New Data Shows Over-reliance on Customer Satisfaction Device

An industry poll has revealed that a widely used system for determining customer satisfaction, relied upon by fleet insurers, may result in some policyholders experiencing low customer satisfaction.

The study, conducted by National Windscreens, asked key decision makers working in the insurance industry what they thought of the NPS system (a well thought of customer satisfaction measure) within their sector. Most of all, they were questioned on the effectiveness of the system.

Ultimately research showed how the NPS customer satisfaction rating is well known throughout the industry, although replies would suggest many suppliers consider it a mundane box-ticking exercise, as opposed to a truly effective measure by which decisions can be made with regard to future direction of the business.

While it is true 72% of respondents said the organisations they represent use NPS, and a further 58% claimed their employers prefer working with suppliers who also use the system, a relatively small 27% said they would advise suppliers to adopt a formal NPS monitoring system.

Pete Marsden, National Windscreens commercial director, heading up research, is worried some insurers may be stuck working with parties not interested in customer satisfaction, because of the nature of the system. He said:

“NPS has become an increasingly significant factor in tenders for third party services issued by insurers, but if there is no ongoing monitoring in place they could easily fall foul to unscrupulous suppliers that view NPS as a box-ticking exercise. This will ultimately impact policy holders and may affect retention rates when it comes to renewal time.”

This is especially true since supply contracts can extend up to three years, leaving insurers in a corner. Of the 27% who advised a formal NPS monitoring system to be in place, less than half (43%) said a process must be in place to deal with suppliers who do not measure up to the quoted figure at the outset of the supply agreement.

Only 19% of respondents rated the tool as ‘extremely effective’, while 48% labelled it ‘quite effective’. While not seen as massively harmful, it is hardly perceived to be an essential device when measuring customer satisfaction. Responses appear to indicate insurance industry insiders might be missing out when acting on NPS info, information that ultimately represents the satisfaction of their own policy makers.

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