When the Wall Street Journal says that NPS is a dubious fad, people will surely sit up and take notice.
“The Dubious Management Fad Sweeping Corporate America”
And when the NPS founder himself comments that “it’s completely bogus” to use the system to determine bonuses as a performance indicator – surely that’s even more worrying.
To give credit where credit is due, NPS has taken Voice of Customer (VOC) to the boardroom and has become widely embraced.
But is it enough?
In short, no, and people are beginning to recognise the start of the decline of NPS. Let’s look at some of the key shortfalls of NPS and what can be done about them so that we can take NPS to the next level.
NPS is too much about the score and not enough about true improvement
As the Wall Street Journal says, the focus on NPS score alone has become almost cult-like. As they say, out of all the mentions the Journal tracked on earnings calls, no executive has ever said the score declined.
But in actuality, most companies find their score goes up and down, and the harsh reality is that nobody knows the reason why.
This poor explanation behind the score changes is one of the failings of NPS.
If you’re in a brand or service business where there’s an ongoing relationship with people you know, you should be trading in your transaction by transaction NPS method for a joined-up relationship (longitudinal) approach.
By ‘following’ individuals over time, you can explain changes in your overall NPS score because you know exactly how many people’s scores have changed, in what direction, by how much and why. That’s the only way to truly understand what’s changing and why.
With this technique also comes better accountability. When you follow up with individual customers, and check what they think afterwards and ongoing, you can understand if the things you’ve done have really worked in their eyes. And even more importantly, if what you’ve done hasn’t changed their opinion, you can try harder. That’s the truest measure of improvement.
NPS is an annoying experience; that’s why response rates are abysmal
In a CX world, why are the majority of companies continuing to deliver such a poor feedback experience? Response rates are reported of a dire 5% or less. What better indication that people hate the NPS experience? And doesn’t it make you wonder what the other 95% you haven’t heard from think?
Let’s face it – NPS is annoying. These post encounter email surveys come through in a seemingly endless stream – after your car service; your visit to the bank; after a call to customer service; after getting your hair done…the popularity of NPS is one of its biggest problems. Everyone is doing it and everyone is doing the same as everyone else!
And as experts say, the science of NPS is dubious at best. Obsessing on transactions alone trivialises relationships and can be a red herring – i.e. just because you mess up one transaction, doesn’t necessarily mean you ruin the whole relationship.
Another issue is that people get tired of giving feedback when they don’t feel listened to. Our favourite saying is ‘People hate surveys, but they love being listened to’.
For NPS to be a better experience, it’s vital then that you show people that you’re listening.
It’s common to follow up with detractors, but what about everyone else? Don’t passives and promoters want to feel listened to as well? Couldn’t they be your best advocates?
If you were a small business owner talking to a valued regular customer you’d talk to them regularly and wouldn’t you remember what they’ve said in the past?
To show people that you’re listening, you muststart joining things up so that you can remember what they’ve said in the past and ‘mirror’ it back to them in each wave of feedback. Then you can build a conversation over time so they feel listened to. Trouble is that single unconnected NPS shots gives stats but not stories and there’s little demonstrable listening going on.
NPS is easy to game for bonuses
The Wall Street Journal article states “When organisations manage to the metric, they find ways to game the system”.
They go on to say that results are easy to manipulate, for example by only asking satisfied customers for feedback, or by putting pressure on customers to give a good score because bonuses are tied to the results.
Which raises the question – should you seriously be bonusing people on NPS, as is common practice? Imagine how internal behaviours would change if you bonused these three key success factors and not the score:
- Are the full spectrum of customers asked for their feedback?
- Did they respond?
- Was the loop closed on them properly?
So how can you do better?