Output NPS /CSAT is not the same as Input NPS/CSAT for ROI construction

NPS /CSAT

NPS/CSAT attitudinal measures (I use the terms interchangeably) are all very well but companies make a fatal error when they confuse Output with Input in the design of their touchpoint metrics. Too many times I have seen companies try to apply an NPS/CSAT measure to all and sundry items which (a) fails to action anything as a result (b) encourages a ‘tie us in knots’ mentality.

Consider this. ‘Ease of use’ of say website is a great output you might want to improve. Note the importance of the output being written in ‘attitudinal/ emotional’ language a customer might say to themselves. You may even relate NPS/CSAT on this measure as correlating highly with some behavioural measure.

Company X now targets itself to improve its ‘ease of use scores’ by 10% on the year.

But what does ease of use mean?  Here we get to the nub of the issue.  Ease of use like most Customer Psychology measures is a ‘Formative’ variable. This means that like the concept of ‘a person’ it comprises many parts (legs, arms, etc) but those parts are generally independent of each other (when you raise your arm, your leg doesn’t rise as well!).

Why is this important?

Well if ‘ease of use’ is formed of many parts – the look of the website, the font size, the download speed, the click through speed, the way the content is written as well as internal variables such as how one department speaks to another... – but only the output matters, you cannot then seek to isolate its individual components in an ROI formulation.

If you were now to take the logic of Output ROI into this Input ROI you would be committing a fatal error.  Questions like, what is the ROI of the click through speed, the ROI of the font size or even the ROI of how one department speaks to another are ‘impossible’ to demonstrate in isolation even though they are critical to formulating a better ‘ease of use’ experience.

Hence, after you quantify your principles, you must move from Science mode to Art (creative) mode.

For a physical example consider a car. A customer could rate the ‘speed and performance’. You now might want to increase this output rating (or judgement) by say 15% year on year (i.e., quality performance improvements).  So far so good, but now if you move Output ratings into Input you might start looking at developing an ROI on the quality of the wires going into the engine. Of course, even though it is fundamental to performance, it is unrateable, an ROI would fail at this level and you would do nothing.

Management Implications

1. Be careful not to pull your Output NPS/CSAT measures into your Input NPS/CSAT measures.  This means you must identify the principles (key moments) that count in the mind of the consumer and then moving into creative mode to formulate the inputs (any ROI barrier at this level will be like trying to put an ROI figure to those wires in the engine). Of course, you still need to demonstrate success, but you do that through piloting.

2. Always base your ROI on customer impact, best judged by both hard metrics (spend now) and soft attitudinal metrics (CSAT/NPS or Preference/ NEV (net emotional value) – what the customer actually thinks and feels about you (not the same as how much they spend!). This is important to avoid the ‘junk mail’ effect i.e., acquisition rates rise, but your customers hate you and their tendency to habitually stick with you or look for an alternative supplier becomes eroded (the propensity towards ‘search behaviour’).

3. Consider that customers only rate based on current knowledge, embed and pilot innovation. Making it up is highly valuable in a re-design. Culturally this means openness to innovation and a reduced dependency on the failings of quantitative research (see: The 10 Things wrong with Quantitative Research).

Steven Walden is VP Consulting and Thought-Leadership for Beyond Philosophy. Steven has 17 years Strategy Consultancy experience directing and designing strategies for major B2C & B2B firms. At Beyond Philosophy, the Global Customer Experience Consultancy, he is a Thought Leader and Innovator, directing engagements to assist leading firms to transform through Customer Experience. A world-leader in emotional experience his skills lie in innovation, thought-leadership, strategy consultancy and Qual/ Quant research. He is a regular speaker at conferences, blog writer, CE Trainer and international author.Follow Steven Walden on Twitter: @Steven Walden