Senior Director, Analyst Gartner
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How to convince company leaders to ditch NPS in customer service

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Gartner predicts more than 75% of organisations will abandon NPS as a measure of success for customer service by 2025. Here's how to build a business case to phase it out. 

15th Jun 2021
Senior Director, Analyst Gartner
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Net Promoter Score (NPS) is one of the most popular metrics used globally by companies to evaluate customer experience (CX), and its results often influence enterprises’ strategic prioritisation and financial investments and allow organisations to benchmark themselves against competitors. It is a proven measure of customer loyalty and helps identify brand-loyal customers that companies can foster into brand advocates.

However, identifying actionable insight from NPS data specific to customer service and support proves challenging for leaders. For this reason, Gartner predicts more than 75% of organisations will abandon NPS as a measure of success for customer service and support by 2025.

Leaders should build an internal case to phase out NPS from post-transaction surveys using the following rationale.

Factors beyond customer service’s control

NPS does not deliver actionable insights that are specific to customer service because a customer’s response to the NPS question is based on contributing factors that reach beyond customer service, such as the price or quality of a product. 

Customer service and support leaders responsible for Voice of the Customer (VoC) programmes capture CX metrics results with CX initiatives. These results should provide customer service and support leaders with actionable insights regarding the customer service journey’s successes and failures that are within their control.

Lack clarity for customer service reps

For customer service reps to align their actions with strategic priorities and be willing to make the effort needed to achieve customer service goals, they must understand how to achieve the goals and be motivated to do so. But NPS results fail to provide a clear understanding of the actions reps should take to positively influence the metric. As a result, reps struggle to interpret how an NPS score relates to their performance and what they need to do to improve, which creates frustration and confusion.

Alternative CX metrics, such as customer satisfaction (CSAT), customer effort score (CES) and value enhancement score (VES), help customer service organisations uncover root causes for successes and failures, which leads to improved employee experience and engagement. When reps understand how their performance makes a difference, positively impacting customer service’s ability to achieve CX and business objectives, they’re more likely to repeat positive behaviours.

Wasted time and resources

When evaluating NPS results, customer service and support leaders are expected to articulate what caused the results and what actions the organisation should take to replicate strong performance and improve poor performance. However, the lack of insight from NPS results makes this a daunting task and results in significant amounts of time and resources spent digging into verbatim feedback, customer journey information, channel performance and other data to try to identify root causes.

Customer service and support leaders waste time and resources challenging scores or removing detractors from a customer service dashboard. For example, a survey verbatim that states “the agent was great, but I am unhappy with how quickly the product broke” should be removed to avoid skewing results.

Customer service and support leaders can conduct a time study to prove to stakeholders how much time and resources are wasted by quantifying the expense required to analyse NPS. They can then compare the expense to the value realised when evaluating other CX metrics and VoC, which regularly provide actionable and specific insight. The results of this activity should demonstrate that resources are better spent actively capturing customer-service-specific CX metrics and acting on that insight.

Overall, organisations must recognise that NPS captures customers’ intentions but not their actual behaviour. As a result, an overreliance on one measurement to determine performance and loyalty is not advisable because of the risk of managing to a single number and the possibility of data manipulation to achieve desired targets.

If, however, executive leadership requires NPS to be measured, customer service and support leaders should do it in a way that meets executives’ expectations but doesn’t overvalue the importance of NPS in customer service.

 

Replies (5)

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By aki.kalliatakis1
17th Jun 2021 10:04

Great post, Deborah.

I think the crux of it all is what you say towards the end: we shouldn't be looking at customers' perceptions or their intentions, but at their behaviour. Did they come back? Do they come in more often? Is their spend higher? Are they actually recommending, or just saying they will recommend? And so on. "The road to [***] is paved with good intentions."

True loyalty is when they do the things that are desirable. I don't know what the answer is for a simple tool, but I do know that those that watch their customers' actions closely will win in the end.

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Maurice FitzGerald
By Maurice Fitzgerald
17th Jun 2021 16:05

Please allow me to exaggerate to make my point: I agree with the conclusion, but with almost none of the reasoning.

The main reasoning provided is that an NPS number does not provide sufficient information on the actions that need to be taken. I agree with that. You goes on to say Customer Effort Scores, CSAT, and Value Enhancement Scores (which I have never heard of and is presumably something Gartner sells) do not suffer from the same defect.

The defect in the reasoning should be obvious: None of the scores tell you what you should do. None. No exceptions. To find out what to do, you need to ask more questions. No matter what your metric, I would suggest that you need exactly two more questions:

1) Why? (Why did you give us this score?)
2) What could we do better?

That's it. You don't need anything else. The trend in the metric will tell you whether you are making progress.

Now, I said I supported the conclusion. The reason is that the research behind the book 'The Effortless Experience' proves that Customer Effort Score is a far better predictor of revenue than NPS for customer support businesses. NPS is a brand-level metric.

I could go on... for example by pointing out that Bain and Satmetrix did a huge amount of research together back when Fred Reichheld published his seminal HBR article. That research proved that customers did indeed tend to do what they stated as their intention. Meaning they did indeed recommend, and so on. And the brand-level metric was proven to be the best single-question metric to predict revenue trend / market share of all those tested.

I could go on... but won't for now...

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linkedin
By LinkedIn Group Member
18th Jun 2021 08:28

This comment posted by Federico Cesconi on LinkedIn:

I agree with my friend Maurice FitzGerald, if you have to abandon NPS, then you would need to have a bit more solid and strong motivations than the ones reported in the article. And I would like to point out that I personally, from a purely statistical point of view, am not a big fan of that metric. You can read several articles I've written where I point out the statistical and mathematical weakness of the NPS. But let's go in order:

1. When citing a source, it would be best to link it.
2. Do we even need a business case for phasing it out?
3. Not a proven measure of customer loyalty at all, quite the contrary!
4. It's not easy to use as a benchmark, except with methodological rigor that requires more effort than other metrics.
5. If supported by a modern Natural Language Processing solution, it is certainly a system that helps identify insights that can be used not only for customer service but also for all other areas of the firm.
6. It would be interesting to understand what concrete and statistical facts Gartner makes this prediction for 2025, I honestly didn't get it from the article, but maybe this is my limitation, sorry.
7. The NPS, the answer to the open question, provides actionable insights. If you use a methodology like aspect-based sentiment analysis then you'll be able to understand exactly what comments are attributable to customer service, and what are the drivers of satisfaction and dissatisfaction. Let's not place blame on the NPS that isn't its own. Modern NLP systems help us identify these actionable insights.
8. If the NPS results don't provide a clear understanding of the actions reps should take to positively influence the metrics then we have a governance and education problem, it's not a problem of which metrics we are using.
9. Metrics like CES or CSAT are simply more robust because they use Likert scales and apply measures of the centrality of the mean without eliminating a large amount of information as NPS does, which is a score and is calculated by reducing and eliminating information (from a scale of 11 to two simple segments)
10. It would be interesting to understand how customer service and support leaders should measure the NPS in a way that meets executive expectations but does not overstate the importance of the NPS in customer service. It's not clear to me, but maybe that's my personal limitation.

In conclusion, I am of the opinion that none of the reasons described in the article are sufficient to support Gartner's prediction. None of the reasons have syllogistic support that underlies any research. That said, yes the NPS is statistically and mathematically weak, but for none of the reasons mentioned.

https://www.linkedin.com/pulse/would-you-invest-company-reporting-175-mi...

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Steven Walden
By Steven Walden
19th Jun 2021 13:59

I suggest a review of More Stories Like this. Fewer Stories Like that (SenseMaker) and the Cynefin view.
Not everything is about root cause and attitudinal data is not the same as mechanical

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By bkling
22nd Jun 2021 14:58

I don't have a problem with NPS; used in concert with other metrics and feedback practices, it has its place. The BIG problem is that many companies have morphed NPS into a transactional feedback practice, which it is not. We use NPS and we get great, actionable feedback from it and can show and prove we've made a difference. So to me it's more about how you use the various methods and to practice them well, then you get what you're after.

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