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Why isn’t my market research helping me improve my customer experience?

When presented with the issue of wanting to understand and listen to one’s customers, the all-too-common answer is an expansive in-depth market research campaign. Such responses are not folly but merely a result on the one hand intuition and on the other the vast array and weight of such survey types. But weight in numbers does not mean such a pathway is either correct or the best.

Market research is a great tool at measuring buying behavior, satisfaction with particular products or market opportunities that may exist. Strategic in its nature, it is a tool that seeks to answer larger questions often with the intent of creating new products or services, finding new segments or markets, etc.

The Net Promoter System® (NPS) is more a continuous process that drives small changes throughout the organization, with the goal being to fine-tune your business step-by-step in order to offer the best experience possible for your client. Additionally such feedback not only serves as input for these improvements, but as a means to start a conversation with your client and build their loyalty through engaging with them.

It is a system that focuses on addressing both customer loyalty and improving customer experience, whereas market research tends to cover many different things. The critical difference is that market research attempts to gather as much detailed information as it can. This is not the focus of NPS. Instead, the focus is on the highs and lows – the really good and the bad that is happening within your customer experience cycle. Knowing this helps a company prioritize which small changes to implement and thus improve their service.

Here then is the critical break between NPS and market research, such that market research and NPS are not at odds with each other but in fact have different priorities and investigate different aspects of companies.

To illustrate this, imagine two basketball teams playing a light training match against each other, with one told to practice set structured plays and the other fast counter-attacks. The objective not being scoring but to successfully carry out their designated modes of play. To those on the sidelines, one would think that both team’s objective is one and the same: to score. This though, is not the case at all, and just as in this example, such is the case with NPS and market research.

Ok, I understand that market research and NPS have very different goals, but is there a difference in their processes?

Survey length

To begin with market research surveys are significantly longer than NPS surveys and will take the client anywhere between 5 and 20 minutes to complete. Whereas NPS surveys are short and sweet, usually less than two minutes in length. NPS in its most basic form, is just one question, aimed at investigating customer loyalty and is traditionally formulated as such:

How likely is it that you would recommend company X to a friend or colleague?

Additionally, while this is the core question, many companies choose to ask one or two questions more, so that they may better understand why the customer gave them a certain score. However, many more questions than this and we start to venture out of the realm of what can be considered NPS. The result though of such short surveys means much higher response rates, reaching up to 60%* in particular cases, and in turn creating greater statistical significance for your Net Promoter Score.

Depth vs. actionability

Although lengthy, market research surveys allow one to garner information about very different aspects of a company and serve the purpose of helping to inform large “risky but potentially game-changing” strategic decisions. This is a very useful means of forging new pathways and creating new opportunities, but this is not case-by-case real-time customer experience management. On the one hand you have a system that gives you actionable insights and on the other a system that creates detailed overviews of sentiments towards a multitude of things – the problem lies not in choosing one, but truly knowing the issues and objectives you face.

Market research looks at entire data sets and thus is not able to be analyzed until all responses are collected. This can often take weeks, if not months to be finished. Whereas, NPS allows real-time feedback of individual customer responses that can be addressed immediately, be it saving at-risk customers or wishing to enhance already loyal customers.

While being such a short survey, NPS means that you do not need a team of data scientists to interpret the results. Market research surveys due to their length mean that a great many variables are created with a considerable amount of cross analysis possible, deciding what to analyze and the validity of each requires high levels of expertise. Although NPS can give you deep expansive information about your customer experience, the technicality of the process of analysis is not nearly as difficult as that of market research.

Longterm research

Furthermore, in asking one question that addresses your entire company, you are asking a question that is unchanging and quantifiable. Such that results can be tracked, monitored and acted upon over months or even years, as you continually resurvey your customer base. Although large market research surveys also create quantifiable scores, they are scores that are localized to specific touchpoints or departments and do not give a measure of the overall loyalty a customer has to your company.

Conclusion

ProcessesNPSMarket Research
Time for the customer40 secs – 2 mins5 – 20 mins
Response rate20 – 60%1 – 20%
Output100’s of date points/ per customer100’s of date points/ per customer
Actionable
Individual customer focus
Control questions

Both market research and NPS are invaluable tools in the current day market place. For those that wish to research new products or market opportunities then the choice is clear and in no way can NPS serve any function in this arena. However if you are interested in understanding customer loyalty and wish to improve your customer experience, then the reverse is the case, and the Net Promoter System is the way forward.

*Response rates based on reported response rates by CustomerGauge’s customers between 2013 - 2014.

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Next Up: Are you sending your survey at the right moment? - Relationship vs. Transactional Surveys [Webinar]

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