Today I learned about a more actionable metric for product teams than the Net Promoter Score (NPS) - namely the Customer Effort Score (CES). Leah Tharin explained on LinkedIn* why it is more useful than the NPS.
Introduction
You've probably seen the NPS survey before, most likely as a follow-up email after an online purchase: "On a scale from 0 to 10, how likely are you to recommend this product to a friend or colleague?”
By asking customers this single question, companies aim to measure customer satisfaction and loyalty. The score is calculated by subtracting the percentage of customers who answer the NPS question with a 6 or lower (known as ‘detractors’) from the percentage of customers who answer with a 9 or 10 (known as ‘promoters’).
The score is mainly used for company-wide strategy: - As a benchmark to track and quantify customer satisfaction over time. - As a starting point to delve deeper into why customers give a certain score. - As a way to predict retention.
While NPS is widely used by companies, many also underline its limitations. The most commonly heard downside is that by itself, the score is not enough to be useful or paint a complete picture. Another concern is that it is not detailed enough to be actionable. Leah Tharin dives deeper into the latter.
NPS is not for product teams
Imagine that you work in a product team. One day, upper management comes by and calls a team meeting. In that meeting, you're told that the NPS is 37, down from 42 last quarter. This is a red flag and a plan of action needs to be created as soon as possible.
What do you do?
What can you do? A NPS of 37 is not sufficient information for product to make targeted changes. It does not have inherent meaning. This is exactly why Tharin does not recommend using this metric for product teams.
She states that while on a strategic level the NPS may have value, on the operational level it does not. It doesn't identify the root cause of customer sentiment. Just because a customer loves your product, doesn’t mean they love every feature, and NPS doesn't offer specifics on what works and what doesn't for the customer. It is a statement about the overall product and is too high-level for product teams to be actionable.
Besides that, Tharin says, when your NPS drops it's usually already too late to make changes to the entire product. That's why she suggests to use the Customer Effort Score (CES) instead.
The Customer Effort Score (CES)
The CES is a one-question survey just like the NPS but instead of asking whether the customer would recommend the product to others, you measure how easy it was to interact with the product. Typically, the customer is asked "How easy was it for you to solve your problem today?" This is asked after the customers have performed actions such as making a purchase, signing up for a trial, or solving an issue with customer service.
The CES survey can also be sent out after the launch of a new feature to follow up on potential pain points, to learn more about the efficiency of your internal processes, or the overall usability experience. It is at this level of inquiry that Tharin says that product teams can get much better insights about the product.
CES for product teams
Now imagine another team meeting with upper management. This time, you hear that the CES for the new note-taking feature is a lowly 23 and you are asked to address this issue. What do you do?
You focus on just the note-taking feature as opposed to the entire product.
Granted, you still need more data to find out exactly what is wrong with the feature, but you are a lot closer to the problem than you'd be with NPS.
NPS declining: "Uh oh." 🧨
CES declining: "Aha!" 💡
-Leah Tharin
This is exactly Tharin's point. The CES focuses on feature-level feedback which gives product teams concrete insights to improve a product. Not only that, but the CES survey asks customers to review an event that actually happened while the NPS asks a hypothetical question. It is different data altogether. Both the granularity and the type of data provide the product team with information that is actionable and segmentable and helps direct the attention for improvement. It allows product teams to come up with an approach to improve the CES.
And in turn, that will positively impact the NPS as well.
Conclusion
Product teams do better to use CES over NPS. There is not much to disagree there. Product teams need ways to measure actual customer behavior on a more granular level and with more concrete feedback instead of intent. But that is not to say that there is no role for NPS in a business.
In my opinion, one is not better than the other. NPS and CES are not mutually exclusive. They simply measure different things. And it happens to be that the results of the NPS are better suited for strategic, high-level business decisions while CES results are better suited for operational-level decisions.
Sources
*Links to Leah Tharin's LinkedIn posts:
Other sources: