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NPS challenges 

NPS (Net Promoter Score) is a popular metric that intends to measure customer satisfaction or sentiment. The NPS metric attracts users because it's simple, easy to understand, and easy to put into use. In use for the past two decades, NPS values indicate a business's resiliency based on customer satisfaction levels or customer loyalty. 

The value of NPS faces challenges because of its simplicity. Simplicity limits the value of the NPS as a standalone metric to measure customer satisfaction, let alone understand what needs to be corrected to improve customer sentiment. NPS overlooks other factors that affect customer decisions. 

This guide describes NPS challenges, limitations, and how to maximize NPS to gather valuable business insights that direct actions for improvement.  

What's the value of using NPS?

NPS provides value by measuring customer loyalty and satisfaction at any time along a customer's journey. For businesses where word of mouth is a vital promotional avenue, NPS provides a scalable and adaptable value to promote a brand reputation. NPS provides data companies can use to assess their standing against the competition. Long-term NPS data provides useful trends indicating whether customer satisfaction is improving or dropping off. The problem is that NPS value is limited and doesn't provide detailed information on improving or addressing customer issues. 

NPS limitations 

NPS scores provide value, but it's limited. What's missing? Basically, NPS scores do not supply any information to identify opportunities for improvement. All the business gets is a number and no supporting reasoning. Businesses need to use the NPS but add in other metrics to truly build a competitive roadmap for the future. 

NPS limitations include: 

• Limited focus
• Biased scoring
• Potentially false cause and effect
• Lack of benchmarking
• Lack of context
• Questionable validity

Limited focus means the process of using a product or service involves multiple touchpoints. There's finding the product, ordering it, receiving it, and then using it. What part of the process is the customer responding to with an NPS rating? It's impossible to tell. Also, the NPS scoring isn't across time. Customers may be happy for a limited time. There's no indication of how long the joy lasts. 

Customer scoring of NPS may be biased or even coerced. When the customer answers the survey and provides a score, they may hesitate to enter a bad score. They may score in the middle even for poor performance. Why? Because a score is relative. One person's ten is another person's 4. 

False cause and effect means that high NPS scores don't mean the customer actually purchases another product or generates a referral. High scores may lead businesses to false conclusions based on using NPS as a single metric. 

Benchmarking means knowing not only your NPS score but also those of your competitors. Without knowing how the competition rates, it's difficult to gauge if the score is high or low. 

NPS also lacks context regarding the score. Based on the NPS value alone, there's no way to know why the customer chose the score. Without context about why the customer loves or hates a product, there's no real way to be sure what the root cause of the score is. Without context, a business cannot take any action to improve NPS scores that isn't completely random. 

What is questionable validity? Many statisticians believe NPS values are not an accurate measure of growth or performance. Because the NPS value doesn't consider all factors affecting business performance, the value is not truly indicative of performance. NPS scores mask or hide the effects of churn, new customers, and returning customers. What's a business to do? Add complexity for a more balanced and realistic view of brand reputation and performance. 

Overcoming NPS issues and challenges

One needs to add other metrics to overcome the limitations and challenges of NPS scores. Adding metrics like customer retention rate, revenue, and customer lifetime value provides more insight into the NPS score values. Additionally, follow-up questions should be asked along with the NPS score. For example, "What is the main reason for your score?" or "What can we do to improve your experience?" Then, analyze the open-ended responses to extract trends or issues affecting the customer experience. 

Other ways to overcome NPS limitations: 

• Use other metrics based on the objective
• Implement controls for drifts using benchmarking
• Value as trends rather than absolute numbers 
• Monitor NPS field use to reduce false numbers and ensure integrity
• Follow-up with respondents to gather more details
• Ask open-ended questions to gain real value on customer sentiment
• Segment NPS scores based on customer region or country
• Capture metrics like customer retention, repurchase rates, and order values

You're not done yet! The real value from metrics is gained from analysis and followed by action. Consider developing a schedule to review metrics with stakeholders and updating roadmaps and strategic plans. The real value of metrics is the changes made to improve customer satisfaction and service levels. 

Looking to improve your brand reputation and customer service levels? Crewhu helps managers and CEOs improve brand reputation, customer service scores, and employee retention. Developing a solid crew behind the business translates into higher quality service and high overall morale. Build the culture you want and gain a competitive edge on the competition with Crewhu. Get in touch today to set up a demo.