The pandemic broke NPS. Here's why and what insurers should do...
If you look to customer experience metrics to evaluate how products and services are received, buckle up.
In normal times, we use customer experience metrics like Net Promoter Score (NPS) to provide valuable insights into the performance of products and services. A successful launch of a new feature might be measured by an improvement of just 1-2 points. And similarly, a small downward change in NPS can signal the failure of a change in process.
Of course, these are not normal times. NPS scores across all sectors are experiencing wild swings, often with no changes to program features or processes.
This creates a real problem because NPS metrics are relative, as much as absolute. If the whole scale shifts for everyone, it makes it difficult or impossible to measure current perceptions and satisfaction relative to past scores, or relative to other providers and industries. When that comparative relationship breaks, NPS scores become less insightful. They’re still telling us something, but what?
Plummeting NPS scores could reflect that consumers are rating their experiences with services more critically. It could also be a matter of a shift in expectations. Between the COVID-19 pandemic and myriad other stressors, let’s consider how the landscape for services has been disrupted both in terms of service delivery and consumer expectations, and how to take that context into account for NPS scores in insurance and related industries.
Low tide for NPS
According to a July 2020 report by Qualtrics’ XM Institute, aggregate NPS across 20 industries dropped more than 50% from May 2019 to May 2020. In a few related industries, for example, we find:
- Insurance is down 13 points;
- Auto dealers are down 22 points; and
- Rental cars and transportation are down 28 points.
Why is consumer sentiment so low?
For one, many industries were partially or completely shut down for public safety concerns related to the pandemic. This led to widespread layoffs and supply chain disruptions. Packages took longer to receive. Customer service phone calls took longer to get answered. Vital services were closed. If you tried to get a new driver’s license, you likely learned that it was a fool’s errand. Service actually did tank.
Financial (in)security from layoffs on top of general uncertainty caused shifts in consumer behavior. For some industries, there was unforeseen growth. Suddenly everyone is using Instacart for groceries and ordering restaurant delivery online. Sales of sweatpants and yoga pants jumped, while sales of jeans dropped. Companies that experienced surges in interest couldn’t staff up fast enough. And when they did staff up, their staff didn’t have the usual experience and tenure that consumers had previously noted. Again, service actually did tank.
As businesses — and entire industries — were unable to keep pace with these rapid shifts, consumers grew less satisfied. On top of real impacts to service levels, most people are also dealing with tremendous anxiety: from the pandemic, politics, trying to work from home while schools are closed, murder hornets, and all the rest of it. Does that anxiety leak into customer experience feedback? Yes, it does. Even when service didn’t actually tank.
Symptoms of anxiety disorder were approximately three times more prevalent in the second quarter of 2020 as compared to the second quarter of 2019, according to an August 2020 report by the Centers for Disease Control and Prevention (CDC). In a May 2020 interview with WWL-TV News, Dr. Ken Jones, chief of psychology at the Southeast Veterans Health Care System, noted, “Our whole world is changed right now, and one way you can stress a person is to just change our everyday routines.” And beyond the pandemic, a recent survey from the American Psychological Association and Harris Poll found that 68% of American adults were stressed about the election.
Measuring the ’2020 factor’
Looking to account for compounding stress in our own NPS scores, we ran the numbers and what we found was fascinating.
- In certain instances, NPS scores varied between 2020 and 2019 even when controlling for the same level of service. In other words, our data indicates outside factors (a pandemic perhaps?) are having a meaningful and measurable impact on NPS scores year over year.
- When service exceeds expectations, customers are more appreciative, contributing to a lift of more than three points in NPS, on average, relative to 2019. This is a large improvement, and indicates that consumers recognize and appreciate any efforts to go the extra mile.
- When service doesn’t meet expectations, customers are exceedingly harsh, contributing to dips of over 16 points in NPS for certain events, on average, relative to 2019. Patience and understanding, in other words, are in short supply.
How should insurers respond?
Customer experience professionals agree that this means that those of us who look to customer experience metrics to evaluate how our products and services are being received should probably buckle up. In a recent blog post, Jeannie Walters, founder of CX consulting firm Experience Investigators™ by 360Connext, writes, “Customers will be dealing with challenges of their own, and your support teams may be challenged with absences, shorter shifts, overburdened technology, or other challenges. During these times, customers may be more likely to complete that post-call survey and let you know exactly what they think. They may be taking out some stress on your contact agents and the survey itself. They also might let you know about those amazing moments of empathy that gave them hope during a hard time.”
With all this in mind, don’t lose sight of what’s important. While the NPS scores are a victim of the pandemic, what remains constant is the power of NPS’s second question, which asks why the respondent gave that score. Customers often supplement their score with powerful insights. These insights should be cut into various buckets to better understand root cause and opportunity. Detractors provide detailed opportunities for improvement, Passives give insights into how to go from good to great, and Promoters share intelligence on where you can wow and delight. Regardless of what happens to the baseline NPS score, do not lose sight of the power of continuous improvement on your services and products by missing out on the reasons behind the score.
Even during ‘these uncertain times,’ we’ll keep using NPS as our early detection system. We’ll continue to investigate any sudden drops in scores. We’ll keep enhancing our products and services with the goal of improving customer experiences, and we’ll continue using NPS as a means of evaluating performance. At the same time, we will also not be surprised if NPS metrics continue to be a little unpredictable for a while.
On a personal note, be extra nice to your waiter (if you’re able to dine out). Smile under your mask. Take some deep breaths. And don’t forget when you fill out your next consumer survey that your service provider is in this with you.
Chris Small (csmall@agero.com) is Agero’s vice president of product. Chris and his team focus their relentless attention on delivering high quality solutions for the company’s customers and clients, yielding an exceptional end to end Roadside Managed Services Experience. Previously, Chris held the position of VP, Customer Experience, where he leveraged his more than 16 years in customer care and service provider network management to improve stakeholder relationships through technology by understanding their needs and passions, designing their digital ecosystems with safety, security and simplicity in mind, and effectively leveraging data to identify process defects and improve outcomes. Chris holds a bachelor’s degree from the Berklee School of Music.
These opinions are the author’s own.
Related: