How to analyse Net Promoter Score (NPS) drop?
Net Promoter Score (NPS) is a widely used metric in internet businesses to gauge customer loyalty and overall satisfaction. A drop in NPS can indicate underlying issues with customer experience, product quality, or service, making it a critical focus area for RCA.
Detailed Example:
An online travel booking platform in India notices a significant drop in its NPS, which historically has been a strong indicator of customer loyalty and repeat business. The company aims to understand the root causes of this decline to take corrective actions and improve customer satisfaction.
Using the RCA approach:
- 1. Identify Metric Hierarchy: The NPS is broken down into its constituent categories of promoters, passives, and detractors. Additional layers might include demographic segments, booking categories, or interaction touchpoints.
- 2. Conducting EDA: The team conducts a time-series analysis to identify when the drop began and correlates it with any recent changes in service, pricing, or platform experience. Customer feedback is segmented to pinpoint specific areas of discontent.
- 3. Formulating Hypotheses: Based on the EDA findings, the team develops hypotheses about why the NPS has dropped. Possible hypotheses could include dissatisfaction with recent changes in service or platform experience, specific issues with customer support, or negative reactions to policy updates such as cancellation fees.
- 4. Identifying Analytical Techniques: Text analysis is employed on open-ended feedback to aggregate common themes. Correlation analysis is used to link specific service changes with shifts in NPS segments.
The analysis might reveal that a recent change in cancellation policies or an update to the user interface has led to increased frustration among customers, reflected in the NPS drop. Specific feedback from detractors might highlight areas like customer support response time or hidden fees as major pain points.
Takeaway:
Analyzing a drop in NPS requires a structured and in-depth approach to understanding customer sentiment.
By breaking down the NPS into its core components and employing targeted analytical techniques to dissect customer feedback and correlate it with business changes, companies can gain valuable insights into the root causes of customer dissatisfaction.
Armed with these insights, businesses can implement focused improvements to enhance customer experience, ultimately leading to a recovery in NPS and stronger customer loyalty.