Do you have a good Net Promoter Score (NPS)? Great, but that’s not enough. Dig deeper if you want great end-to-end customer experience (CX). Dig deeper if you’re going to retain those “promoters” and convert those “detractors” into satisfied customers. Just because you have an excellent NPS score doesn’t mean you’ve won at CX, and that’s one of the mistakes many companies make when they create an over-reliance on positive NPS scores. NPS success is not a direct indication of CX success.
Since it’s lightening struck the Customer Experience (CX) profession, the NPS has been a popular CX assessment method. Still, the magic of NPS is just one small component to understanding the full Customer Experience. This post makes a case for what we call the over-reliance on NPS as an indicator of customer experience (CX) satisfaction.
Let’s start with the basics. NPS does some things well, and when taken in context it can serve as a launching pad for measuring customer experience across the full customer journey, across all touch points.
NPS gives companies a snapshot of where their customers fall across the loyalty spectrum. When asked the question:
“How likely is it that you would recommend our company/service/product to your friend or a colleague?”
NPS performs a Magic Sorting Hat calculation, but instead of sorting customers into Hogwarts Houses such as Gryffindor or Slytherin, it determines what percentage of respondents (not all customers) have a willingness to recommend a company/service/product to a friend and sorts them into three broad loyalty categories:
Detractors = lowest promoter score (0-6)
Passives = customers that score in the middle (7-8)
Promoters = highest promoter score (9-10)
Sorting is just the first stage of NPS math. The final score is calculated by subtracting the percentage of detractors from the percentage of promoters, while passives count toward the total number of respondents and decrease the percentage of detractors and promoters while pushing the score toward zero.
Interpreting and Applying the NPS
Since NPS received its coronation as a valuable business metric, in the 2003 Harvard Business Review article, “The One Number You Need to Grow,” it has been widely embraced by business leaders across the brand spectrum. And it’s not a bad tool. We are not throwing shade at its value as a business metric, at the same time, as a CX company, it’s our duty to warn customer experience managers against an over-reliance on NPS as a useful indicator of how well they provide a quality customer experience. NPS has been shown to be an accurate predictor of customer behavior but not an accurate predictor of how well a company scores on CX metrics.
In Terms of CX, NPS Can’t Stand Alone
Its simplicity and its ease, in both application and interpretation, can be its downfall. People like to refer to NPS as a “simple, yet effective” measure of how a business is doing, but the value of this metric is only as good as the context in which it is understood, for a few very good reasons:
- Net Promoter Score (NPS) is too simplistic a measure: NPS is a metric that must be interpreted as part of a broader CXM toolkit, not allowed to stand alone. NPS tells a company how some percentage of its customers (those that responded to the survey) feel about the brand (using one measure— loyalty) at either a single point in the customer journey (how did we do on this transaction) or as an overarching feeling about the brand (how do you like our brand/product/service). That’s just too limited to mean much on its own. It is a valid, directional metric so use it with that in mind, but don’t let it be a substitute for better, more comprehensive research that will help you improve the CX and the UX.
- Net Promoter Score (NPS) ignores (or at least downplays) the importance of detractors: Okay, NPS doesn’t ignore It reports detractors as a percentage of the population as well as promoters, but it’s easy to get caught up in the buzz of a positive NPS score and forget to take a deep dive into those customers who think you aren’t getting the job done as a company, service or brand. Detractors are scores that range from zero to six. That’s a lot of unhappy customers, even if the composite score is still majority promoters.
- Net Promoter Score (NPS) doesn’t ask why: This ties into the issue of detractors, but is its own challenge. Also, this shortcoming falls on both sides of the NPS equation. Knowing what you did wrong just as important as knowing what you did right. And asking why is the most important way to fix what’s wrong and learn from what’s working.
Proponents of NPS outweigh detractors, but when NPS is considered in the context of CX tools, it’s not high fives all around. Lumoa conducted a small, but interesting meta-analysis of NPS—using NPS as the survey tool: “We asked 30 CX influencers if they would recommend the Net Promoter System” and results were mixed.
While many business leaders across many disciplines and industries place a high value on NPS as a critical business metric, it should be embraced by CX managers as just one tool in a broad toolkit of metrics that measure performance over opinion.