Matt Dixon makes a compelling case in his book, The Effortless Experience, that the popular Net Promoter Score (NPS) is nowhere near as useful as it claims to be.
When Bain & Co. introduced the NPS score they called the question “Would you refer us to a friend” the “ultimate question”; the only one you need to determine customer satisfaction and, ultimately, profitability of a business.
Ironically, the very reason NPS became so wildly popular demonstrates that Customer Effort Score (CES) may in fact be more powerful. Executives love NPS because it is so easy. It is about as close as you can get to “effortless” when measuring customer satisfaction!
When Dixon and I discussed the differences between the two scores in today’s podcast interview, he said that NPS is important mainly because CEOs like it. They like it because it boils down the complexity of customer opinion to one simple rating question.But by now even Fred Reicheld, creator of the NPS, acknowledges that the one question isn’t enough.
On its own, NPS doesn’t tell you anything about why visitors gave the rating they did. Also, by defining ranking scores as high as 8 out of 10 as “neutral”, it loses many customers who are satisfied, but not ecstatic. Until I studied customer satisfaction measurement and realized that staff could be penalized if I didn’t rank them a 9 or 10, I almost never gave that high a rating.
Which brings up another problem: guilt ratings. Even if I’m not satisfied with the outcome, I’ll now sometimes give that top ranking if I feel sorry for the staffer. It’s not the server’s fault that the food was late getting cooked and that it tasted awful.
And, of course, the question “Would you recommend us to a friend?” often gets a low score not because the customer was dissatisfied but because the person answering doesn’t think any of their friends would be interested in such a product or service. We heard that often at Web Mystery Shoppers, where we always asked our testers why they gave the rating they did.
Dixon did acknowledge that NPS can be helpful for getting a pulse on the overall brand perception, but warns users to “be careful of overinterpreting what you get out of it.”
He argues that Customer Effort score is more useful for judging true customer loyalty. And a 3rd measurement, the CSAT score is good for asking about about satisfaction with the outcome of a transaction, rather than the process. For some categories of products or services, researcher Tim Keiningham argues that Share of Wallet will give a more realistic assessment of purchase behavior (see Why The Net Promoter Score Is Overrated (& What You Should Measure Instead))
There Is No “Ultimate Question”
In other words there is no “ultimate question,” at least not that we can figure out yet. Customer satisfaction, and its future impact on profitability from repeat and referral business, is not simple to measure or predict reliably.
You can get some benefit from using all of these measurement tools. I would argue, however, that ultimately true insight comes from the qualitative answers about WHY people have given the scores they have.
Perhaps once artificial intelligence gets to the point where it is really good at analyzing open-ended responses, and is fed into big databases linking comments to sales figures and profitability, across industries, we may actually find an “ultimate question.”
But we’re not there yet, despite what many companies eager to play in the AI space are claiming. Stay tuned…
Also stay tuned for Part 2 of this interview, in which we discuss insight selling, the process advocated by Dixon in another of his popular books, The Challenger Sale. To be sure you don’t miss that part, sign up for the Frank Ideas newsletter (in the box below), so you’ll be notified as soon as each episode of the Frank Reactions Podcast on Customer Experience comes out.