NPS is where customer insight starts, it’s not your ultimate goal

Marketers should be using NPS and other customer satisfaction scores as a starting point to prompt more insight but all too often they are seen as the end point.

Marketers should be using NPS as a starting point to prompt more insight.

Lots of businesses use net promoter score (NPS), as well as a host of other customer satisfaction (CSAT) scores. But are these scores any more use in predicting loyalty than reading tea leaves? It’s a seductive idea: one number to rule them all.

By Colin Lewis

This desire to quantify customers and their opinion is another strand in the data-driven marketing discussion: let’s stop doing things on instinct and start making decisions based on data. Indeed, geeking out on ROI, attribution models and effectiveness measures are all part of the need for marketing to show its true business value. The idea is that being data-driven is a good thing, and quantifying customers’ view of the brand is even better. Not a bad idea in principle.

We always want the ease of use of one measure, not the potential messiness of multiple measures. Humans love a ‘theory of everything’ that can cover all bases. If we can just use this one metric, then, bingo, we can start comparing our brand to other brands with a solid measure of the customer experience. The analogy would be using customer satisfaction scores just like P&L statements or balance sheets: a measure that we can all understand and use to pay our bonuses when we hit our NPS target. What’s not to like?

Is NPS a true measure of customer sentiment?

We know it is flawed but NPS is still useful for comparison as everybody else is using it. This has resulted in a cult of NPS, so we are all surrounded by people begging us to “rate our service” online or face-to-face.

The strongest selling points of NPS is its simplicity. It is easy for people to understand the goal of having more promoters. And given the obsession with the idea that ‘what gets measured get managed, and what gets managed gets done’, NPS gets pushed to the front of the class.

But there are flaws in this thinking, one of which is this: contrary to the
purveyors of ‘brand love’ and ‘brand purpose’, customers are not lying awake at night thinking about your brand. At a more practical level, NPS and CSAT scores do not measure whether your responder is a top customer, a one-off client or, worse still, a person who just likes to rate thing badly.

NPS and other measures are being asked to work too hard. It should be a starting point to prompt more insight but today, NPS is seen as the end point.

Nor are these scores consistent in the context. Should the question be asked early in a customer’s journey or later? You will get a different result depending on the context. There is really no one number that represents a customer’s experience

Also, NPS does not tell you why a score is bad, or why it might be improving. There is no diagnosis, which is the starting point of defining strategy, as Mark Ritson rightly points out.

Talking to a couple of fellow marketers about NPS really proved to me how deep its adoption is. One service brand’s senior management are bonused on the score, simply because it correlates with one of the company’s key business drivers.

I’m not so sure; this particular industry has so many moving parts that ascribing the voice of the customer to NPS is fallacious.

When I’ve used NPS, I’ve quickly realised the consumer view of the industry drove perception more than I would have liked. The notion of a consumer making up their mind about a brand or service interaction in a split-second based on an often poorly laid out and inconsistent style means our scores are unreliable. Improving the score becomes a bit of a game, as opposed to a tool to unlock a prediction about what a customer will do in the future.

The doyen of marketing measurement and author of Marketing and the Bottom Line, Tim Ambler, speaks to this point in a paper entitled ‘Assessing marketing performance: Don’t settle for a silver metric’ in the Journal of Marketing Management. He agrees marketing performance can and should be evaluated. However, he rails against the idea that there is a single number, financial or otherwise.

NPS and other measures are being asked to work too hard. It should be a starting point to prompt more insight but today, NPS is seen as the end point.

Colin Lewis is CMO at OpenJaw Technologies.

This article originally appeared in MarketingWeek. Photo by Marvin Ronsdorf on Unsplash.

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