The net promoter score has a valuable role to play in customer experience strategies, provided leaders differentiate between its strengths and limitations.
NPS measures customer loyalty, not quality of experiences, and better NPS won’t necessarily lead to better business results. Business leaders sometimes overemphasize the importance of the NPS score, which can lead to underwhelming results.
“NPS is a question with a calculation that ends up as a score, and maybe you have categories to go with it, but that's it,” said Maxie Schmidt, principal analyst in Forrester's customer experience practice. “It's not your whole survey. It's not your whole program. It's just a metric.”
NPS can still serve as a guiding star for leaders who understand where it fits in an overall CX strategy. Teams that overcome existing NPS biases and learn how to communicate the real benefits across the enterprise can use it as a metric the organization can rally around.
NPS is an indicator, not a goal
NPS has been around for two decades, is easy to calculate and has buy-in across companies in many industries. However, such wide recognition can become an obstacle for leaders looking to revise how they examine and use the measurement.
In some cases, NPS is treated as its own goal — something businesses can tout to investors as a sure sign that CX efforts are going right.
Experts note that the metric is much more valuable as an indicator rather than an outcome, but it’s the star of the CX show in many companies. The effort to bring every business leader on board with a more narrowed vision for NPS may take time.
“Change is hard,” Isabelle Zdatny, principal catalyst at the Qualtrics XM Institute, told CX Dive. “People don’t like changing their behaviors.”
There is no universal solution for bringing the entire business team on board, but it can help to start by positioning NPS as part of a larger whole.
“You're just throwing a dart at a dartboard and taking a guess at what you need to do if you are not capturing, through different means, the root cause of why you’re failing or succeeding in NPS in that customer journey,” Deborah Alvord, VP analyst with Gartner's global customer service and support research group, told CX Dive.
Leaders can take NPS and use it alongside measurements like brand awareness and customer effort scores, according to Emily Taylor, director of operations at Drive Research. They can also use NPS surveys as a jumping off point to get feedback on new initiatives and other important business decisions.
“The great thing about market research is that there's always an opportunity to learn more,” Taylor said. “Sometimes when you get a finding you're like, ‘Oh, wow, I've got more questions about this.’”
Turning NPS from a goal into an indicator may also require companies to rethink operations.
For instance, companies should avoid tying rewards like pay bonuses to certain NPS thresholds, according to Schmidt. These bonuses incentivize CX teams to focus on one aspect of their jobs, rather than improving experience as a whole.
“If you pay for NPS performance, it's a little bit like when you pay a pilot to land the plane,” Schmidt said. “Doing things that create customer loyalty is part of the day job of every employee because only if your customers are loyal, will you have a day job tomorrow.”
Tie NPS to wider business goals for better communication
Leaders aiming to right-size the importance of NPS have the opportunity to win buy-in from non-CX stakeholders in the business by tying the metric to the right business outcomes.
Other departments may not care about NPS by itself, but those leaders are more likely to come on board with customer experience goals if a line can be drawn between NPS and relevant business outcome, according to Zdatny.
“If you go to other business leaders and you tell them they need to change because of NPS, it's easy for them to poke holes and say, ‘Why do I care about NPS? Why do I care about better experiences?’” Zdatny said. “As CX professionals, the onus is on us to translate any of those metrics, but NPS is the top one.”
For example, a business might demonstrate how its customer experience strategy and the associated NPS improvements are tied to reduced customer acquisition costs.
Turning NPS, or any other CX metric, into actionable insight starts with identifying tangible objectives that matter to the business, according to Alvord. From there, leaders need to ensure the data being collected provides insight into that goal.
Better NPS won’t relate to every aspect of the business, but it can be a starting point to ask deeper questions. An understanding of why customers actually rated the company positively or negatively can connect the dots between CX initiatives and their impact on business goals better than any one number.
“You need to ask some sort of a follow up to identify the root cause of the feeling behind why they gave you that score,” Alvord said.
A metric like NPS can serve as a North Star that leaders can rally and align around, according to Zdatny. NPS can help drive coordination across the company by producing easy-to-pinpoint improvements tied to metrics that matter across the business.
