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What NPS and Customer Effort Score do for customer retention in B2B

Written by Joep Verberne | Apr 29, 2024 12:39:35 PM

"Everyone knows NPS. But by itself, it is often inadequate in measuring customer satisfaction."

Virtually every B2B organization understands that a satisfied customer over time creates more revenue. We employ support staff, account managers and business developers who continually work to keep key relationships warm for a reason. Yet many organizations still struggle with structurally increasing retention and lowering churn. A major reason for this is that they often lack the right processes to properly measure and monitor customer satisfaction.

The definition of customer satisfaction is quite broad:

The result of a measurement we use to express in numbers how satisfied a customer is with a product, service or specific experience he/she has had with your organization.

Now, everyone is familiar with the Net Promoter Score, which expresses customer loyalty in a number (promoters minus detractors equals NPS).

However, the problem with NPS is that this survey is sent out periodically.

For example, once a year. The sentiment that you as a customer have with a product or service is then strongly based on the most recent experience.

For example: does your customer have one of your machines running in the production line, and was a support issue unexpectedly picked up too late by your department, causing his machine to temporarily shut down and he did not meet his quota for that week? Then chances are that the NPS survey will be completed - with that less good experience in mind.

Annoying? Yes, for both parties! Justifiable? Maybe not, if the service was good the rest of the year.

NPS does not identify bottlenecks in the customer journey

Especially not when a situation occurs, and the memory is still fresh in the mind. And that is just crucial to be able to keep a finger on the pulse in important links of the process!

(To emphasize the importance once again - acquiring a new customer is 5 to 25 times more expensive than retaining an existing one.)

Of course, you want to be able to identify and act in a timely manner on that which could jeopardize your customers' satisfaction. Often, however, this information is scattered among different colleagues and departments. Periodic surveys such as NPS - however valuable - only give an indication of the quality of your service. After all, your customers are in constant contact with your organization, and they don't look at your organization as a collection of separate individuals, but as a whole.

Why is collecting feedback so important?

Some key benefits of receiving customer feedback are:

  1. You gather insights to improve products / services
    Taking into account and acting on expectations increases the degree of loyalty of customers with your organization.
  2. You work actively to increase customer retention
    By collecting feedback you offer a listening ear and let the customer know that you want to improve the usability and quality of your product and/or service. A customer who feels heard is more loyal.
  3. You identify satisfied customers (who can act as promoters of your organization)
    Satisfied customers are essentially marketers too! They are often open to telling others about your organization, solicited and unsolicited.
  4. You can make informed choices
    With feedback, you validate the feelings or opinions that people in your organization may have about something. Choices are not made based on gut feelings or incidents, but using hard numbers. An issue may seem very pressing because one customer is blowing up high, while there may be 9 other customers walking around with a completely different problem.

Measure how easily customers solve problems with the Customer Effort Score

The Customer Effort Score (CES) is a method of measuring customer satisfaction based on the ease with which customers used your product or service, or the ease with which a problem was solved. Based on a five-point scale, this can be queried.

Prerequisite for collecting the Customer Effort Score is that you collect it immediately after a key milestone or contact moment. For example: immediately after closing a support ticket. Or when someone has read an article on your website or knowledge base about resolving an issue. Using the results, you can identify how to improve the customer's support experience.

What does the Customer Effort Score not tell you?

Customer Effort Score gives you a very good picture of how an important milestone or contact moment in the customer journey is perceived. It is therefore less suitable for finding out what someone thinks of your organization, service or product in general.

Therefore, when measuring customer satisfaction of your B2B business, make the distinction between 2 "axes": Support and Loyalty

  • Support:
    With the Customer Effort Score you measure specific make/break moments in the customer journey. The goal is to discover bottlenecks in the customer experience in a timely manner and be able to act on them. Support is often such an important moment, especially in B2B.
  • Loyalty:
    The NPS score is asked periodically (for example once every 3, 6 or 12 months) and gives you a general picture of the loyalty of your customers.

Which knobs are you going to turn?

Both scores serve as management information / KPI at the organizational level and are the signal to dive deeper into the data and determine where to turn the knobs. This way the "standard" process of keeping your finger on the pulse takes place efficiently and you as an organization determine where to prioritize follow-up actions that are more labor intensive.

Would you rather know how customers think about a specific aspect of your product or service (zoom in)? In that case, a Customer Satisfaction Survey can help.

Collecting, securing, analyzing feedback: with which tooling?

First of all: the process comes first! Don't just start using tooling if you don't have a clear idea of what you want to achieve. In the blog "Do you know which customers will leave tomorrow?" you can read how to set up a solid framework for collecting feedback.

Are you already a step ahead? And do you want to give the framework/process hands and feet with suitable tooling to handle tickets and measure NPS and Customer Effort Score?

I wish you much success in measuring the satisfaction of your customers!