving into the local issues.
With my prior company, our executive management team attempted to benchmark against other businesses using NPS. Within our own organization, we found four different permutations of how departments were measuring NPS—a real limitation to the credibility of any benchmarks. How could we know if the other organizations we benchmarked were measuring NPS using the same methodology? Also, the sources being used for benchmarking were third parties and not the firm actually measuring NPS.
By the time I left that company, many within management were satisfied by a belief that our NPS put us in the top 10 percent of like companies. They filed for bankruptcy seven months later and were completely out of business within one year of my leaving. Many factors contributed to this company’s failure, but it is hard to believe that if we were truly in the top 10 percent of like companies, in terms of brand loyalty, that the business would have collapsed so quickly.
At Cars.com we have been using WoMI, and it has finally proven something I have believed throughout my career—NPS is not the paramount metric for measuring customer loyalty. The challenge has always been finding an alternative method and obtaining enough data to prove this theory. Since we began utilizing WoMI, the data has proven, beyond a shadow of a doubt, that NPS was overstating our detractors.
We began using WoMI internally about a year ago when measuring our dealer satisfaction. For the first year, we reported WoMI alongside NPS to illustrate the difference in the two measures. After two quarters, we solely discussed WoMI when reporting out to our executive team, leaving NPS in as a data point to reinforce the increased accuracy provided by WoMI. Customer experience is a key objective in our balanced scorecard that is reviewed at a more detailed level quarterly. As we move forward, WoMI will be the metric used to illustrate promoters and detractors, ultimately driving key strategic decisions such as the allocation of resources or increased investment.
For Cars.com, the fact that WoMI is a more accurate measure of detractors than NPS is highly relevant, especially when it comes to our dealers. These are B2B relationships where our dealers are thinking about whether they would recommend us to someone else. Their first thought often centered on whether they would recommend us to their competitors. As a result, we often had dealers with mixed feelings about whether they would recommend us, but not because they were true detractors to our brand. With WoMI, we were able to see that NPS overstated our detractors by more than 120 percent.
— Josh Chapman, Vice President of Operations at Cars.com
Cars.com, which was recently named the Best Overall Customer Experience by Keynote Systems, is the world’s leading Internet usage research company. Cars.com is an online destination for car shoppers that offers information from consumers and experts to help buyers formulate opinions on what to buy, where to buy, and how much to pay for a car. With price listings, side-by-side comparison tools, photo galleries, videos, unbiased editorial content, and a large selection of new- and used-car inventory, Cars.com puts millions of car buyers in control of their shopping process with the information they need to make buying decisions.
Net Promoter, Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc. and Fred Reichheld. ForeSee is not affiliated with Net Promoter or Satmetrix Systems (and/or Fred Reichheld or Bain & Company) or any of its subsidiaries or affiliates. Furthermore ForeSee is not associated with, licensed by, endorsed by, or funded by Satmetrix Systems (and/or Fred Reichheld or Bain & Company), and no effort has been made to falsely suggest a connection with any of those entities or the products/services offered by Satmetrix Systems (and/or Fred Reichheld or Bain & Company).