Net Promoter Score (NPS) is a scale some companies use to gauge their customer satisfaction. The scale goes from 0 to 10, with 10 being: most likely to recommend the service of that company. A rating of 9 and 10 means that the client is considered a promoter, where as a 7 and 8 means that the client is considered neutral, and for anything below 7, the client is labeled as a detractor. For reasons that we won’t discuss in this article, this scale has become an industry standard. So how good is NPS as an objective score to measure actual customer satisfaction?
The short answer: It is far from being the perfect tool. Although NPS has its benefits, It is biased, narrow in scope, and open for interpretation. Let’s dig a little deeper to understand the repercussions of using NPS as a sole guide to measure how satisfied your customers are.
Firstly, NPS is biased. Customers are more prone to voice out their dissatisfaction while keeping their “satisfied” experiences to themselves. People often remember the bad experiences more than they would remember good ones. Bad experiences link to emotions of frustration and deception, ticking people off at the first occasion. There are many ways for clients to voice out this dissatisfaction. It can be a bad customer review or a complaint to the manager. It usually doesn’t just stop here. Bad experiences are often shared with friends and family. As this story is repeated throughout the social circle of a person, the business loses reputation while having no control over it. The reason behind this behaviour is that our evolutionary brains have evolved to stay away from experiences that are linked to fear, sadness, frustration, and deceit. Our brains ensure that we remember bad experiences more vividly so that we can avoid such situations in the future. Therefore, given these factors, we are biased against providing an objective critic of our experience, leaving NPS biased.
Moreover, it is narrow in scope. When the scale is used to differentiate detractors from net promoters, companies have a plethora of tools to use such as satisfaction terminals, phone calls, email surveys and so on. The simple satisfaction terminal is narrow in scope as it provides only half the story and is confined to the premise of the question asked. Phone calls and emails are intrusive to customers and rely on their memory. For example, a company emailing a leisure traveller asking about her experience when the flight was delayed for 5 hours. Although she might have been really frustrated at the airport, she could have forgotten about the misfortune as she moved on to her holiday and had a great time. Surveying customers after the fact often results in inaccurate customer satisfaction data. Even though the response rate is usually small, companies still use mass email surveys. I’m sure you’ve seen emails asking for 5 minutes of your time for a chance to win a certain prize. What that tells us is that companies are failing to grab their customer satisfaction data and rely on such techniques to get there. This bait and hook technique biases the results even further.
Lastly, NPS is open for interpretation. Because of its simplicity, NPS remains vague and requires interpretation. There are so many variables that affect the results: leading questions, asking the wrong question, having the wrong audience, the responder’s mood and memory, and time and date. Although NPS has a formula in place for its calculation (%promoters minus %detractors = NPS), It is often misleading and not very useful to the business. Although the number of detractors might be low, they could significantly harm a business if they spread the word about bad experience. In such cases, the company is turning its focus on increasing the NPS while the essence of their activity should be to focus on detractors.
To solve the above issues, we at Binary Analytics have launched a new product that captures customer satisfaction data objectively. Binary Analytics analyses satisfaction data in a totally different approach – that we will be discussing in an alternate post – to help a company understand its potential. On top of data interpretation, Binary analytics develops a plan to get employees up to speed by gamified learning. Check out our product at BinaryAnalytics.io