Before getting into my views on Net Promoter Score (NPS), let me present you in simple terms on what NPS is all about…
The concept of NPS is very simple where by asking one simple question to your customer “On a zero to ten scale, how likely is that you would recommend us to a friend or colleague?” the strength of relationship between your firm and customer can be measured. In this system customers are classified under three broad buckets on basis of the rating that they provide for the above question.
- Promoters – Are loyal customers who are ready to promote you (Score of 9 – 10)
- Detractors – Unsatisfied customers (Score of 0 – 6)
- Passives – Unhappy customers (Score of 7 – 8)
It is to be noted that detractors may still be your customer probably due to high switching cost involved but they would drain your company’s resources by placing unreasonable demands and create negative publicity to your products and service to the outside world.
The passives are neither happy nor unhappy and if they come across better alternatives they may switch to other supplier at any point of time.
The promoters are the ones who promoters your products and services by “Word of mouth” through conventional / other evolving channels like social media.
Finally the net promoter score is nothing but “number of promoters – number of detractors” and it can range from negative to positive end of spectrum depending on how your products and services stand in the market.
As an Organization your next step is to see how you can convert the detractors to passives and passives to promoters over a period of time ….
Now coming back to my views on this,
- The most beautiful aspect of Net Promoter Score is its simplicity. Betting on one simple question to understand how happy your customers are.
- The next good part of it is it removes subjectivity by bringing out a meaningful metric that can be used to benchmark against yourself as well as benchmark against competitors.
- The third one is in this busy world where it is difficult to get hold-off customers’ time to get their feedback, bugging them with pages and pages of survey questionnaire is never going to work as they are most likely not going to respond. On the other hand a simple question to capture their feedback at the right instances (Moments of truth) administered in a user friendly manner can be practically implemented and provides useful insights too.
- Finally if you are goal oriented organization, this is an excellent model as it is an “Outcome” based approach to measure customer satisfaction level
Now coming back to the cons of this model, these are my thoughts …
- NPS is too simple such that it doesn’t give any insight beyond whether your customer is willing to refer or not. As an Organization you cannot improve / capitalize on your positives, unless you get to know from your customers the details on service parameters you exceed expectations or fail to meet your customer expectations.
- Similarly technically speaking I don’t know the difference between the NPS and an overall satisfaction rating questionnaire that you generally ask in any surveys. May be NPS “Value” is blown out of proportion.
- The last and final issue that I see is it may not work well in all contexts. To give an example in a B2B context, why your customers have to refer you to their other competitor as they may end up losing his competitive advantage? This may work well for a B2C context where you have customers in 1000s that are not competing with each of other but also socially connected well
Overall like any new concept, the success depends on the context of usage, the way of execution and your innovative ideas in complimenting / blending it with other conventional measures of customer satisfaction than blindly getting carried away by NPS…