Is NPS Dead?

What is NPS?

Net Promoter Score (NPS) is a simple survey with a 0-10 rating and an optional follow-up question. In a 2003 article at Harvard Business Review, Frederick Reichheld introduced NPS and how a few companies implemented it.

With the 0 to 10 rating, one answers the key question: "How likely are you to recommend your brand/company/ services to your friends/colleagues?". If the rating lies within the 0~8 range, the follow-up question will be along the line of "What do we need to change so you would give one more point?". And if the rating reaches 9 to 10, the follow-up question could be "What is the one thing that we do better than our competitors?".

 Why was NPS successful?

Its success became inevitable when it replaced the 20-question survey. It is so easy to gain feedback with- It only takes half a second to click on the number of rating-and so powerful that even if the follow-up question is left blank, the rating still reveals an informational insight. It is a very useful measure of how close a client is to becoming an active advocate for your company.

 

Another reason why it became so successful was that it was a straight forward analysis. The ratings go into three categories: 0~6/Detractors; 7~8/Passives; 9~10/ Promoters. For Detractors, you get -1 as the score; Passives 0, and Promoters 1. The final result is obtained by dividing the total score by the number of answers to get a final result between -100% (All detractors) and +100% (All promoters).

The original article and other studies have also established correlation between high NPS score and sales.

 

It was also because NPS was something new at the time when it was first introduced, and each time when a company introduced the NPS, there was always a positive effect-“They have given up on the long questionnaires.”; "They do care about our feedback!"; "They modernized their survey."

Novelty, however, never last forever.

 Benefits of NPS

Let's face it, it's better than doing nothing. Implementing NPS as the first step of listening to the Voice of the Customer (VOC) is useful if the company acts on what they hear. NPS brings great value if there is a feedback.

A great aspect of the NPS is that it helps a company concentrate on the top clients. Brands must focus on nurturing their promoters. It is where they can make a difference. Passive customers don't care enough to go one way or the other. Detractors cared enough to make a stand, and they reply to the open-ended follow-up question, they will give useful information about what upsets them. 

Where did it go wrong?

Brands will gain a lot of value from actively communicating based on the results of their NPS, and the actions they take in response to the customers' feedback, which unfortunately was something I have yet to see. Most companies implemented NPS as ablack hole, where feedback gets in, but never comes out. They would probably say "Thank you for your feedback," but the communication stops there.

It is actually hurting the value NPS brings. What went wrong was not because of the framework at all, but the fact that most companies pretend that they listen.

NPS Fatigue?

Once more and more companies have adopted NPS, it does not seem so special anymore, but instead, of course, becomes mechanical. It is now seen by most for what it is: simple. Many voices start saying that it is too simple and that companies cannot reduce the relationship between them and their clients down to a simple number. It seems that even "the inventor of customer satisfaction surveys is sick of them, too", according to a 2016 Bloomberg article.

Is there life after the NPS?

NPS was never intended to be the only feedback mechanism for a company. It is a useful tool, but hardly a universal cure for lousy customer experience, faulty products or awful services.

Companies cannot run on one-dimension feedback. They can use NPS for a year or two but they then need to developed richer types of interaction with their consumers. They need to build on top of NPS to get to know their consumers in a deeper way.

Author: Stephane Monsallier

Digital Innovation Experts assisting international companies improve operational and business efficiency through customized digital innovation solutions.

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