If you include the Net Promoter Score (NPS) in your customer experience program as a valuable source of information, you may find this white paper an interesting read.
When Frederick Reichheld first introduced NPS, he claimed it to be the “one number you need to grow”, naming his paper as such. Reichheld claims that customer loyalty is the best predictor of business success, as opposed to other standard metrics such as satisfaction. The proposed index has linked loyalty with positive word-of-mouth or referrals, and it has gained widespread traction and still remains as one of the most commonly utilised measurements across a number of industries 14 years later.
NPS’s simplicity, in that it aims to easily distil complex loyalty data into one easily digestible number, is one of the main appeals of the metric. Although the idea of only needing one number in order to grow a business is attractive, criticisms of the measure are abundant and diverse.
The issues discussed throughout the literature led to three main objectives for our research. These were to determine:
- how traditional NPS segments related to behaviour,
- whether Promoters, Passives and Detractors behaved as expected in terms of motivation, and
- whether an empirically derived exploratory analysis could deliver a systematic segmentation.
The resulting white paper not only outlines our research methodology and findings in detail, but also aims to provide solutions to the long-standing issues with NPS.