NPS is not the ultimate question. Despite the claims, there is no single question that you can ask customers that will make companies customer-centric.
Executives have long been convinced that Net Promoter Score (NPS) is the gold standard when it comes to measuring brand loyalty and customer experience. While simple to execute and therefore enticing for companies to implement, the score contains significant sample and question bias, and lacks context on customer experience, limiting businesses’ ability to uncover the true drivers of NPS.
Here are some quick answers to key questions:
Is NPS the best indicator of customer loyalty and business performance? In many cases, No.
Can other metrics be used to drive positive change? Yes.
Does NPS provide an easy to understand metric that can be widely adopted? Yes.
Can NPS be used to make an organisation more customer centric? In many cases, yes.
Will a company improve if it increases promoters and decreases detractors? In many cases, Yes.
Can NPS be used inappropriately? Yes.
Can any metric be used inappropriately? Yes.
Would I ever recommend NPS for every touch point? No.
Should companies consider their specific business when selecting metrics? Absolutely.
What’s more important, the metric or the improvement process? The improvement process.
Relying solely on NPS is detrimental. NPS prevents businesses from getting to the root cause of customer churn and impedes their ability to devise practical solutions. Even if you’re reading open ended survey responses, you are more likely to get shallow, incidental feedback about products, services or systematic issues affecting loyalty. This is because survey responses are brief, and do not elicit the breadth of information contained in actual customer conversations.
Many companies still work exclusively with a combination of NPS and web analytics data to measure the customer experience. NPS was originally a brand loyalty metric, an indicator to measure engagement; how likely it is your audience will recommend your brand to family and friends.
Small nuances can be made to make an NPS question more specific, for example: How likely would you recommend Company or Service X based on your experience today/ Based on your purchase etc. But, it is still a very standard and general metric. With a single KPI (such as NPS), it’s hard to keep track of the overall experience. We see that companies still shoot in the dark, making uninformed product and service decisions because they’re capturing feedback without any context.
Capturing multiple metrics allows you to be more specific with your NPS questions. Without the basics, your NPS doesn’t pinpoint issues or allow you to take action. You’re left wondering if any of your Promoters will even actually recommend your product to anyone they know. If measured and managed, the 3 steps of the CX Pyramid (see image below) will support an increase of the overall customer loyalty.
To actually achieve what NPS promises, businesses need to invest in diverse strategies and technologies that elevate the voice of the customer (VoC) and illuminate vital pieces of feedback to boost loyalty and improve experience.
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