The Fail of Net Promoter Scores
Why the 'One Number' Customer Satisfaction Metric Is Past Its Use-By Date
Hello again, my lovely 👋🏻🤩
Before we do anything else…
This time of the year is traditionally one for personal resolutions that will last you for all of - oooh - about 20 days.
Tops.
Or is that just me? 🤩
But it should also be a time for reflection and planning for your business. A time to think: “what would I like to do better or differently this year?” 🤔
And that’s why I’ve been talking about various planning frameworks, and giving you lots of shiny downloads, since mid-November last year.
We’ve covered SLEPT and SWOT analyses, looked at the business terms you should know (rather than pretend to know), and why you need to dig deep into what your suppliers think of you and their plans for the future.
So now it’s time to look at the customer side of the equation (saving the best to last?), and we’re going to kick off by looking at that measure known as the Net Promoter Score (NPS).
Ah, the Net Promoter Score - that shiny metric we've all clung to like a life raft in the stormy seas of customer satisfaction.
I was introduced to the concept nearly 8 years ago, when I was a Vistage Chair1 and had the amazing Mark Robb in to speak to my Northern Powerhouse Group of CEOs and Founders on how to create a Culture of Service Excellence2.
And yes, I know that since NPS was first introduced in 2003 I was a little late to the party. But then all my members were in the same boat as me: we’d all experienced it as customers but had no idea what it meant, let alone how to introduce it to our clients 🤔
Nor that there was a “gold standard” method to using it that 99.99% of businesses completely ignored.
Rendering the information they got pretty damn useless in terms of strategic planning and improving customer relationships…
Well, my sweet summer child, a whole lot has changed in the last 8 years, so it's time we had a little heart-to-heart about our old friend NPS.
Got your afternoon cuppa ready? Closed your office door? This is your time to learn, think and grow as a leader - so let's dive in.
Remember when NPS burst onto the scene, promising to be the "one number you need to grow"? It was like finding the holy grail of customer metrics - simple, straightforward, and oh-so-seductive.
We CEOs and founders ate it up faster than free nibbles at a networking meeting.
But as it turns out, our beloved NPS might actually be about as scientifically sound as using a Magic 8-Ball to predict the success of your next funding round.
Now, don't get me wrong. NPS had its moment in the sun. It was the darling of boardrooms and investor pitches. "Look at our NPS!" we'd crow, puffing out our chests like proud peacocks.
But here's the thing: relying solely on NPS is like trying to understand the entire plot of "Sherlock" by watching only the last 5 minutes. You might get the gist, but you're missing all the juicy details.
Let's break it down, shall we?
NPS takes your complex, nuanced customer relationships and boils them down to a single number. It's like trying to describe your significant other using only their shoe size.
Sure, it's a data point, but it hardly captures the whole picture, does it?
And don't even get me started on the lack of actionable insights. Knowing your NPS is great, but it's about as useful as knowing the airspeed velocity of an unladen swallow3 if you don't know what to do with that information.
It's like having a treasure map without the "X marks the spot" - you know there's gold somewhere, but good luck finding it.
Now, my lovely, I know what you're thinking. "But it's so easy to implement!" Well, so is microwaving a burrito, but that doesn't make it haute cuisine.
In our world of quantum computing and AI, shouldn't we expect a little more sophistication from our metrics?
Here's the kicker: there's precious little evidence that NPS actually correlates with business growth.
Shocking, I know. 🫨
It's like finding out that your lucky socks don't actually improve your coding skills. (Sorry to burst that bubble, by the way.)
So, what's a savvy Founder to do?
Fret ye not, my lovely, for the future of customer experience measurement is as bright as a supernova. We're talking holistic approaches that combine quantitative metrics with qualitative insights. It's like upgrading from a flip phone to a quantum computer - suddenly, you're seeing the customer experience in glorious technicolor.
Imagine using AI-powered sentiment analysis to understand the emotional nuances in customer feedback. Or leveraging predictive analytics to forecast customer needs before they even arise. It's not science fiction, my sweet summer child - it's the cutting edge of customer experience management.
And - actually - I’m not surprised at all that it’s time for a refresh, because when I too got caught up in the NPS hoo-hah, I’d forgotten the big piece of work that I did in the mid-1990s for a client in Scotland. The one that was the corollary to the piece we did on supplier perceptions and plans…
Now, I'm not saying we need to take NPS out back and “give it a good talking to”, as my first Sergeant Major would say about a recalcitrant new squaddie.
It can still play a role in our metrics toolkit. But let's treat it like that old programming language we keep around for legacy systems - useful in its place, but not the be-all and end-all.
And let’s think more about what would be really useful to us in terms of not just understanding what our customers think of us (and why), but also what would be useful to us as we continue to innovate and develop our own products and services.
An insight into what’s happening in their world, which may significantly influence the decisions we take in ours…
As we bid a fond farewell to the era of NPS dominance, let's embrace a more nuanced, sophisticated approach to understanding our customers. After all, as Founders and leaders, we're all about pushing boundaries and challenging assumptions. Why should our approach to customer experience be any different?
I’ve been putting a lot of thought into this, and next week I’ll reveal my version of The World’s Most Helpful Customer Perceptions and Plans template.
And yes, you’ll get it as a lovely pdf download as well…
Remember, my lovely, the most successful businesses of tomorrow will be those that can synthesize multiple data points to gain a true understanding of their customers' needs, desires, and pain points. It's time to evolve beyond the "one number" and step into the age of comprehensive customer intelligence.
So, are you ready to revolutionize how you measure customer experience? Or are you going to cling to NPS like you’ve just left a sinking ship and this is the only liferaft you can find?
The choice is yours, but I know which option gets my neurons firing.
Until next time, keep innovating, keep questioning, and for the love of all things binary, keep your metrics as cutting-edge as your technology!
Go! Confront the problem! Fight! Win! And call me when you get back, dahling. I enjoy our visits…
🙏🏻🙏🏻🙏🏻 Thank you for reading Founders' Fuel™. I write these posts so that I can help people like you become the leaders their businesses (and dreams) deserve.
This post is public so please feel free to share it with someone that you think will appreciate or benefit from it.😎🤜🏻🤛🏻
P.S. If you're still using NPS as your primary metric, don't worry. We all have our guilty pleasures. Just maybe don't lead with that in your next pitch deck, okay?
Long story why I’m no longer with Vistage, but suffice it to say that they were not good at working with or managing female Chairs…
Honestly, it’s the personality and skills of the Chair, the mix of members, and the speakers that create value for a peer network organisation like Vistage. And there are much better ways of achieving that mix without their high fees and inefficient support…
Ask me how I know 😎
African or European…