This is part 2 of the article series NPS, the only number to grow is flawed, here’s why. If you have not read part 1, you can find it here. In this part 2, we will focus on the two questions we briefly touched on in part 1.
Is NPS even the correct metric to measure?
My answer is both yes and no. My yes is for NPS as a metric but no for the way it is measured today.
Let’s look at NPS as a metric. A response to the question, how likely are you to recommend or would you recommend us, indicates a customer’s future intent. It is a leading indicator, informing about the future for the business being shaped by the current experience offered by the company. Because if it is very positive or high, then you have not just delivered satisfaction but also surpassed to delight the customer that they are willing to keep their business with you, probably buy more from you and bring more business by referring their friends and family. If it’s not positive or low, then we are at risk of losing their business as well as the potential business they could have brought from their family and friends. This view of NPS makes it a very valuable metric.
When most people say “NPS,” they are generally referring to the relationship NPS which is a recurring NPS survey sent at a standard interval, (quarterly, bi-annually, yearly) to get insights into the overall customer experience and loyalty. You may also see transactional NPS where you ask a customer about their likelihood to recommend after a key milestone, touchpoint, or transaction to measure how the customer’s satisfaction and loyalty changes after that point. While it is assumed that the NPS score implicitly indicates customer experience and loyalty, rather it is more of an explicit indicator of the customer’s current perception of the brand. When someone gives 3 on the NPS scale in a relationship NPS or transactional NPS, it doesn’t mean they are likely to leave you or bad mouth about you, but it means they are not happy or satisfied with you. They are not carrying a positive perception of your brand.
When responding to NPS question, they are not rationally thinking or exactly recalling everything they have experienced so far but irrationally scoring based on the current…