Looking beyond the NPS

‘On a scale of 0–10, how likely would you be to recommend us to a friend or colleague?’ We’ve all seen the pop-ups as we work away in web-based applications or the requests in email messages we receive from vendors asking us to rate their software or service. It’s all part of an organization’s effort to calculate that all-important net promoter score (NPS).

NPS was developed and trademarked by Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld in 2003. Reichheld claimed in the Harvard Business Review that it was the “one number you need to grow” when he introduced the concept. NPS is a metric that measures customer satisfaction with a company, with scores ranging from -100 to 100.

The score falls into three groups. If a customer scores you as a nine or a 10, they are promoters. If they score you as a seven or an eight, they are passive. You don’t know if they are leaning toward loving you, leaving you, or they just don’t care. And, a score of a six or lower means you have a detractor. To calculate, you subtract the number of detractors from the number of promoters, and divide it by the total number of respondents times 100.

NPS is a polarizing statistic. On one hand, there’s a cult that believes it’s the chosen metric, one customer-experience number to rule them all. On the other, there’s a group that sees a vanishingly thin and arbitrary line between a ‘promoter’ and a ‘passive,’ which can cause massive scoring differences. The truth lies somewhere between. NPS is far from perfect, but used in combination with other customer-experience metrics it can add real value to your view of the customer journey and how your customers feel regarding your brand.

Satisfied customers are less likely to leave your brand, which means there should be an inverse correlation between NPS and churn rate. Customers who score as promoters should also reduce churn in a second way if they follow through on their willingness to advocate on your behalf, because customers who were referred to a brand are also less likely to leave it.

An NPS campaign is an easy way to check the box that you have done something to quantify customer satisfaction. But, it’s just another example of our move to automation at scale. We’re asking our customers to have conversations with chatbots or respond to an impersonal pop-up instead of actually interacting with them. And we can lose out on a ton of customer insight when we optimize those one-on-one discussions out of existence.

When you fall back on NPS scores, you may only get superficial information that measures your customer’s sentiments during a very brief moment in time. You can miss out on the critical, nuanced conversations that can uncover how they’re really feeling regarding a particular feature, function or experience. That’s why those NPS scores are just the starting point. Once they’re in, it’s time to go old-school and pick up a phone.

It’s mind-boggling that companies would rely on NPS as a key management metric when you consider that the score doesn’t explain why a customer would recommend the firm, doesn’t take into account consumer demographics and it measures intention, not behavior. Yet, organizations use NPS scores to drive all kinds of business initiatives — from new product launches to customer service efforts and even executive compensation packages.

NPS doesn’t tell you what you need to fix. It is only an indicator of how likely a customer is to recommend you in the moment. If they give you a bad score, it’s unclear exactly why they did, so it’s difficult to understand how you can improve the situation in the future. Likewise, if they give you a great score, it cannot often be discerned from that single metric what element or multiple elements contributed to their experience. With a single question, it’s hard to know. Asking for a little more detail can go a long way in understanding NPS ratings.

Also, having diagnostic analytics throughout your sales and product usage process can feed you information that can help you understand what might be happening. For instance, if the time to complete an e-commerce transaction suddenly doubles because of server errors, and you see your NPS scores plummet, you can very easily correlate these things.

TMP’s role

Here at TMP, we believe the voice of the customer is arguably the most important feedback that a business can receive. We value continuous learning as it leads to a profitable improvement. Customers leave feedback at the end of the call or receive an email regarding their experience and we calculate and analyze the needs of the business based on numbers.