What are the Differences Between Relationship and Transactional NPS?
There are many important factors to consider regarding customer satisfaction and experience, such as: earning customer loyalty, increasing their lifetime value, turning customers into promoters, making yourself stand out from the competition, etc. With all this in mind, it’s likely you’ve already implemented customer satisfaction indicators such as the Net Promoter Score. This article will examine the differences between a relational and transactional Net Promoter Score, or NPS. Find out which option will work best for you and then read our tips on implementation.
RELATIONSHIP NPS TO GAUGE CUSTOMER LOYALTY
Relationship NPS is used to measure your customers’ overall impressions after having experienced various types of interactions via different points of contact within your business.
What am I looking for if I want to measure the relationship NPS?
- You want to boost customer loyalty: Evaluate how they engage with you to see how likely they are to recommend you to other potential customers as well as what their image of you is.
- Undertake structural changes: Before undergoing an extreme makeover, such as an image or target market change, or launching an entirely new concept, etc., a relationship NPS will enable you to set up a long-term strategic action plan in line with your priorities.
- Reactivate non-purchasing customers and maintain your active customers: Do a relationship NPS survey to understand why non-purchasers haven’t returned. Target customers who don’t buy as much or buy less as well as customers who haven’t renewed their loyalty card.
- Set an industry benchmark: Compare your relationship NPS to that of your direct competitors.
Limits of a relationship NPS
- A relationship NPS campaign is directed at a company’s head offices. It isn’t very engaging for point of contact teams that aren’t fully-involved in the campaign.
- The NPS varies drastically depending on many factors. As such, it is difficult to compare your score with that of your competitors. Comparing between different business areas is impossible as the score changes depending on the sector. What's more, an NPS within the same sector can vary depending on the country, the method of administering the survey and where the NPS question features within the survey form.
How and when should you ask the following Relationship NPS question?
“Would you recommend [Critizr] to your family and friends?”
The answer to this question is given on a scale of 0 to 10. It’s a good idea to include an open question along with the NPS question so that the customer can fully express themselves and so you can understand why they gave you that score.
For a more accurate representation, the relationship NPS should be measured continuously. You can distribute the survey using various methods depending on your customers and their preferences, by phone or email for example. FYI: phone surveys receive the highest scores.
DOWNLOAD THE E-BOOK : Discover the NPS : definition, calculation and collection
A TRANSACTIONAL NPS TO MEASURE IMMEDIATE CUSTOMER SATISFACTION
Unlike a relationship NPS that evaluates the overall relationship between you and your customers, a transactional NPS measures customer satisfaction at a precise point of contact.
Take a retail outlet for example: a transactional NPS will come into play following each interaction and at each point of contact: after an in-store purchase, after an online order, after the delivery of an online order, after contact with customer services and after a return visit to the store.
What are my objectives if I wish to measure transactional NPS?
- Improve your customers’ satisfaction and make them over the moon: In contrast with a relationship NPS, which measures customer loyalty, a transactional NPS measures customer satisfaction.
- Establish a customer engagement approach: Managerial efforts regarding customer satisfaction affect everyone across the board. Let’s continue with the retail outlet example. All the store managers have an NPS, which orients their action plan and how they manage their teams. They could also compare themselves to other stores, debate best practices and progress. Regional managers can get their stores involved and network managers have a clear vision of their network.
- Improve the multi-channel customer experience: The transactional NPS is key for improving the entire customer experience. Take an online order for example: customers may be happy with the layout of the site, the products and the delivery time advertised, and as such the NPS will be higher. If the delivery is late or if there’s a problem with the products delivered, scores tend to plummet. When a customer returns to a store or interacts with customer services, advice offered by the contact staff member is a very important factor in the NPS.
- Turning neutral customers into promoters: Data collected can be used to immediately resolve the situation of a dissatisfied customer and to charm a neutral customer into becoming a promoter.
- Measuring the ROI of the customer experience: The transactional NPS enables you to improve the customer experience. Comparing NPS progression with total revenue means you can measure the ROI of the customer experience.
Inconveniences of the transactional NPS :
- This approach means engaging all teams and getting them to take part. Don’t be afraid to use customer feedback as a management tool to boost motivation and awareness of customer satisfaction among co-workers.
- It’s important to have over 30 respondents per month per point of contact so that the analysis remains worthwhile.
How and when should you ask the following transactional NPS question?
“Following your customer service experiences, would you recommend [Critizr] to your friends and family?”
This answer is also given on a scale of 0 to 10. Fill out the bulk of your survey with closed questions and finish off with an open-ended one (5 questions max).
A transactional NPS is measured as part of an instant TouchPoint survey. You decide when to send it depending on your objectives (a day after the interaction, for example). You can distribute the survey via email, text, a widget on your website, in the retail outlet, etc.
To achieve the best representation possible, we recommend continuously measuring the transactional NPS in an aim to react proactively.
DO I NEED TO MEASURE BOTH TYPES OF NPS?
Absolutely! The scores complement each other in making your customer-centric approach a success. Prioritise the NPS type that will enable you to meet your specific objectives. If you have never measured your NPS, it’s wise to start with the relationship NPS to pinpoint the areas for improvement. The transactional NPS will then serve to highlight ways to improve them.
The relationship NPS is not an aggregate score of the transactional NPS because different variables are being used. The relationship score is often higher as it is based on how customers grade their relationship with your business.
International Customer Success Manager @ Critizr