Why NPS is Still The Top Dog

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The Net Promotor Score (NPS) metric first took the marketing world by storm in 2001. It’s now 2021, and things have changed over the past year, let alone the past two decades. So how much value does the NPS metric still hold after all this time? Think of NPS like gravity, and just as apples still fall straight down from trees as they did in Sir Isaac Newton’s day over 350 years ago, NPS is still the North Star for understanding the nuances of the customer experience at your company.

It’s understandable that people question the utility of such a venerable metric when we’re living in a changed world. By some estimates, the pandemic accelerated digital transformation by as much as a decade. Businesses that were built for online engagement (think Amazon or Etsy) thrived, and companies that hadn’t previously developed robust digital channels scrambled to do so last year since the way people found, purchased and received products and services changed seemingly overnight.

Our ability to measure satisfaction on the customer journey hasn’t really caught up with these transformations. Higher levels of engagement on an ever-increasing array of digital channels gives brands more data, which translates into busier marketing dashboards. But when it comes to measuring sentiment — how customers feel about a business — NPS is still king.

Trust Hierarchy: Personal Recommendations Are #1

Here’s another way of looking at it: We’ve been online for a couple of generations now, and we’re still concerned with cybersecurity. Some concerns are timeless, and if anything, businesses must be even more focused on whether a customer would recommend them now than they were 20 years ago. This is because peer-to-peer recommendations carry more weight than ever.

If you’re looking for a new product, you’re more likely to trust a friend’s testimonial than even the slickest ad, which is especially true for younger consumers. One study found that 38% of people surveyed considered advertising a reliable source of information about a product or service, but friends and family members were the most trusted source of information with an overwhelming 93%.

The importance of personal recommendations shows why NPS is still such a crucial metric. With its tried and true “how likely would you be to recommend…” survey, NPS gets immediately to the heart of consumer trust and brand loyalty in a single question.

NPS Lets You Walk a Mile in Your Customers’ Shoes

NPS scores are calculated by asking customers their likelihood of recommending a product or service on a scale between zero and 10. Those who chose 9-10 are “promoters;” those who choose 7 or 8 are “passives,” and those who rate their likelihood from 0-6 are “detractors.” It’s simple to understand and it gives you an opportunity to dig deeper:

Following up with detractors allows you to identify any issues and close gaps so you don’t lose more customers. A detractor rating could be just a one-off experience that caused the customer to assess your company negatively, but it’s important to ensure that’s the case.

Addressing unhappy customers’ concerns can not only keep them on board, but it can also make them less likely to share a negative experience with their peer group. With the right outreach and mitigating actions, you can even turn a detractor into a promoter.

Following up with passive customers can tell you where you’re falling short or failing to align with customer values, providing opportunities to improve the customer experience overall.

The bottom line is that conducting and following up on NPS surveys gives your team an opportunity to walk a mile in the customers’ shoes. It provides your team with an obvious goal to shoot for (increasing promoters and decreasing detractors), and it puts your company’s focus where it belongs — on the customer experience — which can help you build a positive, customer-centric culture.

It’s a simple metric, but with other supporting data — including automated follow-up surveys — you can learn so much more about the sentiment of your customer base. NPS is a meaningful data point across products, customer service teams, regions and even time. For example, customers who buy a product that is purchased infrequently, like beds, vehicles, or life insurance, can still be promotors via recommendations. The versatility and simplicity of NPS can’t be matched, and that’s why even after all these years, NPS is still the top dog metric measuring customer experience.

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