Is Net Promoter Score the Ozempic of Metrics?
All filler, no killer
Net Promoter Score (NPS) may be the Ozempic of metrics. Both offer:
The illusion of progress
Addictive simplicity
A measure; not a long term solution
Diminishing returns
Vanity
TL;DR:
What’s Wrong with NPS?
Lack of Actionable insights: Pure marketing fluff!
Empty Promises: Hypothetical questions are weak
Timing Misalignment: When you ask impacts what they say
Diminishing Returns: Expanding your ICP can actually hurt your NPS
Siloed Feedback: Context is king
Sneaky Mislabeling: NPS is not CSAT
What to Inject Instead
Customer Effort Score: Try to measure loyalty
Rigor and Randomness in Sampling: Don’t get lazy
Qualitative Feedback: Sit down and talk to customers
Customer Journey Analytics: Map it out and rely on activity based metrics
Net Dollar Retention Rate (NDR): Do they keep buying?
I’ve had a bone to pick with NPS for too long. I see it on your website. Yes, YOU! And today I woke up and chose violence.
What’s wrong with NPS?
#1. Lack of Actionable Insights: NPS can tell you how many promoters or detractors you have, but often fails to reveal why customers feel that way.
The NPS classification system groups consumers into three buckets—promoters (those giving scores of 9 or 10), passives (7 or 8), and detractors (0 to 6). This rating system is arbitrary and eliminates potentially useful information. OK, we suck… but why? And without understanding the "why" behind the score, it's challenging to make meaningful improvements.
This is one of my central concerns: NPS is TOTALLY marketing first; someone actually trying to improve their company would never ask for such a naked metric, as it’s impossible to rely upon it for operational improvements.
#2. Empty Promises: True customer advocacy is not a hypothetical. Just because someone says they “would” recommend you to someone else, doesn’t mean they actually “do”.
This is where I think referral programs are worth their weigh in gold if they work - it takes a lot for someone to go out of their way to recommend you to a friend, who will judge not only you, but also THEM on the merit of their recommendation.
In my opinion, if a referral program works (and you aren’t having to give away a bazillion dollars as a reward) then it demonstrates real product market fit. Also, if I had a dollar for every time I told friends I “would” meet them out for drinks that night and then went to sleep instead, I’d be a rich man
#4. Timing Misalignment: The timing of when NPS surveys are sent can greatly affect the scores. Customers might rate their experience differently based on external factors unrelated to their interaction with the company, such as their mood or events in their personal lives.
Who pee’d in your Wheaties this morning?
Sometimes it’s not you, it’s them. You can catch someone in a foul mood.
And, more crucially, you can present a survey to someone at the WRONG time on PURPOSE. Asking someone for an NPS right after they completed an action that provides demonstrable value tips the scales in your favor.
#5. Diminishing Returns: You can’t please everyone in life. I’ve tried; just ask my mother in law (Hi, Denise).
Even if you do great, at a certain point you can’t push the damn thing any higher.
In fact, it often falls as you grow and widen your customer base past your initial “core” ideal customer profile. This is all natural, of course, but it looks really bad from a marketing angle to need to report a degrading metric.
Nonetheless, teams that rely upon NPS find themselves in a Sisyphean endeavor, rolling a ball up the hill that wants to tumble back down.
Like Ozempic users, they try to step on the scale, and stay at the number. But it gets harder over time as your body, and customer base, adjust.
#6. Siloed Feedback: NPS scores are often collected and analyzed in isolation, without integrating other forms of customer feedback from social media, customer support interactions, or product usage data, limiting the understanding of the customer experience.
Customer activity data would be much more meaningful than a binary score void of context.
#7. Pure Mislabeling: Sometimes NPS isn’t really even NPS!
You'll often see companies taking G2 Reviews, which have a structural upward bias, to impute an NPS. Or even worse, relabeling CSAT (Customer Satisfaction Score) as NPS.
NPS has become a bastardized catch all for “do customers like you?”
What to Inject Instead
#1. Customer Effort Score (CES): A service metric that measures how much effort customers put in to interact with your business.
These interactions can be something like how much effort it takes to use your product or service or how easy it was for them to have a problem solved by your service reps.
It's a strong predictor of loyalty, as customers value effortless experiences highly.
Isn’t that what we are trying to drive to anyways?
Is this customer loyal?
Loyal enough to help us gain MORE customers?
#2. Rigor and Randomness in Sampling: Ensure that your customer feedback mechanisms include rigorous and random sampling methods. This reduces bias and makes the data more representative of your entire customer base, not just the most vocal ones.
If it’s not random, it ain’t right.
Regardless of if you are using NPS or CES, randomize the survey population, as it’s easy to subconsciously target your happiest, most successful customers. Don’t exclusively ask for a rating after a successful purchase or an “aha” moment - that’s biased - watch where you place the question.
TANGENT: A hard lesson founders learn - the loudest customers are not always the right customers to listen to.
What I mean to say is that the most vocal customers will often ask for very specific changes to your tool that are great for THEIR unique use case, but may not be demonstrative of the broader majority’s core use cases.
But since they are the loudest, what often happens is additional features are added for a very small customer set, eating up disproportionate cycles from the development team, and potentially even worsening the experience for the broader user base.
#3. Qualitative Feedback: Supplement quantitative metrics with qualitative feedback. Encourage and analyze free-form responses and conduct interview to get a fuller picture of customer sentiment.
This is why customer advisory boards were invented.
Get customers in a room and actually hear about their experiences, in qualitative terms.
#4. Customer Journey Analytics: Use analytics to understand the entire customer journey, identifying friction points and moments of delight. This holistic approach can reveal deeper insights into customer behavior and preferences, guiding more targeted improvements.
Since NPS is effectively evaluating the entire customer experience, including every touchpoint, in many cases it can lead to conclusions about the product that are misguided. Therefore, NPS is no good for feature level evaluation.
#5. Net Dollar Retention Rate (NDR): This metric measures revenue retention and growth from existing customers, accounting for upgrades, downgrades, and churn. It provides a direct link to financial performance and can be a more concrete measure of customer satisfaction and loyalty.
And as a sanity check, compare your NPS against your Net Dollar Retention - there’s a clear correlation between a customer segment with high NPS and a high NDR. If NPS is high but NDR is not top quartile, your testing is probably off or biased.
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Really good article, but I have to say - am I crazy or does that Insight slide plotting NPS and NDR show basically no correlation at all? To be fair, I’m just eyeballing it…