The Recent NPS Debate – What You Should Really Know
Many clients have asked me about my thoughts on the recent blog post by Jared Spool who says Net Promoter Score (NPS*) is a harmful metric. I then usually mention that he is making good points but that there is another post by Aga Szóstek who says the believe in a silver bullet is the truly harmful thing. I recommend you don’t read one without the other. And if you are a Forrester client, give our report Top 10 NPS Questions Answered For CX Professionals read for a balanced assessment of NPS.
My take: I have done lots of research on CX measurement and NPS. NPS can work but it has flaws that can make it a questionable fit for a company. But the real problem lies in how companies use it and in the (too) high hopes people had put into NPS.
Here are three of my “favorite” flaws (if there is such a thing) in addition to the challenges mentioned in the two articles.
- NPS is being used as a direct measure of CX quality when it isn’t one. And it doesn’t capture customers’ emotions adequately which we know is really important for loyalty.
- The question doesn’t make sense for customers in some industries – financial services, for example – where customers might like an experience and give a low NPS score, while saying in the comment that they just don’t talk about finances with friends.
- The NPS calculation is based on studies that showed that people who score a 9 or 10 behave differently than customers who score a 7 or 8 and again differently from customers who score a 0-6. That might or might not be true for your customers. If it is not true, the NPS calculation doesn’t provide a leading indicator for financial success.
The real issue is the hype around NPS which led to two problems
- Widespread use and adoption of NPS in lots of firms without being able to answer three key questions with “yes”: Does the question used for NPS make sense to YOUR customers? Does NPS energize YOUR employees to act? Is NPS linked to corporate goals like growth in YOUR firm?
- Starting to compensate people based on NPS in brute-force ways and thereby destroying a company’s (CX) culture.
Aren’t the strong emotions around NPS merely a sign that people who believed in NPS as the holy grail of CX measurement (fanned on by the marketing machinery around NPS) became deeply disappointed when they realized NPS is just a metric with pros and cons?
So, our take away for the future must be that there is not one number or one best metric. And if the next person comes to you saying they have it, save yourself some disappointment by being realistic from the start.
*Net Promoter and NPS are registered service marks, and Net Promoter Score is a service mark, of Bain & Company, Satmetrix Systems, and Fred Reichheld.