Customer Loyalty and Experience
5 things no one is telling you about Net Promoter Score (NPS)
11 Apr 2020

There are three categories of organizations when it comes to Net Promoter Score (NPS): The first, who have never implemented it and feel it is just a regular satisfaction survey, the second, who have implemented it and feel no real value is derived from it and the third, who implement it and derive huge business value from it. Today, let us talk about 5 groundbreaking secrets that will put your organization in the third bucket if you are not already in it. Let us go to these straight away.

These 5 things about NPS really helped us as an organization understand the true power of the tool.

  • NPS as a metric alone is useless: The people who say that are actually correct. Surprisingly, right? NPS is of no value without a powerful driver tree beneath it, carefully crafted for promoters, detractors, and neutrals, separately. The drivers discussed after the NPS questions are actually the most powerful tools for generating actionable insights from the metric and if you are not implementing the driver tree, it is safe to say you can remove the NPS program altogether. They enable an open-ended customer response and unearth the deepest of messages.
  • NPS is always looked at relatively: Your company did an NPS study and found that the customer NPS for your service is 63%. Ok, so what? How does your competition fare? And what are the relative strengths of you vs your competition and also the relative weaknesses? How much business are you losing because of this? And how much uplift can you get if you invest in certain issues? If you do not have the answer to these questions, your organization is definitely not doing NPS right. At each cluster, NPS needs to be measured on a relative basis. Industries typically have low/high NPS depending on the nature of the business.
  • B2B & B2C NPS are entirely different: This is another very critical thing organizations do wrong while implementing and capturing NPS. Consumers in a B2C business have much lesser touchpoints and it is OK to capture NPS after a purchase or after the consumers have used the product/service enough. However, in a B2B setup, it is absolutely critical to measure NPS across different touchpoints in the entire customer journey and then looked at relatively within the process as to which touchpoints are ruining the experience and why. Even in certain B2C businesses, like Banks, the B2B approach is more appropriate.
  • NPS points to the real issues that will increase revenue growth: Typically, businesses have two kinds of issues 1) that are inherent to the industry and at a relative basis, are not leading to demonstrable revenue loss and 2) that are specific to the company and driving people away to other competitors leading to demonstrable revenue loss. The NPS framework throws light on the issues that are faced by only the detractors, and are driving them away to your competition. These are the ones that need real action. Typically, issues pointed out by promoters and detractors are not worth addressing. Also, if you are a monopoly, you do not need NPS.
  • NPS gives actionable business insights: This might not be news, but once implemented properly, NPS, in my experience, has delivered highly strategic and actionable insights. For example, for a premium building products player which had high pricing, NPS revealed that in its weak markets, the pricing was actually considered “competitive for the quality of the product” rather than premium, and it was a perception of “not enough availability” that was driving down sales.

At Praxis, our teams have deep experience in designing, implementing, monitoring and transforming NPS into one of the strongest business tools at various organizations. We understand NPS like no other, and also know how to unleash the true power of the tool if you already have it implemented.

Authored by (at the time of writing):

Aryaman Tandon, Leader, Customer Loyalty and Experience Practice

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