Search

Why NPS (Net Promoter Score) is a useless metric

Updated: Jan 24

The most commonly used customer feedback method today is called Net Promoter Score (NPS). This methodology was introduced in 1993 (not 2003 as widely reported on the internet) and was then promoted and commercialized by Bain and Co. in 2003 with the Harvard Business Review article "The One Number You Need to Grow".



NPS is popular but that doesn't mean it's good

Like so many other things, just because it's popular doesn't mean its good - take your pick at some modern pop music as an example. It may be fine for easy listening but most popular modern tunes will not be remembered in music history!


The main achievement of NPS was to simplify the feedback process from customers of companies from the 20-30 minute questionnaire methods that were popular, but at the same time very expensive and time consuming. Instead the goal was to ask one question that was supposed to reflect how loyal the consumer was towards the brand.


NPS Insight #1: NPS is supposed to reflect the "loyalty" of the consumer towards the brand and not customer satisfaction

A low response rate by default negates the effectiveness

When you have a low response rate of typically around 10%, it means that only 1 in 10 customers that receive your NPS survey actually end of answering your one question survey. Its goes without saying that if the response rate is so low then it cannot by any stretch of the imagination be representative of your whole customer base. Even if it was you would never know how to verify it... and therefor you can't. Taking any actions based on such a small response can be a slippery slope leading you to more bad business decisions than not doing anything at all!


NPS Insight #2: The average NPS response rate in B2B is a mere 11%. When you only get a response from 11% of your users this by itself deems the results to be meaningless

NPS is the cheap cousin of traditional market research

Typically in the past in order to gather information from your customer base about their experience with your brand has taken a long time and been very expensive. Your company would need to commission a market research company to compose a scientifically meaningful questionnaire, administer it and then compute the results. This process took weeks or months and cost thousands of dollars.

Therefor, when the NPS methodology was introduced companies were quick to jump onboard because the main benefit is that it's a single question survey that doesn't need any preperation work or complicated statistical analysis.


NPS Insight #3: NPS rose to fame and popularity as it meant companies could get some sort of feedback from its user base much quicker and cheaper than before

NPS is more useful in B2C relationships than B2B

Despite its shortcomings, NPS does have a time and place in a company's market research arsenal. NPS's strengths are in polling a large group of people on a specific and isolated type of interaction with the company. A B2B relationship is a much more complicated relationship with multiple touchpoints compared to the simple nature of most B2C relationships. NPS can work well when asking customers about their loyalty/satisfaction with buying a coat. In this case the variables in question would pertain to the store (cleanliness, layout), staff (responsiveness, helpfulness) and value (price and quality). So a low score from the customer base means the company would need to look into these different factors and figure out where they can improve.


Conversely in a B2B setting the relationship is much more diverse and complicated with many different variables and often different people involved in the buying and using of the product or service. One static question can in no way cover all the different aspects, touch-points and complexities of a business to business relationship.


NPS Insight #4: NPS is more suitable for a B2C relationship where you need to sample a very large pool of customers with a simple method for quick results

Why Cliezen RQS is the new NPS

There is no denying the popularity of Net Promoter Score and the reasons are understandable because until now there really wasn't a good alternative that combines the simple and quick method to get feedback from a large group of users.

But when it comes to B2B relationships especially, NPS (Net Promoter Score) is a horrible method to gather feedback as can be seen by the reasons mentioned above and the tons of criticism found online by marketing professionals.


The Cliezen RQS (Relationship Quality Score) method keeps the low-touch and cost-effective benefits of NPS but enables deeper insights into the reasons behind the dissatisfaction of the more complicated B2B relationships. Therefor Cliezen's RQS is a much better and more valuable way for your business to query your clients - and most importantly giving you ways to improve your B2B relationship to lower churn and increase client satisfaction.


#NPS #NetPromoterScore #CustomerSatisfaction #ClientSatisfaction #UselessNPS

156 views0 comments