NPS: The Danger of its Singularity

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After Fred Reichheld published The One Number You Need to Grow in the Harvard Business Review, many customer experience professionals thought they had to ask only a single question: “How likely is it that you would recommend company [x] to your friends and colleagues?”

Gone were the “overall” questions that had dominated customer surveys, as in “Overall, how satisfied are you with…” or “Overall, how would you rate the value of …” and the inevitable follow-up “Why?”

Soon this one question would become the de facto way to measure customer sentiment. Everyone seemed drawn to the simplicity of Net Promoter Score (NPS). And, it became a forcing function for many organizations. Finally, everyone was talking about wanting to improve the customer “metric”.

While we all want the simplicity of a single metric, whether it’s for business growth, weight loss or a happy marriage, we know it’s rarely that easy.

Believing that NPS is sufficient can be dangerous as it:

  1. overlooks the complexity of company-customer relationships
  2. is a description, not a cause and
  3. measures an outcome, not the actions required to achieve it.

Customer relationships are complex

Most experienced executives appreciate the complexity of the customer-supplier relationship. They:

  • Think about the hundreds of touch points customers have when they do business with a company.
  • Factor in the variety of products they can choose from and the various people with whom they interact
  • Lead complex marketing programs, campaigns and pricing strategies designed specifically for certain customer segments.

So why do many think a single metric, NPS, can sum it all up? Wishful thinking, I’d say.

Imagine this

A broker presents you with an investment opportunity, based on only one number, the company’s sales. Do you invest? No.

Or your doctor wants to assess your health. Can she do that with only one number? BMI, cholesterol, blood pressure or blood sugar? Humans are too complex to be assessed with one number.

So is the relationship between company and customer. While NPS is an important indicator, it’s not the only important number.

NPS is not a cause

Although Reichheld claimed that “willingness to recommend” was, by far, the best predictor of business growth, he never made a causal connection. Companies with high NPS scores had high performance, he observed. To many people, this implied causality.

But, that would be like watching videos of musicians with lots of tattoos and insisting their success was caused by the tattoos. You wouldn’t make that leap. You’d know that the tattoos were a common feature of the musicians, but not the cause of their talent or popularity. Similarly, high NPS scores are a common feature of growing companies, but not the cause of their success.

An outcome is not an action

NPS is a significant outcome of a good company-customer relationship. But NPS does not tell you what you need to change or do to encourage customers to recommend your company.

Experiences cannot be measured by a single number, any more than your BMI can give the full picture of your health. Descriptions and outcomes don’t tell you what you need to do to influence customer attitudes and behaviours.

What does? While there’s no simple “metric”, there are answers, too long for one post.
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See the follow up to this post: An Obsession with Success Metrics Won’t Create More Success – Find Out What Will

Paula Courtney
Chief Executive Officer, The Verde Group

Learn more about Paula Courtney

Chief Executive Officer of The Verde Group.
Paula Courtney