The Net Promoter Score (NPS) method of measuring customer satisfaction is a simple approach to quickly gauge consumer sentiment. In use for nearly twenty years, NPS is used as a proxy for business resiliency, customer loyalty, and other key performance indicators.
But, its very simplicity makes it an extremely limited metric. Its sole focus on the likelihood to recommend a product, service, or experience overlooks the breath of factors that influence customer decisions. However, understanding NPS’s inherent limitations opens up a wide range of ways to solve for them.
What Is NPS
NPS, or Net Promoter Score, is a way of gauging customer satisfaction via a single question. Users see a single question prompt: “How likely would you be to recommend our product or service to a friend or colleague?”
And, respondents are given the chance to answer on a zero-to-ten scale. Those selecting anything from zero to six are called “detractors.” Respondents answering seven or eight are “passives.” Lastly, those selecting a nine or ten are “promoters.”
The final NPS score is calculated by subtracting the percentage of detractors from the percentage of promoters, yielding a score between -100 and 100. By tracking NPS scores over time, organizations aim to measure if they over- or under-perform on customer satisfaction. And, when asked over time, NPS aims to see if positive or negative shifts in sentiment are in progress.
Why NPS Is A Limiting Metric
Its simplicity makes NPS an attractive metric that many organizations gravitate towards. But, perhaps its very simplicity is also what makes it extremely limiting.
1. Lack Of Explanation. The final output from an NPS measurement is a single score. However, respondents aren’t asked about why they provided a given score. This prevents gathering the necessary intel to either keep scores high or improve low scores.
2. Limited Focus. The process of acquiring and using a product or service covers many areas. There is the product or service itself as well as the process of purchasing and receiving it, the support needed to get it up and running, and any post-purchase dynamics. Asking someone about their generic experience does not directly address any given area.
3. Biased Scoring. Sometimes, an NPS question may be about the likelihood to recommend a particular individual or service representative. Even if the service was bad, respondents my hesitate to give another person a bad score.
4. Cross-Culture Limits: Perception and satisfaction are subjective, and vary greatly by cultural group. Some cultures tend to be more positive than others, making a universal scale a potentially flawed tool.
5. False Cause & Effect: High NPS scores do not inherently lead to repurchase, referrals, or business success. As a result, strong scores may lead to false senses of security.
6. Lack of Benchmarking: In competitive environments, it is not enough to know a single organization’s NPS score. Without knowing the scores across competitors, there is no way to determine if a score is truly high or low.
How To Overcome NPS Challenges
Let’ be clear. We’re not saying don’t measure customer satisfaction. Rather, we’re saying be aware of the limitations inherent in standalone NPS scores. And, be ready to respond to those limitations. Here six ways to respond directly to the limitations noted above.
1. Follow Up With A Qualitative Question: After requesting an NPS score, don’t forget to ask, “Why?” By asking individuals why these gave a specific score, especially an especially positive or negative score, organizations get needed intel on where they need to improve or where they should continue investing resources.
2. Be More Specific: The NPS question is, by design, very generic. To overcome this limitation, consider slight augmentations to the questions. For instance, if you care about a post-purchase experience consider a question like, “How likely would you be to complement your experience with the shipping and receiving of your product?” This more focused question provides much more targeted and actionable intel.
3. Limit Calling Out Specific Individuals: For satisfaction with customer or tech support individuals, keep the person out of it. Ask respondents to rate the experience overall, and include the supplemental “Why” question. CRM solutions will let you track scores and responses back to individual reps, letting you measure individual performance while minimizing response bias.
4. Segment Results: Split NPS results by discrete segments in your customer base. This could be by country or region, by end user type, or some other distinction that’s relative to your customer group. This will remove cross-culture or cross-functional issues so that you can read what is truly going on.
5. Measure In Tandem With Other Benchmarks: NPS alone is not a sufficient metric. Consider collecting NPS data alongside other key indicators like retention and repurchase rates, average order values, or other metrics that indicate business viability.
6. Measure Competitor NPS: Be sure to look outside of your universe. Survey customers about their experience with competitor brands and products. This will let you capture competitor NPS scores and give you a complete way to benchmark your individual scores.
The Final Stage After You Make NPS Adjustments
Once you start implementing NPS metric collection, and hopefully including one of the adjustments mentioned above, you’re not done!
In fact, you’ve only just begun. Now it’s time to put your new intel into action.
You’ll need to develop a recurring process for reviewing your (adjusted) NPS metrics with key internal stakeholders, building and executing strategic plans based on those metrics, and then reviewing the impact of those plans by looking at the metrics over time. It’s a full-circle process that institutionalizes the value of capturing these targeted metrics and crafting behaviors around them.
