3 minute read
At their core, Net Promoter Scores (NPS) are based on simple, one-question surveys that are meant to gain insights into consumer mentality. The surveys encourage responders to select a numeric rating for how likely they are to recommend a company's product or service to friends or colleagues. Responders who answer with a 0 - 6 are listed as “detractors," 7 - 8 are "passives," and 9 - 10 are called "promoters."
But net promoter scores aren’t always an accurate portrayal of consumer mentality. Here’s why:
1. Results can vary greatly based on when and how the survey is taken.
In a net promoter survey, respondents are asked to choose from 11 possible scores, and yet all 11 scores are then grouped into three possible response categories. Not only are respondents grouped into three ambiguous categories, but the context of the surveys is never the same. If the context continuously varies, then the survey administrators can never establish an accurate baseline.
Without an accurate baseline, all of the results could mean something different. For example: Was it the fact that you administered the survey on a Wednesday the reason behind the latest score, or was it due to the fact that responders were asked to take the survey before they logged into your site?
Two very different contexts could reveal two very different interpretations, which leads us to the final ambiguous fact: scale is subjective. An "8" might not mean the same thing to all people.
Don't believe us? Just ask your local pediatrician how different children rate their pain, and you’ll soon see that number ratings are completely subjective.
2. Not everything that counts can be counted — and not everything that can be counted counts.
Not all NPS questions are easily relatable to every industry or situation, and yet far too many organizations are putting all of their eggs in one basket based on score. In a 2003 Harvard Business Review article, NPS Creator Frederick Reichheld, went on the record to say that the NPS "willingness to recommend" question doesn't work for every product, situation, or industry. NPS needs additional context.
A more accurate approach to customer insights is to focus on a customer advocacy program that leverages a variety of customer feedback tools. These tools should encompass a communications platform that makes it easy for customers to share their insights and shows the customers that the company is actively listening to their opinions.
3. Your customer’s love can be difficult to quantify.
NPS isn't a magician's glass ball; it doesn't accurately predict if a customer will actually return to purchase a product or service again. Nor does it forecast whether the customer will encourage a family member or friend to purchase the company's product or services. At its core, the results from these surveys simply show the number of people that are willing to take less than 30 seconds to click a button, with even less thought spent on the actual choice, so that they can continue on with their day. In short: NPS isn't the same as customer advocacy.
Customer advocacy and referral programs provide concrete results on a customer's willingness to take actual actions. Instead of estimating intent, the referral programs focus on tracking the customer after they have indicated their willingness to buy again or refer others to the company. In fact, customers referred by other customers have a 37 percent higher retention rate. Additionally, customers who have converted into loyal brand ambassadors are 70 percent more likely to be seen as a good source of information by prospective consumers. The numbers are clear; customer advocacy delivers real, actionable customer results.
Love your customers — and your bottom line!
Instead of relying on the results from one or two net promoter surveys, companies need to collect more specific customer sentiments. They need to use customer advocacy to their advantage by relying on multiple customer feedback tools. Through these measures, companies will be able to better determine which customers are true brand ambassadors, which are passive "brand fans," and how to better tailor their marketing messages so that more customers can be converted into loyal brand ambassadors.
Posted April 11, 2015 in Customer Loyalty