How Did We Do?
If you have shopped, ordered, traveled, purchased, scheduled, contacted, reserved, or otherwise interacted, in any way, with a business in the last several years, you have likely received an automated email, probably from several of those businesses, enthusiastically asking, “How did we do?” If your experience has been anything like mine recently, the answer is, “Pretty damn awful.”
These customer satisfaction surveys almost universally ask the same question, worded in exactly the same way: “How likely are you to recommend [COMPANY] to a friend, relative or colleague?” followed by a 0-10 scale, from “Not at all likely” to “Extremely Likely.” Companies have always sought to understand the satisfaction of their customers, but the preeminence of this one clinical question that you’ve likely been repeatedly harassed into answering many times, stems from the near cult-like following of NPS®.
Created in 2003 by a partner at the consulting firm, Bain & Company, the heavily-trademarked Net Promoter Score, or NPS®, is regarded by many businesses as a nearly sacred measurement of business performance. An estimated two-thirds of the Fortune 1,000 use NPS, believing it to be the singular, holy metric that indicates everything from customer satisfaction to future business growth. The math of NPS is essentially that only responses of 9 or 10 matter—these so-called “promoters” drive enthusiasm, adoption, and word-of-mouth growth. Responses of 7 or 8 are labeled “passive,” while ratings of 6 or lower are “detractors”—people who bad mouth and diminish your brand.
The appeal of NPS is its promise to reduce the incredible complexity of an entire business down to a lone integer. A cottage industry has cropped up to help companies improve their NPS score—just search for “net promoter score” on Google and you’ll see their ads. Like many business fads, NPS has been contorted and abused. Employees and executives, many of whom are compensated, at least in part, by their company’s NPS scores, have devised ways to game the system. Before the pandemic, NPS increasingly felt like a promotional vehicle or a way for businesses to feel good about themselves, rather than an authentic measurement of customer satisfaction.
Then, of course, COVID happened. The dubious utility of NPS pre-pandemic now feels like it is teetering on the edge of irrelevance in our post-pandemic economy. For many businesses, my reaction to receiving these earnest emails, fully expecting me to give their business a 9 or 10 rating, has been, “Are you kidding me?” Do I really need to give a zero to Orbitz for inexplicably canceling my son’s airline reservation the day before his flight home for Thanksgiving, forcing me to spend 4 hours on the phone with their underpaid offshore call center agent? Do I really need to give a zero to Budget car rental for having one agent staffing their counter to check in two dozen customers, waiting over an hour only to be told the car I reserved was unavailable? Do I need to give an NPS score at all to the manufacturer of my new iPhone case? It’s an iPhone case. Yet, each time, within 24 hours, that annoying email arrived asking, “How did we do?”
What I want to tell the CEOs of those companies is that NPS may work as a peace-time metric—something for your executives to obsess over when the business is largely functioning well. But it’s not a very effective war-time metric. And many businesses, particularly in the services sector, as well as the customer service jobs across a range of industries, are simply not functioning very well. Even apart from the crisis of COVID, the reality at many companies is the customer experience is under assault. Categorized as a cost center, the customer service function is one that companies have long tried to offshore, automate, scale back, or eliminate entirely. Even more so during COVID. Those jobs which might have resulted in an answered phone call, a prompt resolution of a problem, or an efficient interaction, are increasingly understaffed or unfilled.
And the challenge isn't only on the company side. Employees are increasingly unwilling to take these underpaying, often demeaning, service sector jobs—sometimes described as “dirty work.” Despite stubbornly antiquated minimum wage laws, wages are rising. In the leisure and hospitality sector, for example, wages have increased by an annual rate of 18 percent, but employment in that industry is still down more than 9 percent from pre-pandemic levels.
The suddenly in vogue economics term for this phenomenon is “skimpflation.” Rather than increase the price of their goods or services to afford paying a reasonable wage, companies “skimp” by providing a diminished version of their offering. Even so, many are substantially raising prices, while the quality of the customer experience they offer diminishes.
In fact, what actually seems to be happening is a larger recalibration of our economy. For too long, we’ve enjoyed low prices for everything from restaurant meals to airline tickets, without considering the low wages, poor working conditions, and lost jobs such prices necessitate for the workers in those industries. Like tectonic plates stretched to a breaking point, the reconciliation of these market forces will cause disruption for some time in our economy. As consumers, we will need to acclimate to paying more to get less, and doing less of the things we could afford pre-pandemic.
But until we find a new equilibrium, until our expectations recalibrate to a new reality, until supply chain issues are solved and open positions are filled and hours-long waits are no longer the norm, don’t expect a 9 or 10 when you ask me, “How did we do?”