Possibly one of the oldest and surest ways of knowing if your customers are happy with you is to simply ask them. Customers more often than not, are keen to share their point of view, and for a long time, customer satisfaction surveys were the most oft leveraged approach by Insurers of all sizes.
However, as customer demands evolve, and the way of serving them also changed, there was a dire need to understand a customer’s life journey in totality – up to the last interaction or transaction. The customer satisfaction survey methodology was successful only in getting a customer experience dipstick based on the last transaction or interaction.
The introduction of the Net Promoter Score (NPS) framework by Bain and Reichheld tried to address this gap to a certain extent by attempting to identify the customer’s probability of recommending the brand or service.
But there are key differences in the nature of the customer satisfaction (Csat) approach and the Net Promoter Score (NPS) approach, that insurers must understand to be able to improve overall customer experience and persistence.
1. Short Term vs long-term
Csats work wonderfully when all you need to measure is the sentiment immediately after an interaction. Say after a premium payment related call at the call center. Think of it like a spot or event-based assessment. It won’t tell you if the customer has been consistently happy or the likelihood of her being an advocate of the brand.
For example, if the motor policy renewal via the online channel was successful, the Csat will tell you that the customer is happy with the process and that the infrastructure supporting the process is working as it ought to.
On the other hand, NPS will help you assess the customer’s online renewal experience over the policy period, and across channels. NPS takes an aggregate view of the experiences to give a truer picture.
2. Retrospective vs futuristic
Since Csat scores are measured after event triggers, they do not have a predictive value. They are retrospective in nature. Sure, over time you could develop a retrospective trend but that won’t help in developing the next course of action.
Since NPS is tracking the customer journey and asking a customer’s probability of recommending the brand to someone, it is much better equipped to evaluate the ‘what next?’ question. By understanding the customer’s behavior, it becomes much easier to predict. By measuring NPS across processes and touchpoints, channels and products, an insurer can develop the next best action at each customer level.
3. Good to know vs actionable
I will go out on a limb and say that Csat is a vanity metric. A good Csat score is a great ego booster, but that’s all there is to it. It is a good number to have on your annual reports and website and share with customers. But it is far from being actionable. The reason for a poor Csat could be as trifle as a one-time poor interaction with the contact center. This is not really reflective of all the good interactions the customer may have had earlier, and completely negates the overall experience.
What makes NPS a more reliable metric(not necessarily the only one though) is the fact that if tracked and measured regularly, it will clearly point out the highs and the lows of the customer relationship. Process owners can then pick this insight and run with it to address the challenges.
4. Marketing teams’ job vs everyone’s ownership
Usually, there is only one team which is responsible for conducting and gathering the Csat ratings – the guys at Marketing. They draft the survey, run it, collate it and present it. Since the business or process owners may not be involved, it is quite possible that the context is missed out.
With NPS it is possible to get the process owners or practitioners involved in the entire process. From the front line folks who interact with the customers to the folks who manage persistency and new customer acquisition. Everyone. This makes NPS a strong framework to not only evaluate customer sentiment, but also develop a plan of action.
So which one should you use?
Yes, you read that right.
While Csat is indispensable to understand ‘in the moment’ sentiment, NPS can help you understand the customer’s journey.A lot of insurance organization are either using Csat or NPS, and very few are measuring both (Hurrah!). We’ve also come across instances where one is being confused with the other.
In our recent survey “NPS Maturity of Indian Insurers”, we observed that a majority of insurance providers aren’t clear with the post-survey actions. You can download the survey here.
We’d be wrong if we told you it’s ok to use either one. As a matter of fact, no customer metric should be used in isolation. While you need to understand the customers’ relationship, it is important to have a feel of their PULSE, at all times.