Net Promoter Score is one of the most trusted and popular metrics used by brands to measure the health of their customer relationships. Businesses who experience high levels of brand advocacy have been shown to outgrow their competition by 2.5 times.
A single NPS score has the advantage of letting businesses quickly gauge their overall health and ascertain the need if any to make changes.
However, just an NPS score is not enough to determine the type of changes required. It can identify and locate the problem. The limitation lies in its inadequacy in answering the ‘Why of Things’. One needs more than a simple measure of ‘likelihood to recommend’ to identify organisational problems in detail and to chart a course of action for internal stakeholders.
Today, several industries have successfully embedded and aligned themselves with a transactional NPS measurement programme across various stages of the customer journey. Notwithstanding, business leaders who track NPS regularly still face some persistent challenges. These include:
1. Ambiguity of the Passives
Passives are more difficult to comprehend than Detractors as a result of their neutrality. Generally speaking, Passives are reasonably satisfied with your product or service and usually do not have any burning issues, yet are unlikely to enthusiastically recommend your company. A lack of a concrete problem to target and fix makes converting Passives into Promoters a challenge.
2. NPS ratings not aligned with customer VOC
There are times when contradictory themes may emerge from the NPS ratings and customer verbatims. It is possible to see positive VOC from detractors, basis the rating, and vice versa. Such contradictions create confusion among internal stakeholders who are responsible for driving actions.
3. Varied interpretation of scale due to the lack of a fully defined scale
Often, the interpretation of the NPS scale across target groups is inconsistent. The subjective interpretation of the scale by the respondents causes this inconsistency, as only the endpoints are defined. For example, a rating of 6 may be a negative rating for one customer, and a better than average rating for someone else.
4. Future intent not aligned with actual behaviour
NPS as a metric indicates future intention of purchase and ideally should align with actual behaviour as well. However, there are times when the future intent of recommending the brand doesn’t match up with the actual behaviour of recommendation. E.g. A detractor today may end up recommending the brand a month later while the promoter may not recommend the brand at all.
5. Variation in NPS scores
Variation on scores can be a common problem if the sample size is not adequate. In an industry where passives proportions are high, this can be a bigger concern. For instance, if the sample size is 150, out of which 50 percent are passives, then the effective base considered for the NPS score is 75 as passives are not considered in arriving at the NPS score.
6. Business numbers are not always aligned with NPS trends
There are other key metrics along with NPS which impact business numbers. Thus NPS trends in isolation may not always be aligned with business numbers. If they are not aligned, then we need to look at the interplay of other factors.
Nevertheless, some companies are handling these challenges well and are successfully managing to drive NPS scores internally. Some of the best practices followed by these companies across various industries are listed below.
- Communicate to the Passives that you take their feedback seriously. You can highlight this on your website, company newsletter, and social media outlets. (Case studies showing how Detractors were converted to Promoters when their feedback led to improvement and change are ideal for this.) This approach offers dual benefits. It shows Passives that your company truly has the customer in mind – something most people would consider worth recommending. Additionally, it encourages Passives to respond with detailed feedback as they can see it really can make a difference. Craft a customised follow-up question specifically for Passives in your industry/space. Imagine you are the Passive and are being asked the follow-up question. What would catch your attention and get you to respond in detail about your experience?
- Close the loop with detractors – Implement the process of ‘close the loop’ for all unhappy customers on a real-time basis. Information sharing is the vital final part of the feedback process, allowing the teams to implement any changes necessary to improve overall corporate performance.
- Link internal data with survey data to monitor the actual transaction patterns of promoters, passives, and detractors individually. Targeted communication can be done during the key milestones.
- Capture future and actual behaviour – Besides the future intention of recommending the brand, capturing the actual behaviour of customers also helps. Whether or not the customers have positively or negatively recommended the brand to someone, helps to further segment the promoters and detractors. This helps to understand who the real promoters and detractors are for the brand.
- Improve database contactability to have a better reach to customers. Conduct special customer drives to capture alternate numbers from customers.
- Review customer history in totality across formal and informal communication platforms like social media platforms, WhatsApp, email, website, call center, survey data etc. This will help in having a more integrated strategy for handling the promoters, passives, and detractors better.
In a nutshell, this is how a Net Promoter Score (NPS) works. And some of today’s most successful businesses are finding that the NPS is one of the most useful and practical metrics by which they can gauge their performance.
Referred to as “the one number you need to grow”, the NPS has been adopted as a standard metric for performance benchmarking and is often used as a leading indicator of growth.