What Comes After NPS Surveys?

Two-thirds of businesses utilize an NPS score. But many don’t measure it correctly

4
Sponsored Post
What Comes After NPS Surveys - CX Today News
Voice of the CustomerInsights

Published: July 24, 2024

Charlie Mitchell

In 2003, the Harvard Business Review published a study by Frederick F. Reichheld entitled: “The one number you need to grow.”

That “one number” became known as the Net Promoter Score (NPS).

20+ years later, two-thirds of the Fortune 1000 reportedly use the metric.

Why? Well, it partially goes back to all the benefits Reichheld originally reasoned.

For instance, NPS is based on a single, straightforward question about the likelihood of recommending a company to others. That makes it easy for customers to understand and respond to.

NPS also allows companies to categorize each customer as a “promoter”, “neutral”, or “detractor”, which enables targeted customer engagement and retention strategies.

Moreover, with a standard survey question, NPS paves the way for companies to compare their scores with competitors’, providing a benchmark for customer loyalty.

Thanks to such benefits, NPS quickly became a stalwart metric across the CX space and remains deeply embedded in the DNA of most customer experience operations.

Meanwhile, many alternative metrics have failed to strike such a chord with CX leaders. Remember the Net Easy Score, anyone? How about Net Emotional Value?

Indeed, over the past two decades, NPS has remained a firm favorite of customer experience teams. But should it have? Many will argue otherwise.

Why does NPS Need to Change?

Despite the many benefits of traditional NPS surveys that Reichheld highlighted in 2003, times have changed, and so too has how companies leverage the metric.

Indeed, many businesses aren’t leveraging NPS in the way that the author had first envisioned.

That’s a huge part of why NPS needs to change, alongside the emergence of new tech. After all, there are now many more ways to gauge customer loyalty than 20+ years ago.

In recognition of all this, there are three core reasons why contact centers must consider moving on from traditional NPS surveys.

  1. NPS Has Become a Target, Not a Measure

Goodhart’s Law asserts: “When a measure becomes a target, it ceases to be a good measure.”

Unfortunately, that fate has befallen NPS, with the metric provoking a culture of hitting targets instead of closely considering what is best for the customer.

That trend has led to businesses gamifying the metric, making NPS results unreliable and – ultimately – distracting CX stakeholders from what matters most.

Moreover, the more marketing teams leverage NPS to frame their companies in a positive light; the more significant this gamification problem has become.

  1. Brands Have Started to Track NPS In Different Ways

Originally, the NPS question read: “On a scale of 1-10, how likely is it that you would recommend [company X] to a friend or colleague?”

Yet, some businesses have tweaked the question to gamify NPS. So, they may ask customers how likely they are to recommend their product, customer service, or something else that CX leaders know will generate a positive score, not the business as a whole.

Also, organizations will ask the question at a specific point in the customer journey, where they know customers are most likely to give them a positive score.

In sharing these examples, Rob Wilkinson, CX Solutions Consultant at evaluagent, told CX Today: “Over time, the use of NPS surveys has become diluted.”

“It’s rare to see a standalone Net Promoter question now; it’s often bundled with other questions, which detracts from its value and can confuse customers.”

Such malpractices are widespread, to the extent that the UK’s Competition and Markets Authority (CMA) and Financial Conduct Authority (FCA) started scoring the NPS of major banks independently in 2021. Why? Because the authorities didn’t trust them to self-report their results.

  1. NPS Doesn’t Offer Prescriptive Guidance

Customer experience measurement is no longer all about a “score”. Instead, it’s becoming increasingly prescriptive and descriptive.

Take last year’s release of the Salesforce Customer Success Score. The metric pairs a score with AI-driven, clear, and actionable information to help CX leaders overcome pressing people, process, and tech pain points.

Such a score will never replace the NPS score. After all, only 21.7 percent of organizations leverage Salesforce, while NPS is ubiquitous.

Nevertheless, as companies leverage such measurements, NPS may be forced further into the sidelines and become little more than a marketing tool.

What Comes Next?

In his Harvard Business Review study, Reichheld argued that companies with higher NPS scores tend to exhibit stronger revenue growth. That logic still rings true.

Moreover, NPS has other benefits in terms of simplicity and ubiquity.

Nevertheless, ignoring the malpractices of NPS measurement, its lack of insight beyond a score, and its continued reliance on customers to answer surveys is difficult.

Recognizing this, Salesforce – and other vendors, including Genesys and NICE – have developed new measures and benchmarking systems to offer more actionable, less intrusive guidance to CX leaders.

The problem is that they’re tied to a provider. As such, these metrics will never generate the broad CX appeal that NPS achieved.

But, what if businesses could blend the benefits of both? That logic is driving the next evolution of NPS – and that’s exactly what evaluagent is striving to deliver.

evaluagent: Offering the Next-Gen NPS Score

By developing an Expected Net Promoter Score (xNPS), evaluagent introduces a new way for contact centers to calculate an NPS Score.

The solution utilizes generative AI (GenAI) to monitor customer conversations and predict how they would respond to the traditional NPS question after each interaction.

As a result, a business can not only increase the number of NPS responses it generates and build a score that better reflects its broad customer base but also guard the metric against gamification.

Moreover, when paired with the evaluagent platform, businesses can strip actionable learnings to determine what’s driving those NPS scores alongside other critical CX metrics.

That just begs the question: does the solution offer an accurate reflection of NPS?

“The results we’re seeing are promising, even though it’s still in beta,” said Wilkinson. “We’re confident in the accuracy and robustness of the scores.

“Ultimately, it’s not about being right or wrong, but about establishing a baseline to drive improvements.”

To learn more about the evaluagent xNPS solution and trial it in your contact center, visit: www.evaluagent.com/xnps-learn-more/

CCaaSGenerative AIWorkforce Optimization

Brands mentioned in this article.

Featured

Share This Post