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Guru proposes new CX metric to replace NPS - will it prove popular?

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Net Promoter Score has attracted increasing criticism of late. But CX luminary Bruce Temkin believes that there is still a strong case for a single customer experience measure. And he has proposed a new metric to replace it - the True Loyalty Measure (TLM). 

18th Nov 2022
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Bruce Temkin is one of the most respected figures in the world of customer experience management - the founder of the CXPA, a former Forrester Research VP and analyst, and currently leader of the Qualtrics XM Institute. Which is why when he recently proposed a new customer experience metric, it was not something to be dismissed as the standard CX noise that permeates the sector. 

In a lengthy post on LinkedIn, Bruce introduced the TLM - the True Loyalty Measure. And while he conceded it was no magic bullet ("No measurement provides a magic bullet") he did suggest that it could be the metric to supercede NPS, the measurement tool that has become the de facto metric for CX leaders.

So what is TLM and can it really knock NPS off its perch?

Do we really need another CX metric?

Net Promoter Score (NPS) is an enormously popular customer experience metric, with around three-quarters (73%) of CX leaders surveyed by MyCustomer using it to monitor performance according to our last study. However, it has attracted an increasing amount of criticism in recent years - with the following articles representing just a small selection of the voices on MyCustomer calling for NPS to be put out to pasture:

For his part, Bruce Temkin insists that he is no NPS-basher: "I have historically been a very moderate supporter. I never loved the measurement and the underlying pressure to over-focus on a number, but I was a fan of how some organisations were able to use it at as a catalyst for positive change.mMy views about NPS have been consistent over that time: the measurement is much, much less important than the system you put around it."

So why the volte face now?

"NPS has had a strong run and should remain in place within organisations where it continues to fuel positive behaviours," he says." However, there have always been concerns over the efficacy of the measure and the metric may have reached the end of its useful life."

To demonstrate his point, he highlights issues including NPS's 11-point scale not rendering well in a mobile environment; an increasing number of companies misusing NPS by applying it as a transactional metric; the rise of businesses 'gaming' survey design to emphasise the Promoter segmentation; and quite simply people getting tired of answering the same question that they've been seeing for the past 15 years or more. 

Despite this, Bruce believes that we needn't entirely scrap the notion of an enterprise-wide customer experience metric.

He notes: "While NPS has its flaws, there’s no denying the value that NPS has created in organisations when it has been used to catalyse change by gaining the attention of executives, driving four action loops, and embedding critical ongoing behaviors like huddles. There is still a strong case to be made for for a single customer experience measure." Enter TLM.

So what is the True Loyalty Measure?

TLM, Temkin explains, is a relationship metric, measuring the attitude that people have towards an organisation. While these kinds of metrics (of which NPS is another) aren't good for gauging particular journeys or interactions where you need more of a perception metric (which you could instead use CSAT or customer effort score for), they are good at measuring the health of an overall relationship.

Bruce explains how TLM works:

  • The question: If you had a choice, how likely would you be to do business with (your organisation)?
  • The response options: Not likely; Unsure; Somewhat likely; Very likely.
  • The calculation: TLM is calculated by adding the percentage of “Very likely” to half of the percentage of “Somewhat likely.” For instance, if 50% pick “Very likely” and 20% pick “Somewhat likely,” then the organisation’s TLM is 60%.

The way that a good metrics programme using TLM would then work is as follows:

  • Identify a core attitudinal metric (e.g. TLM) that leads to the behaviours you need to achieve the results you want.
  • Use the attitudinal metric as a leading indicator of your ability to reach your goals.
  • Track perception feedback (e.g. success, effort and emotion) across peoples journeys and prioritise your focus on improving journeys that have the most potential to improve the attitudinal metric.
  • Track perception feedback (e.g. success, effort and emotion) across peoples individual interactions and prioritise your focus on improving interactions that have the most potential to improve the journey metrics.

Will it be an improvement on NPS?

So why is TLM an improvement upon NPS? Amongst other reasons, Bruce suggests that:

  • Rather than trying to interpret what a customer means based on their answer on a scaled response question, TLM gets them to directly choose how they feel using a Likert scale.
  • The segmentation is very easy to explain, as labels can be introduced for each of the four types of respondents, i.e.: Advocates (“Very Likely”), Supporters (“Somewhat likely”), Neutrals (“Unsure”), Defectors (“Not likely”).
  • The four-response design will render more effectively in mobile.
  • TLM's approach tests the loyalty attitudes of people without having to decipher what “likely to recommend” means for environments like governments where there is no choice.

While Bruce concedes that there are an increasing number of ways of gathering insights from customer interactions that are superior to surveys, such as text/speech analytics and predictive analytics, he stresses that these tend to be at the interaction and journey levels, rather than the relationship level. 

He concludes: "While it may appear to be a bit incremental to discuss replacing NPS with TLM (just another three letter acronym), there’s a long runway ahead for organisations to be using a core attitudinal metric. It remains one of the key elements for aligning an organisation’s efforts. And NPS is sufficiently flawed to make it worth the while to change direction."

With TLM arguably superior to NPS in both question and scale - as well as being a fully open-sourced measurement with no copyright ot trademark on the concept - Bruce believes he has potentially trumped NPS. 

The question now, is whether CX leaders will feel the same. 

 

 

Replies (2)

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By wimrampenlivework
21st Nov 2022 09:46

I think it is clear that CX as a discipline is struggling. With introducing this new metric on HBR earlier this year Bain has acknowledged that its metric & system, NPS, has failed to deliver the customer-centric culture it wanted. They also recognize that linking NPS to business performance is not as clear-cut as they have led the world to believe.

In turn, McKinsey states, based on research, that only 6 percent of the leaders in organisations are confident that their measurement system enables both strategic and tactical decisions.

I would argue it is safe to say that CX measurement practice is not delivering on its promises and needs a redesign. I am not sure the new metric/measurement will solve the challenges there are. I also have suggested a better way to measure service performance over here on my LinkedIn: https://www.linkedin.com/posts/wimrampen_customerexperience-servicedesig...

Happy to share more about it if you want.

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Steven Walden
By Steven Walden
21st Nov 2022 13:04

To be honest, the question for me is why do people continue to believe in magic pills?
In my opinion, the experience the customer has/ or could have (how customers think-feel and what they do) is not something that can fit within a linear metric framework that assumes governing constraints, that is supported because its simple to understand (that's office politics not proper research).
If you want to know how to measure the experience the customer I would argue: tell me what the customer experience is, and I'll tell you what to measure.
Or if you must have something simple, use satisfaction against CTQ (critical to quality measures) of relevance to your business.
IMHO you can learn a lot from Agile frameworks such as Cynefin and narrative metrics rooted in consumer psychology such as "more stories like this, fewer stories like that". Thank you.

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