Every couple of years, I get a resurgence of questions about Net Promoter® Score (NPS®). These surges typically coincide with research that shows how NPS is either an excellent predictor or a terrible predictor of company performance. That data often ignites a religious battle between the NPS lovers and NPS haters.
Well, it’s one of those times.
Let me start by saying that I’m an atheist in this NPS battle. We’ve had the opportunity to study and work with hundreds of companies that use NPS. I’ve recommended to some companies that they adopt NPS, to others that they stop using NPS, and to others that they start with a totally different set of metrics.
Let’s look at what we know for sure about NPS…
The reality is that the metric itself is much less important than how it is used. I’d rather use a sub-optimal metric in a way that drives positive improvements across an organization than have a perfect metric that doesn’t result in as much impact.
Here are some quick answers to key questions:
- Is NPS the best indicator of customer loyalty and business performance? In many cases, no.
- Can other metrics be used to drive positive change? Yes.
- Does NPS provide an easy to understand metric that can be widely adopted? Yes.
- Can NPS be used to make an organization more customer-centric? In many cases, yes.
- Will a company improve if it increases promoters and decreases detractors? In many cases, yes.
- Can NPS be used inappropriately? Yes.
- Can any metric be used inappropriately? Yes.
- Would I ever recommend NPS for every touchpoint? No.
- Should companies consider their specific business when selecting metrics? Absolutely.
- What’s more important, the metric or the improvement process? The improvement process.
The bottom line: NPS is neither a savior nor a demon.
P.S. In case you didn’t know, NPS® and Net Promoter® are registered trademarks of Fred Reichheld, Satmetrix, and Bain & Company.
This blog post was originally published by Temkin Group prior to its acquisition by Qualtrics in October 2018.