NPS is a modern phenomenon. It has transformed the world of customer satisfaction measurement and for good reason it is widely adopted. Nonetheless NPS has its frustrations and people are asking about where to from here. We explore the pros and cons and suggest where the next level is:
Pro – everybody knows about NPS — it’s well established and it’s on the radar of the C-level. To have the customer voice so recognised is one of the great achievements of NPS.
Con – there’s more to the world than willingness to recommend — there’s no denying the power of word of mouth as a driver of growth in many businesses, but users are too rigid in their use of the willingness to recommend question. There’s overwhelming evidence that it’s not the universal factor that people think it is. Customer Effort is now a good competing metric that can be used equally effectively. There’s a growing following of companies who believe they can win by competing on how easy it is for customers to do business with them. So, this raises an even bigger question – why not give up willingness to recommend and measure what is strategically important to your company – is it your experience? Is it your responsiveness? Is it your reliability? Sure, you have to give away some benchmarking, but while benchmarks are interesting, are they really that useful?
Pro – very few questions is good — NPS pioneered the idea that very few questions are required. You don’t see nearly so many batteries of questions these days. Giving feedback is a lot better experience than what it used to be- unless you’ve been tempted to stray and add some other rating questions to annoy your customers
Con – everyone’s doing annoying post-encounter questioning pulsing — it’s hard to interact with any company today without getting asked to say how it went and that’s getting positively annoying – whether you’ve had your car serviced or phoned your telco. The intention is good, but the reality is that it is mostly about the metrics companies want, rather than managing feedback positively. Also, there’s a big assumption underlying encounter measurement – that improving encounters improves business. We know for sure that poor encounters often don’t have a big impact on ongoing relationships. Next level NPS needs to focus more on the critical incidents and all companies should be following relationships as well as encounters – be they brand relationships, or business relationships.
Pro – KPI-ing NPS gets employees interested — this is a double edged sword, but there’s no doubt people get interested in customer feedback if their pay is linked to it. Trouble is that it can encourage unexpected behaviours that defeat the purpose of the programme in the first place – to do a better job for customers. Examples of gaming the system include dropping out dissatisfied clients or putting pressure on customers to give good scores.
Con – it’s hard to know what’s changing and why – it’s a common complaint from companies using NPS that their net promoter score goes up and down for no apparent reason. The single shot pulsing approach of NPS does truly get it the way of providing proper explanation. That’s not going to change, unless you go to the next step, which is to complement your NPS programme by following relationships over time. Then you can see how scores change from one time to another and see the reasons the customer gives.
We’ve summarised our thoughts on the NPS approach in these two slides – including our recommendations on a better way; following relationships over time to really understand those relationships, gain clarity and take action.