Why brands need to move beyond NPS

When it comes to measuring customer satisfaction and loyalty, few metrics are as widely known or used as the Net Promoter Score (NPS). But how effective is it as a metric for evaluating user experience (UX) and customer sentiment? In this blog post, I will be discussing some strengths, and possible blind spots that emerge from using NPS and discuss alternatives that provide a more comprehensive understanding of customer satisfaction.

What is the Net Promoter Score (NPS), and why is it so prevalent?

NPS is based on a simple question, “On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend?” Respondents are then categorized into three groups: promoters (score 9-10), passives (score 7-8), and detractors (score 0-6). NPS is calculated by subtracting the percentage of detractors from the percentage of promoters.

NPS emerged from a 2003 Harvard Business Review article by Frederick F. Reichheld. He proposed that companies could take a pulse of how their customers feel about their business, by tracking a single metric, which can determine loyalty.

Broadly, NPS claims legitimacy from the following:

Simplicity: It is easy to understand and calculate, which makes it accessible to businesses of any size.

Comparative Analysis: It lends itself to benchmarking. Companies can easily track where they stand in relation to their competitors.

Correlation to Business Growth: Higher NPS scores suggest higher business growth, as promoters are more likely to become repeat customers, and provide referrals to others.

This is the perfect storm. After all, here is a business metric that can be tracked over time, is relatively easy to measure, and is easy to understand – even for those not from the world of statistics.

Limitations of NPS

NPS presumes that people will promote a brand (or not). Yet customers may be satisfied with a brand and not recommend it. Jared Spool in his article does a convincing breakdown of why the science behind the calculation is wonky, to put it mildly. Below are a few more reasons why I propose to move beyond NPS.

Potential Inaccuracy: Use of a rating scale creates noise in the data by introducing subjectivity as some people will naturally rate experiences higher or lower than others. One respondent’s 6 or 7 out of 10 could be another’s 8 or 9. A holistic view of user experience can only be achieved when you also collect performance metrics such as task success rates and task times.

Easy to game: It is extremely easy to introduce bias, either intentionally or unintentionally. Ask customers right after they complete a task successfully, and they will score your brand higher. Furthermore, asking after completion means you have automatically eliminated those who abandoned the process. Offer a gift card and you will find scores going up. By treating higher NPS as a target, brands inadvertently create an incentive to game the system, without providing insight into sustaining that level of customer satisfaction.

Oversimplification: As a UX researcher, nothing pains me more. Reducing customer sentiment to a single number oversimplifies the complexity of user experience, which is multi-dimensional in nature. Customer experience is the sum total of several touchpoints across your products, services, website, and brand, as well as employees.

Hard to gauge true intentions: Because a respondent is identified as a promoter, does not mean they will recommend your brand. Ideally, you need to be able to track their engagement over time to see if they have actually recommended your brand (and to whom).

Having the right inputs into your brand health tracking is critical to growth.

We at RESEARCH STRATEGY GROUP have extensive experience in tracking brand health benchmarks in several sectors including lottery and gaming, packaged goods and more. For more on our expertise in brand health strategies, click here. We recommend creating a custom-designed brand health scorecard with metrics that make sense for your organization. Brand health studies also help you understand who your direct competitors are and measure the effectiveness of your strategy.

Alternative Metrics to Consider

System Usability Scale (SUS): Created in 1986 by John Brooke, SUS is a validated questionnaire that assesses the usability of any system or product and provides a holistic understanding of user experience. It does this by evaluating factors such as ease of use, learnability, and efficiency. It is easy to administer, and can be reliably used on small sample sizes.

Customer Effort Score (CES): Developed in 2010, CES argues that effort is a key driver of customer loyalty. CES measures how easy or difficult it is for customers to accomplish their goals while interacting with a product or service. It is premised on the belief that generating loyalty is not about delighting customers. Rather it is about minimizing the efforts that customers need to expend to do business with your brand, and that streamlining processes can lead to increased customer satisfaction. Naturally, one use case is to deploy this right after a customer interacts with your customer service team. This will reveal the extent of the difficulty faced in getting an issue resolved.

Customer Satisfaction Score (CSAT): CSAT typically consists of a single question that asks customers to rate their satisfaction level after a meaningful interaction. It is best used to measure short-term customer satisfaction. When tailored to a specific aspect of the product or service, businesses can gather more detailed feedback.

Conclusion

Alternative metrics such as CES, SUS, and CSAT can help brands gather richer feedback, identify specific pain points, and make informed decisions that lead to enhanced customer satisfaction and loyalty.

post by Adi Prakash