Is NPS (Net Promoter Score) still relevant?

Net promoter score – commonly abbreviated as NPS – is a market research metric introduced in the early 2000’s developed by Frederick F. Reichheld. Over the years, it has been tracked by countless large organizations and utilized to gauge client satisfaction and loyalty. Personally, I remember learning of NPS in the mid-2000’s as a young retail manager and found myself wrestling with the idea that this solitary metric was what would be used to rank my store against others. This had a direct impact on my annual bonus, so NPS results definitely had my attention. Many years later and after having leveraged NPS at several organizations in different industries and of different sizes, I still find myself asking “how relevant is NPS is today’s business world?”

Fully aware that many outlets are dismissing NPS as obsolete, I am a firm believer in its utility for most organizations. Like any metric, context is important when measuring NPS and attempting to extract actionable insights. The first question I ask anyone tracking NPS – or considering doing so – is what the survey looks like in terms of length, additional questions and selection process. You would be surprised how many organizations send a client an NPS survey that is one simple question: “How likely are you to recommend [Company/Service] to a friend or colleague?” and nothing more. While I admire the simplicity, there is a better way.

From experience, the best way to frame an NPS score is within a succinct survey that realistically takes 2 minutes or less for a client to complete. That NPS question should lead off the survey and your remaining questions should paint the picture of why you received that NPS score. It’s a delicate balance. Too few questions and you’re not going to get the insights you’re seeking – what can your organization do to improve, keep doing or stop altogether? Too many questions and you’re going to get limited responses. Clients value their time and you’re asking them to give you feedback that is honest, thoughtful and not clouded by incentive (especially monetary).

Your ideal final product is the previously mentioned concise survey. The strategy to gathering responses should be targeting verifiable clients, maximizing unique responses. Why is the volume of unique responses important? Simply put, it reduces your margin of error – which is present in any market research and should be below the industry standard of 3%. When you frame NPS within this model, it is absolutely relevant in today’s business world.

To give you a real-world example, I was tasked with establishing an NPS score for a fintech that had never done a comprehensive, quantitative analysis on client feedback. I worked with the C-Suite, brand strategist and website manager to create a quick, 2-minute survey that led with an NPS question and had 8 additional tracking questions. We could have easily found 40 additional tracking questions to put on the survey, but we decided on those that were the most critical. After six months, we had over 1,000 unique client responses against a client base of ~67k. We were thrilled with the higher than expected NPS score and response rate that drove the margin of error well below 2%.

But, what was most interesting? The answers from passive and detractor responses and how they answered those additional tracking questions. Those responses were the ones that I could not wait to read each week because they truly identified choke points in the business – areas where we could take action and improve our operations. Taking this feedback to our C-Suite, sales leaders and operations teams resulted in countless improvements to the business and a year-over-year improvement on an already solid NPS score. It was a win, not for the NPS question, but for the questions we asked surrounding the NPS question.

So, as I stated at the beginning of this post, relevancy for metrics comes down to context. NPS is relevant, it’s a terrific tool to gauge client loyalty, satisfaction and potential for referrals. It just has to come within a survey that encourages honest, varied and frequent feedback. Then, it comes back to the surveyor to take that feedback and convert it into actionable insights.

Not sure where to start or how client feedback – including NPS – can benefit your business? Reach out to us today and set up a no-cost consultation. We would love the opportunity to leverage client feedback to positively impact your business.