Examining the Differences between Relationship and Transactional Net Promoter Score®

In a recent newsletter2, we explained Net Promoter Score® (NPS®) and how you can use it to measure, and improve, your customers’ satisfaction with your business. This time around we’re going to examine two different kinds of NPS® — transactional and relationship — and the advantages and drawbacks to each. We do this with the goal of showing you how to best implement NPS® tracking into your company’s strategy.

Relationship vs. Transactional

Relationship NPS® (or RNPS®) asks a typical NPS® question about your overall relationship to a business. An example would be “How likely are you to recommend Company X to a friend or colleague on a scale of 0 to 10?” This gauges your customer’s feelings on the business based on all of your past experiences with it and impressions of it. These questions are asked of all customers (or a selected subset – not just the most recent ones) at a regular interval, such as quarterly or annually.

Transactional NPS® (or TNPS®), by contrast, deals with the customer’s feelings immediately after an interaction with a business. An example of a question that measures TNPS® is “Based on your recent purchase, how likely are you to recommend Company Y to a friend or colleague?” These questions are used to elicit customer feedback immediately following (or at different points during) an interaction.

Advantages

The biggest advantage of RNPS® is that it allows you to compare your business’s performance to that of others in your industry. This gives you a tangible way to see how you stack up to the competition. It also allows you to measure your customers’ satisfaction after they’ve had more time to use your product or experience your service long-term. It gives you a regular performance benchmark track over time so you can tell when to grow (increasing or consistently high scores) or cut back (dropping scores may be a sign of overextending your business).

TNPS® has several advantages. It allows you to get customers’ opinions when their interactions with you are fresh in their minds and they can provide more specific, detailed information. It also solicits their opinions at the time when they are most likely to have undergone a shift in opinion about your business (this is most likely to occur as a result of direct experience with your business). This makes TNPS® more actionable: it allows you to find out what caused a customer’s change of opinion and either reinforce it (for a positive shift) or address the reasons for it (to prevent a negative one from solidifying).

TNPS® can serve as a diagnostic for finding specific elements of your product or service that need to be improved. Moreover, it also gives you the chance to address negative customer experiences and recover those customers before they leave you, spread negative opinions to their networks, or both.

Disadvantages

RNPS® can result in lower response rates and less specific, actionable data. TNPS® runs the risk of over-surveying; if you solicit opinions from customers at every step of the way, they may become annoyed and less likely to provide feedback. TNPS® is also less useful for making comparisons to other companies, but even with RNPS® reliable data for such comparisons can be difficult to come by.

What is the Optimal Strategy?

At xAmplifier, we favor a largely TNPS®-based approach that also mixes in an RNPS® element down the road, to compare customers’ initial impressions to their opinions after a certain amount of time has passed. This gives you immediate, actionable touchpoints (via xAmplifier’s Action Item Alerts) after customer interactions while also measuring long-term customer satisfaction. A blending of the two strategies allows you to gain the benefits of both while mitigating the drawbacks that each has on its own.

If you’re interested in learning more about xAmplifier’s NPS® strategy, you can contact us at sales@xamplifier.com or 866-363-6434.

1 Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.
2 https://xamplifier.wordpress.com/2014/03/24/how-to-boost-your-business-with-net-promoter-score/

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