The uptake and use of Net Promoter Score™ (NPS)  is now almost universal, yet almost weekly you will see an opinion piece or article designed to challenge it's use and it's ability to drive business growth.

What is Net Promoter Score?

At its simplest, NPS is a single question based on a customer’s willingness to recommend your company that is often used as a proxy measure for customer loyalty. 

Does it work?

Having worked in specialist customer experience agencies, working with huge budgets, and many of Australia's largest and leading companies, I have seen ample examples where NPS can be seen to correlate very ell with positive customer behaviours like visiting more, spending more, and talking positively about your products or services to others.

There is continued long debate around the use of NPS, and whether it is the ‘best’ measure of customer loyalty. I have personally been lucky enough to be exposed to a wide range of expert opinion and review. My opinion is that there are a number of ways to measure customer loyalty, some better than others and no one measure that is right for every company … but I really do like NPS. 

Why?

I like the NPS measurement system because I have seen a growing number of companies who have implemented a NPS based program achieving positive commercial outcomes (e.g. increased customer retention, spend, advocacy). whether NPS is the most 'predictive’ measure of customer loyalty to me doesn't matter. What matters is these companies have a ‘focused' measure of customer experience.

Regardless of the exact measure, the key to success for most organisations are:

Top down buy-in      

I have seen that requests from clients to help them implement an NPS program have been driven internally by their company CEO (or other like senior stakeholder). The success or failure of any customer engagement program will often be determined by the level of buy-in from the senior stakeholders, and so the drive from the top is certainly positive.

Bottom up engagement     

I have personally experienced customer experience programs where the design of the primary (or key) outcome measure is somewhat complicated, and cannot be easily understood by those at the front-line (or the top for that matter). Although a more complex measure (e.g. a composite score derived from a number of survey questions) may be a slightly better predictor of future customer behaviour, if it is not easily understood staff will not engage in the program, and it will not succeed.

Organisation wide

Generally speaking it is acceptable to use the NPS measure across various  touch points within an organisation (i.e. call centre, retail store, online). Why does this matter? Increasingly customers are interacting with organisations using a variety of contact methods, and a customer’s  perception of your organisation is not shaped by a single experience within a single touchpoint. As such it is valuable for an organisation to  have a single common currency, which is measured and monitored     continuously.

I believe (as does the author of “The one number you need to grow”, Fred Reichheld) that NPS is not necessarily the right metric for every organisation; however if the implementation of an NPS measurement system focuses your whole organisation on customer experience improvement, in my mind that’s a good reason to use it.