Net Promoter Score is a Process, Not a Metric

Net Promoter Score, or NPS, is a metric that measures how readily a customer would promote a product or service to colleagues, friends and family members. Today, with customer loyalty flagging, it’s become a critical metric to chase because of its powerful links with customer loyalty. Improving customer loyalty is a nebulous goal that could have dozens of different methodologies (many of them expensive and useless). Improving NPS, however, is a more tangible goal, which is why successful customer-facing organizations chase it so ardently.

A report published last year by the Temkin Group entitled, “Tech Vendor NPS Benchmark, 2015” found a strong link between improved Net Promoter Scores and customer loyalty. After surveying 800 IT decision-makers from large North American firms to learn about their relationships with their technology providers, the researchers found that promoters are much more likely than detractors to spend more money with tech vendors, try new products and services when they are announced, and forgive their tech vendors after a bad experience.

In order for NPS to be used as an effective metric to drive change, companies need to keep several things in mind, according to a recent article for LinkedIn (News - Alert) by Bruce Temkin of the Temkin Group. Done improperly, it can actually harm customer relationships and organizational processes. For starters, it’s important to remember is about the entire customer relationship and not individual transactions.

“Asking people if they would recommend a company isn’t a good question to use after an interaction,” wrote Temkin. “If a customer is a detractor on an NPS survey deployed right after a call into the contact center, for instance, then it doesn’t necessarily mean that there was a problem with that interaction. The contact center might have done a great job on the call, but the customer may still dislike something else about the company. If the contact center interaction had been problematic, then the customer’s NPS score might be temporarily lowered and not reflective of the customer’s longer-term view of the company.”

Many companies continue to make oversimplistic assumptions about NPS. One of them is that the activities that create net promoters must (by definition) be the opposite of what creates net detractors. This isn’t necessarily the case, according to Temkin.

“You need to separately identify changes to create promoters and decrease detractors,” he wrote. “All too often, companies just focus on detractors. This helps to fix problems, but it does not identify opportunities to propel your organization.”

It’s also important to be sure of exactly what you’re measuring and comparing. Different customer segments will have different drivers of net promoter scores, so by using the same methodology on large customers and small customers, for example, you’re probably not getting a complete picture. It’s also important to remember that NPS applies to the entire company as a whole, not a single salesperson or contact center agent. Temkin advises that organizations looking for “someone” to hold responsible for NPS results should think about making it a shared metric across a large group, not an individual KPI.

The bottom line, he advises, is that NPS success comes from the process, not the metric itself. Before you embark on an NPS campaign, or before you make any decisions based on the data you collect, ensuring you’re measuring the right things at the right time, and comparing apples to apples.

Edited by Stefania Viscusi

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