Why Mark Ritson is wrong about NPS

OPINION: In response to Mark Ritson’s thoughts on intelligence, Jon O’Loughlin says today’s complex environment requires more sophisticated approaches than NPS is capable of informing.

Jon oloughlin headshotMark Ritson makes some excellent points in his article on marketing intelligence, and while we appreciate the simplicity of his message regarding NPS, there are several points that need to be redressed.

We can all agree that listening to customers should be the heartbeat of any successful company and it is only through linking intelligence that companies can get a competitive advantage. But how we accomplish this does not need to be reliant on an ineffectual measuring system.

Let me explain.

 

What’s the point of doing anything if not for future growth?

If NPS has a “weak to non-existent correlation with future business growth” (or anything else for that matter), it cannot possibly be confused with genuine intelligence, so why use it in the first place?

Using simplicity as a rationale when it is widely accepted that NPS is sub-optimal only serves to undermine the credibility of true customer experience feedback. Worse still, this is misleading for many C-suites and whole businesses that continue to target and incentivise based on a metric they can neither effectively action or control.

The reason it is successful is not because the call centre can activate change – it is simply because companies use NPS as this ‘merciless’ stick to beat their teams to drive change.

The problem is that this change is often only reactionary and superficial for change’s sake and only looks to improve a score. Sure, it may have been effective in the short run but it is not productive for long term effects and true leadership.

 

NPS is so simple, but customer relationships are not

NPS programs typically fail to identify the drivers of the scores but instead give teams high level, rational feedback that is neither specific, nor diagnostic enough to guide and direct long term improvement.

As a result, teams adopt a short-term perspective by constantly amending their processes and action plans after each wave of NPS.

This is further compounded by companies operating their customer experience and innovation programs in separate silos, leaving customer service staff to self-assess how they can improve whilst their innovation expert colleagues spend their time predicting the future.

 

A new perspective

While we don’t disagree with Ritson that “NPS has changed the world of service satisfaction more than any other metric in the last 50 years”, we do challenge the thinking that it should continue to be a key – and frequently the only – measure of CX.

Today, companies are on a continual journey of adaptation and improvement to keep pace with a constant rate of change and innovation. Successful companies have proven to have a far deeper understanding of their customers’ needs and what connects them emotionally.

In short, NPS hasn’t evolved. Businesses have. This is a big problem.

Our perspective is that customers buy a company’s products or services based on an expectation driven by the brand promise.

This promise that every brand makes is to deliver emotional and rational benefits to customers. A customer experience program must therefore measure both benefits and link back to the brand metrics Ritson mentions.

We have seen countless examples where including a measure of preference for a brand is a better predictor of future behaviour.

Some of the best companies combine their customer service and brand teams with their innovation experts to help identify new products and services that will fix the problems expressed by customers.

The complexity of the environment companies operate in today requires more integrated and more sophisticated approaches than NPS is capable of informing.

In the end, we agree that to be “humble, able and ready to listen” is vital. But it’s impossible to do this effectively when ill-informed about your customer.
Image copyright: mukhina1 / 123RF Stock Photo

  • John Dawes

    Completely agree. NPS is terrible – but popular. Companies do it because they read other companies do it. But that’s not a good reason. NSP has numerous measurement flaws that are quite well documented (such as – misunderstanding by respondents (like they don’t get its: IF I was to happen to start a conversation about car tires, toothpaste, or banking WOULD I recommend brand X. Such conversations are rare). And it takes manager’s eye off the ball – growth does NOT happen by your loyals acting as advocates. NPS makes managers think they can grow their brand off the back of existing clients – they can’t.