Identifying Reasons for a Low NPS Score
Table of Contents
Key Takeaways:
- A low or negative NPS score often results from poor customer experiences, product issues, and reputational factors.
- A low NPS score can have impacts like customer churn, brand damage, and financial loss.
- Organizations can improve NPS by using detailed customer feedback to enhance product and service quality, and by training frontline workers in skills that demonstrate empathy and reliability.
Causes of a Low or Negative NPS Score
Net Promoter Score, or NPS, is a popular metric used to measure customer loyalty and satisfaction by assessing how likely customers are to recommend a company, product, or service to others.
NPS is derived from responses to the question: “On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?”
Based on their responses, customers are categorized into three groups: Promoters, Passives (or Neutrals), and Detractors.
A low or negative Net Promoter Score is a signal that customers are unhappy or even likely to spread negative word-of-mouth about a company. Understanding the causes behind a low or negative NPS score is the first step toward improvement.
In this article, we explore the factors contributing to low NPS scores, so you know how and where to act to win back your customers:
Poor Customer Experience
Customer experience is the foundation for achieving a positive NPS. When customers encounter negative experiences – long wait times, inability to get answers, impersonal treatment – they’re more likely to become detractors, if not stop doing business with you altogether.
Several factors within the customer journey can lead to a low NPS score, including:
Unmet Expectations in Service
When a customer’s experience falls short of their expectations, it can significantly impact their satisfaction and loyalty. Overpromising in marketing and underdelivering in practice can create a mismatch between what customers expect and what they actually receive.
Consumer expectations are higher than ever, as prospective customers compare services across industries, and technology makes many parts of the customer journey easier.
It may not seem fair, but customers conditioned to responsiveness, personalization, and effortlessness will have less patience when those qualities are not provided.
Impact of Long Wait Times and Poor Communication
Long wait times for customer service, combined with ineffective communication, are major contributors to low NPS scores. Customers expect fast, straightforward responses, especially when they’re seeking immediate resolution of a problem.
Customers are more likely to be understanding or forgiving of service issues if you are honest with them and transparent about problems.
Inadequate communication during wait times, or difficulty reaching live support, can leave customers feeling neglected and impatient.
Quality of Support Staff
Customer support staff play a pivotal role in the customer’s perception of a company. When support agents are unhelpful, lack knowledge, or come across as indifferent, customers are unlikely to feel valued.
An untrained or overwhelmed support team can lead to unresolved issues, frustrating interactions, and ultimately, a drop in NPS.
Product Issues and Misalignment
In many retail industries, the product itself is often a root cause of dissatisfaction. In banking, a product can be an account, a loan, or even a mobile banking app.
If customers feel that a product does not live up to its promises or fails to meet their needs, it can significantly hurt NPS. Key areas of concern include:
Product Performance Shortcomings
If a product has frequent glitches, lacks essential features, or is difficult to use, customers may feel frustrated.
Recurring technical issues, a poor user experience, or inconsistent performance can leave customers questioning the value they’re receiving. This frustration from having to exert more effort than should be necessary can lead to customers becoming detractors rather than promoters.
Product-Customer Fit Problems
Misalignment between the product’s offerings and the needs of the customer base can also contribute to a low NPS.
Customers may initially try a product believing it is a good fit for their needs, only to realize later that it doesn’t fulfill their requirements. This gap can be especially harmful if the initial messaging or recommendations from a representative implied otherwise.
Insufficient In-App Guidance
In-app guidance helps users get accustomed to new products and features. When there’s a lack of helpful onboarding resources, it can create a frustrating experience for users, especially new customers.
Without adequate in-app guidance, users may feel unsupported and are less likely to become promoters.
Website and Digital Experience
A smooth digital experience is critical to sustaining customer loyalty, especially in banking where more people have shifted to digital channels for routine transactions.
Poor website or app performance can become a major deterrent for users who are seeking a seamless, user-friendly experience.
Website Performance Problems
Slow load times, broken links, confusing navigation, and inconsistent user interfaces can make customers feel frustrated and less inclined to engage.
A poorly designed or difficult-to-use website creates additional friction in the customer journey, making the user less likely to recommend the company.
Security Concerns
With data privacy a significant concern, especially where finances are concerned, customers expect companies to protect their personal information.
If customers perceive a lack of security in a company’s online platforms, they’re less likely to feel comfortable interacting with the brand, and this could influence their NPS score.
Trust is foundational to banking. Once that trust is broken, it may be impossible to recover. Being proactive in providing visible security is the best way to shore up your customers’ trust.
External Factors Affecting Reputation
A company’s image and reputation in the public eye, whether warranted or not, can also play a substantial role in its NPS.
Negative publicity, media reports, online reviews, and reputation issues outside of the customer’s direct experience can still influence their perception.
Negative Online Reviews and Ratings
Numerous studies show that potential customers often read reviews and ratings before making purchasing decisions.
If there are numerous negative reviews online, this can discourage both potential and existing customers from recommending the company. Negative reviews often signal to customers that the company may not deliver on its promises.
Company Reputation and Public Image
Corporate social responsibility, ethical practices, and alignment with customer values can significantly impact NPS.
A poor public image or a misstep in ethical areas may lead customers to see the company in a negative light, even if they haven’t personally experienced issues with products or services.
On the other hand, a business that acts on values widely shared by its target customer base is likely to strengthen its ties with that group.
Similarly, a company that shows its commitment to the community can bolster its image as a reliable institution with a stake in the shared success of its neighborhood or town.
Impact of a Low or Negative NPS Score
When customers are dissatisfied, they are less likely to remain loyal and more likely to share their dissatisfaction with others. A low or negative NPS score can have several adverse effects:
Customer Churn and Retention Challenges
A low NPS score often signals higher customer churn. When customers are unhappy, they are less likely to stay with you or do additional business with you, leading to lost revenue.
Because retaining customers is typically more cost-effective than acquiring new ones, a high churn rate can be financially damaging.
Damage to Brand Image
When customers express dissatisfaction through a low NPS, it can tarnish the company’s reputation. It can take years to build up a positive reputation as a business, but it can all be undone by one or two well-publicized incidents.
Negative word-of-mouth and poor online reviews can spread quickly, especially through social media, making it more challenging for a company to maintain a positive brand image.
Brand damage can also make it harder to attract new customers.
Financial Consequences
A low NPS score can lead to tangible financial repercussions. Customer churn, reputational damage, and the cost of acquiring new customers can collectively harm the bottom line.
Companies with consistently low NPS scores may also find it challenging to compete with peers in a crowded market, leading to missed revenue opportunities.
Strategies to Diagnose and Improve NPS
Improving NPS begins with identifying the sources of customer dissatisfaction and then implementing targeted strategies to enhance the overall customer experience. This means going beyond the number presented in NPS.
Here are some effective approaches to taking NPS in the right direction:
Gathering In-Depth Feedback
Collecting comprehensive feedback from customers is essential for diagnosing issues and identifying improvement areas. Customers are often more than willing to share their thoughts and feelings about their experiences.
But companies are often challenged to effectively capture and make use of this potentially game-changing intel.
Follow-Up Questions for Insight
Asking open-ended follow-up questions can help uncover the underlying reasons for a low NPS. Getting to the WHY of a customer’s reasons for their score is essential for taking action to improve it.
Follow-up questions allow customers to share specific details about their experience, offering valuable insights into pain points or motivations that may not be visible through the NPS score alone.
Tagging and Analyzing Responses
Categorizing feedback based on recurring themes, such as product issues, customer support quality, or website experience, can make it easier to identify patterns. Analyzing feedback at this systemic level can help companies prioritize and address the most pressing customer concerns.
Enhancing Product and Service Offerings
Investing in continuous improvement of products and services can lead to a better customer experience and ultimately boost NPS.
Leaders in innovation accept a certain amount of risk, but they also stand to reap the biggest rewards.
Continuous Product Improvement
Ongoing product development that incorporates customer feedback can improve the user experience. By addressing performance issues and adding useful features, companies can align their products more closely with customer expectations.
After all, if your reason for existing as a business is to meet the needs of your customers, you should have an accurate understanding of exactly what those needs are.
In-App Support and Onboarding
People learn in different ways. Incorporating options like in-app guides, tutorials, and self-help resources can make it easier for customers to get started with a product.
Effective, seamless onboarding helps users feel supported, reducing frustration and encouraging loyalty.
Improving Customer Service
Customer service is often a key factor in customer satisfaction. Focusing on both the speed and quality of customer support interactions can help improve NPS.
As the quality of customer service overall seems to decline, emphasizing this aspect of your business can be an opportunity to stand out from the crowd.
Speed and Quality of Responses
Shortening response times and ensuring that support interactions are helpful and efficient can significantly improve the customer’s experience.
Customers want fast, accurate responses to their queries, and improving support response times can address one of the primary drivers of low NPS.
Training Staff for Empathy and Efficiency
Customer service training should emphasize empathy and efficient problem-solving. When staff can demonstrate understanding and proactively resolve issues, customers feel valued, which can increase their loyalty and the likelihood they will recommend your business.
Leveraging Technology for Better CX
Integrating technology into the customer experience can help companies provide more personalized and convenient service.
However, it is important not to overlook the human dimension of customer service, especially when something goes wrong with the technology.
Automation and Self-Service Options
Providing self-service options, such as a comprehensive FAQ section or AI-driven chatbots, can empower customers to handle transactions and resolve issues independently.
Automation can also speed up support processes, allowing customers to get answers quickly without waiting for live support.
Just remember to have that human-to-human support – with a healthy dose of empathy – readily available for customers if they encounter difficulties with your automated options!
Customer Insight and Sentiment Analysis Tools
Customer insight tools that analyze sentiment in feedback can help companies understand how customers feel about their brand and identify areas for improvement.
Sentiment analysis provides a deeper understanding of customer emotions, helping companies proactively address negative perceptions.
Advanced Solutions to Elevate NPS
Beyond immediate fixes, companies can implement advanced solutions to sustain and grow their NPS score over time.
Resource Planning and Capacity Management
Ensuring that customer service teams are adequately staffed, especially during peak periods, can prevent long wait times and reduce customer frustration.
Proper resource planning helps companies maintain consistent service quality, even as demand fluctuates.
Using QR Codes for Enhanced Engagement
QR codes can streamline customer feedback by directing them to surveys or support channels. QR codes provide a convenient way for customers to share their experience, which can help companies gather valuable feedback and improve the NPS process.
Making the latest in time-saving technology like QR codes available also improves your chances of connecting with your more technology-savvy customers, including (but not exclusively!) the younger generations.
Turning Feedback into Action
Acting on feedback is essential for improving NPS. When customers see that their input leads to tangible changes, they’re more likely to stay loyal and become promoters.
Making the cause-and-effect of customer feedback obvious is a great way to drive the cycle of continuous improvement.
Conversely, your customers’ time is valuable, and they are likely bombarded with survey requests from all the companies they do business with. If you ask for their input and fail to follow through, your customers may be reluctant to give additional feedback in the future.
Measuring Progress and Sustaining Improvements
Setting measurable goals and monitoring NPS over time allows companies to track their progress and make adjustments as needed.
Regular NPS Check-Ins
Conducting NPS surveys at regular intervals allows companies to monitor trends and address issues as they arise. Checking in consistently with customers helps companies stay attuned to their needs and address any potential dissatisfaction early.
If you’re only checking in once or twice a year with your customers, you’re essentially getting a snapshot based on events that are already well in the past. Any strategy based on such information is outdated at the onset and less likely to be effective.
Real-time survey responses, conversely, give you insight into the current mindset of your customers. As a result, you will be operating from a more accurate and authentic source of knowledge, and actions you take based on it will have a greater likelihood of effectiveness.
Avoiding Survey Fatigue
Sending surveys too often can lead to survey fatigue, reducing response rates and data quality. To prevent this, companies should carefully plan the timing and frequency of their NPS surveys, ensuring they don’t overwhelm customers while still gathering meaningful insights.
Establishing the right cadence of survey requests can mean the difference between continuous, strategic, up-to-the-minute customer intel and an indifferent (or annoyed) customer base.
Visualizing and Sharing Results
Displaying NPS trends and sharing feedback results across teams can increase internal awareness of customer satisfaction.
This awareness promotes internal accountability, as it highlights the impact each team has on the customer experience.
When everyone understands the importance of NPS and the factors affecting it, it’s easier to coordinate efforts to drive improvement – because the organization is aligned to the customer-centric purpose of the organization.
In Conclusion
A low NPS score is not an endpoint—it’s an opportunity. By identifying the root causes of customer dissatisfaction and implementing precisely targeted improvements, banks and credit unions can win back customers who may already have one foot out the door, and strengthen connections with those who could become your biggest advocates.
From enhancing customer service to leveraging technology and refining product offerings, the journey to a higher NPS score is a comprehensive, strategic process.
Ultimately, improving NPS isn’t just about numbers—it’s about fostering deeper connections with customers. The approach outlined above will help to retain customers by confirming their loyalty while promoting a culture aligned toward the customer.
With commitment to continuous improvement, financial institutions can turn their NPS scores around, transforming detractors into loyal promoters for life.
If improving your customer loyalty is a “must-have” for your organization, reach out to our NPS experts today!
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Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld.