Net Promoter Scores are a simple way to assess customer loyalty. But the technology world is becoming more complex, and so are options for gaining customer insight.
The NPS isn't perfect, but many argue that it still has value. In fact, a recent 2013 NPS benchmark report from the Temkin Group is now in its second year, so it's not as if the NPS is going out of fashion.
NPS: A Simple Tool for Simpler Times?
Overall, companies in so-called high-touch industries like hospitality and retail have the highest NPS, Temkin Group reported. At the bottom, it's once again the usual suspects like television and Internet service providers. It's worth noting that scores across all industries were down from the 2012 report, a possible signal companies still are not getting the proper insight they need on what customers really want.
Temkin measured the NPS for 269 companies in 19 industries, and found customers younger than 25 gave the lowest scores in 18 of the 19 industries. Either people are getting cynical at a younger age or customers have become even savvier than ever — and businesses haven't caught up to their needs.
Last summer, customer analytics firm ForeSee released a report on the shortcomings of NPS, claiming that company detractors have much more leverage on the NPS than promoters. The ForeSee Word of Mouth Index found customers are readily sharing their feelings about a company on social media, a channel that didn't even exist when NPS was developed.
While NPS scores fell in every category between 2012 and 2013 in the Temkin Group survey, the parcel delivery service industry took a notable 5 point dip.
Who is the Customer?
If detractors have an outsize influence on the NPS, perhaps getting more feedback is necessary. NPS is really just a single question of how likely people are to recommend a product or service to a friend.
ForeSee recommends companies ask a follow-up question on how likely they are to discourage others from using a particular product or service.
That would help divide detractors from those are actually just neutral, despite the fact they many not recommend a product or service, ForeSee reports. The bottom line: Most companies simply aren't doing enough to get in front of customers. A customer focused company takes time and effort to understand its customers and what they want.
The NPS is a good start, and those businesses that have implemented it as a key performance indicator (KPI) have a great baseline. It's taking the next step that's so difficult. One way to convince decision makers that they should focus more on customers is to use NPS data to point out how much money could be saved by simply not spending too much time on those over represented detractors.