Net Promoter Scores and Customer Success—Is There a Better Way?
The Net Promoter Score (NPS) has become a standard way for businesses to measure customer engagement with their brand, products, and services. There’s just one problem—the Net Promoter Score is far from perfect. We’ll provide a brief overview of NPS, explain where it’s lacking, and suggest some alternative methods for measuring, analyzing, and understanding the customer experience.
A Brief Overview of the Net Promoter Score
The Net Promoter Score is a way to measure a customer’s experience when they interact with a business and what they offer. NPS analyzes loyalty to an organization and is based on one question:
“How likely is it that you would recommend (Organization/Product/Service) to a friend or colleague?”
Customers who answer the survey give a rating between 0 (not at all likely) to 10 (extremely likely). These responses are categorized and benchmarked, then used to provide an overall NPS, calculated between a total score of -100 to +100.
Net Promoter Score Benchmarks
NPS analysis categorizes people who respond to the question by the score that they give, as follows:
- Detractors are respondents who give a score between 0 and 6. This typically represents unhappy customers who did not have a positive experience and are unlikely to buy from you again or recommend you in the future.
- Passives are respondents who give a score of 7 or 8. They generally had a good customer experience, but are not positive advocates of your business.
- Promoters are respondents who give a score of 9 or 10. These are the most loyal customers and are key to good word-of-mouth and advocacy.
NPS measurement involves calculating the percentage of people who fall into each category. You then subtract the percentage of detractors from the percentage of promoters (passives are ignored), to come up with a final score.
For example, if you survey 100 people and 35 give a score of 0-6, 20 give a score of 7-8, and 45 give a score of 9-10, your final NPS would be +10 (45 percent promoters less 35 percent detractors equals 10 overall).
In terms of a benchmark for an overall NPS, its difficult to give concrete figures on what a “good” NPS is—it depends on many different factors including, the sector, industry, and niche you operate in, and the scores of your competitors. Generally speaking though:
- An NPS of 0 or less means a business has significant customer experience issues to overcome.
- An NPS of 1 to 30 means a business generally had a good, positive customer experience, but there’s more work to be done.
- An NPS of 31 to 70 is the mark of a successful business that has plenty of happy customers.
- An NPS of 71 or more means that customers love you and you’re getting plenty of great word-of-mouth.
Criticisms and Issues with the Net Promoter Score
Although an NPS can give a helpful, high-level overview of the overall customer experience with a business, it does have several issues.
The Net Promoter Score Does Not Provide Deep Insight
NPS only provides a high-level overview of the customer experience. Although one question will improve responder rates, it provides very little insight into the drivers behind the score. NPS by itself is not useful for understanding the customer experience or how to improve it.
The Net Promoter Score Does Not Categorize Respondents
Demographics can strongly influence how a person rates their customer experience. For example, millennials may prefer online-only services, while baby boomers prefer face-to-face interactions. Because NPS is not linked back to age and other demographic factors, it cannot drill down into how customer characteristics influence the customer experience.
The Net Promoter Score Only Asks What Someone is Likely to Do
One of the biggest flaws with NPS is that it only measures what someone says they will do—their intent. It does not measure or track how they actually behave—whether they have recommended your business.
The Net Promoter Score Only Surveys Existing Customers
NPS cannot tell you anything about the attitudes of your employees, stakeholders, or most importantly, potential customers. Employees and stakeholders both play a crucial role in a customer’s experience, and only surveying existing customers leaves out a lot of insight into how your marketing performed before someone even got to purchase.
The Net Promoter Score Does Not Address Changing Customer Demands
Customer expectations change rapidly. With so many businesses offering robust online interactions, better experiences, and faster delivery, customers come to expect much more. Because NPS looks backward at previous experiences, it’s often slow to react to current trends—meaning that you’ll always be playing catch up.
Only Very Happy or Very Upset Customers Take the Time to Respond
Most people are very busy in their day-to-day lives and work, and responding to customer surveys, even a single question, is typically not a high priority. As a result it tends to be only the happiest or least happiest people who take the additional few seconds to respond to the question.
Alternative Solutions for Better Customer Experience Insights
NPS may be a reasonable starting point, but if you really want to understand customers, create advocacy, and boost revenue, you’ll need to do more.
Ask Customers Deeper Questions
True customer insight comes from two areas—mining customer data and asking questions. When it comes to asking questions, use survey software, CRM interview techniques, and other approaches to get insight into what your customers think. Ask direct questions and track results, then carry out an analysis to see what they really think and how that changes over time.
Use Sales Forecasting Methodology
One of the most powerful ways to understand how customers are actually reacting to your business is to look at the hard data—how much they’re actually spending. This involves digging into your sales pipeline and seeing how your customer deals are progressing. Link each part of your pipeline to a good reporting tool and integrate it with your CRM and customer retention software to get insight into how customer experiences translate into revenue.
Take Advantage of Customer Retention Software
Customer retention software helps you to drill down into what your customers really think, and use those metrics to incentivize them to buy, stay, and recommend. You can link retention software with certain behaviors with your sales reps, on your website, or via other means. You can offer dynamic pricing and other incentives to drive up advocacy and create a better end-to-end experience.
Gain Insight from Your Customer Relationship Management Tools
CRM is critical to any business, and allows you to track customer interactions and experiences at every stage. Use this customer interaction data to measure and track over time the intensity and sentiment of engagement between the customer and your organization. A high or increasing level of engagement is typically a positive sign the customer is using and benefiting from your solution, while a low or decreasing level of engagement is a warning sign that you need to take action to turn things around to retain the customer over the long-term.
Remember, NPS is just a starting point, and although it might be a useful, high-level benchmark, you need much more context to enhance the customer experience. Once you understand the shortfalls of NPS, you can close those gaps using other software, tools, and questions to get the answers and data you need to truly build customer advocacy.