Greg works in Customer Experience and Digital Transformation; he’s host of the Agile World Podcast and author of The Center of Experience.
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It can be challenging to meaningfully measure customer experience (CX) in any organization. Several metrics have been touted as good ways to see the effects of CX and its impact on customer satisfaction, loyalty and recommendations.
One of these metrics is Net Promoter Score, often referred to as NPS. While it has been touted by some as a singular metric to determine if your customer experience initiatives are successful, it has some significant shortcomings if it is the only measurement used, as some experts are casting doubt on using this statistic without caveats. In this article, I’ll explore why NPS should not be the only method of measurement for CX.
What is NPS?
NPS was developed and trademarked by Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld in 2003. The score is based on the question: “What is the likelihood that you would recommend Company X to a friend or colleague?” rated on a 0-10 scale.
Respondents are broken into three groups:
• Promoters, or those who answered 9 or 10.
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• Passives, or those who answered 7 or 8.
• Detractors, or those who answered 0 through 6.
To calculate, you subtract the number of detractors from the number of promoters, and divide it by the total number of respondents times 100. It’s as simple as that, and therein lie some of the issues with using Net Promoter Score as your major method of measuring customer experience.
Challenges with Using NPS
The biggest issue with using NPS as your primary or singular customer experience measurement is that it doesn’t take a lot of other factors into account. Let’s explore some of these below.
NPS is not a good predictor of growth or future behavior.
The question posed in the NPS is to say whether you would be willing to recommend a product or service to a friend or colleague. It doesn’t ask if you would be interested in buying the same or similar product yourself, or even if you are happy with your purchase. A lot is assumed within that question.
Also, many times people say one thing and do another, sometimes skewed by if they feel their behavior is being too closely observed, and sometimes they are simply happy that they completed their purchase and haven’t actually even had time to use the product or service yet.
NPS only shows a single dimension of loyalty.
Companies that rely heavily on NPS as their metric of success are also only seeing one dimension. While the likelihood to recommend is a good thing to know, there are other ways you should look at your customer experience as well.
For instance, Business Over Broadway identified three different types of loyalty: retention loyalty, advocacy loyalty (which NPS fits into) and purchasing loyalty. NPS really only takes the second type into account. Solely using NPS means you’re missing out on understanding the other two types.
NPS tends to skew to the extremes.
If you’re like me, you’ve most likely run into the phenomenon of people falling into extremes when it comes to giving feedback to companies — either they are vocal advocates or complain about the service. Rarely do you have someone reply to say that they are only moderately happy.
For instance, in the heat of the moment, someone is usually very happy or very dissatisfied with their experience. Often someone who feels at a “5” is not going to bother providing feedback at all. Therefore, you are more likely to get feedback from those at the extremes than in the middle of the spectrum.
Additionally, a so-called “detractor,” or someone who rates 0-6 on the NPS scale, is not necessarily someone who is actively bad-mouthing your company or product. They may even be willing to give you another chance but had a single bad experience. Without contextual information and surrounding data, it’s difficult to rely on that single number.
NPS doesn’t tell you what you need to fix.
Finally, the NPS 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 can not often be discerned from that single metric what element or multiple elements contributed to their positive experience. With a single question, it’s hard to know.
In my experience, 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 that are more objective can also feed you information that can help you understand what might be happening. First 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. While there may not always be such an obvious connection, using diagnostic metrics can help you fill in gaps more easily.
Don’t get me wrong. NPS is not all bad, but it isn’t an end-all be-all to solve your customer experience challenges. You can use NPS as one element in your array of customer experience measurements as long as you take the other factors discussed above into account.
In my professional experience advising companies in their customer experience approach, I have always tried to use NPS (or Employee Net Promoter Score for employee experience initiatives) as part of a larger set of measurements in order to provide the most meaningful and well-rounded approach to measuring CX.
Taking a more holistic approach can help you understand not only exactly what is going on today, but help you plan ahead for the future and build a full-featured CX solution that keeps current customers satisfied, engaged and telling others about your company.
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Author: Greg Kihlstrom, Forbes Councils Member
