The Ultimate Customer Service KPI?

Yesterday I was asked for my opinion about which key performance indicator (KPI) was the most important. I think if you ask five different people who work in the space, you may get five different answers.

As important as overall satisfaction, value for price paid, intent to return, and a dozen other indicators of performance are, if I had to choose one, I’d choose net promoter score (NPS). NPS is a customer loyalty metric created by Fred Reicheld, Bain & Company and Satmetrix in 2003. Essentially, it identifies customers as being Promoters, Passives or Detractors of an organization, company or brand based on their likelihood to recommend it to others.

Here’s why I like NPS so much as a KPI of customer service quality:

1. Credibility: It’s based on “the ultimate question” identified by Reicheld in his book of the same title: (On a 0-10 scale) “How likely is it that you would recommend (our organization, company or brand) to a friend or colleague?” At its essence, this is a question about recommendations/referrals, which is inextricably linked to reputation, which, in turn, is inextricably linked to customer confidence in the organization’s performance/product and service quality.
2. Reliability: Whenever I conduct a NPS analysis of, say, a local competitive set for a hotel client using TripAdvisor data (adapting its 5-star rating to NPS’s 0-10 scale), I’ve never once had a client say that my results/rankings did not reflect the actual product/service quality reputations of the hotels included in my analysis.
3. Quantifies invisibility: It validates the existence of neutral customers (labeled “Passives”), who largely feel invisible to the organization and its employees. Due to the perceived indifference with which they are treated, these customers are unenthusiastic/uncommitted and easily swayed to the competition – because the company and its employees have done nothing remarkable to acknowledge them or make a lasting positive impression (in order to secure their loyalty and motivate them to becoming “Promoters”).

How about you? Is there a KPI that you feel is most important to evaluating product and service quality in your world of work?