Why Your NPS Probably Isn’t Inspiring Anyone

Jul 15, 2020 · 3 min read

This article was originally published December 13th, 2019

I was recently prompted by this excellent white-paper to read Adam Alter, Associate Professor of Marketing at NYC Stern School of Business, on The Psychology of Ignoring a Super-threat. The chaps at CCMC hypothesise — with the help of Alter’s perspective on why climate change, despite the scale of threat, is still a tough sell — that NPS is failing to drive action because though a super-threat may be present in the business, oversimplified non-contextual numbers fail to embolden leadership to act.

They give three possible related reasons:

  1. NPS as an indicator may be too general to capture the attention and imagination of the organization.
  2. NPS may not promote accountability because it’s not tied to specific phases of the customer lifecycle or individual functional areas of the organization.
  3. NPS doesn’t create an economic call to action that is credible to Finance and Marketing.

Lack of context is at the root of all three of these things, as it is for many for climate change. Sure a lonely polar bear on a chunk of ice is a bit sad, but unless that polar bear is about to bite your face off, the threat of climate change can remain abstract. Context is all, NPS without the context of specific threat or specific opportunity is dangerously abstract.

“Hey Retailer X, your NPS is 52! Last month it was 50. Keep it up. Do you know Retailer Y’s score? If you do, have you any idea to which shopper missions, and in which need-states that applies? Versus your 52? You don’t? Ah well, keep striving to move the needle anyway!”

This is precisely why I made the numbers of Friction/Reward Indexing (FRi) contextual to your competitors. Action comes from both identifying gaps and then having a logical path to follow to close those gaps. NPS doesn’t do this, it is an ‘omnibus’ metric, a number that floats out of any context but it’s own. By stark contrast, FRi has competitive context baked into every number.

If we’re measuring CX, preference, loyalty (all good FRi candidates) then the results must prompt action. You can argue that bad scores in NPS do that and I’d agree with you, but if your NPS is that terrible then you probably have bigger issues. An individual customer’s low NPS is possibly a good indicator that something may be awry, but even then it’s instinctive, rather than data-proven whether a single low score is symptomatic of a wider malaise. We have built FRi to very specifically prompt action and to guide the direction of that action. It’s all context.

At it’s best, NPS sort of mumbles ‘there’s some smoke or something’ and then wanders off like a sulky teenager. Or it sends you a birthday card that reads “here’s to a great year, opportunity is OUT THERE!” but fails to include a map to ‘there’.

It is easier to find treasure if you know where it is. FRi marks multiple x’s on an actionable map. FRi shouts “FIRE” and then leads you to exactly the thing that is burning so you can either put it out or cook delicious steaks on it.

Omnibus numbers such as NPS are letting you down, that’s why FRi had to exist and why we need to look at the impact of both metrics on your business and customers.

(Header Image: WWF)

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