Six limits of the NPS®*

#2. An indicator that offers little to analyze

In its native version, the NPS®* measures customer satisfaction by associating it with the propensity of customers to recommend the brand.

While the interest of a single indicator is evident from a practical point of view, it must also be recognized that the Net Promoter Score®*, in its simplest form, needs to lend itself to an in-depth analysis of the situation.

But why is the NPS®* falling? On which subjects should actions be focused in priority?

The NPS®* approach does not answer these questions.

To find out, you need to collect more unqualified opinions to highlight satisfaction points and areas for improvement. To gain granularity, you must move away from a purely NPS®* approach.

This way, you will prioritize actions focusing on the subjects where dissatisfaction is the highest. But is this enough?

To prioritize the actions that will have a tangible impact on the performance of your establishments, you need to go even further in the process and cross-reference the satisfaction data with the transactional data. This is the meaning of a post-NPS approach. 

#3. A decorrelation between the evolution of NPS®* and that of sales

NPS®* is an indicator of brand loyalty

In the mind of its creator, a customer who says he is inclined to recommend the brand is considered a loyal customer who will come back to buy from your network.

A high NPS®*, therefore, impacts sales since it not only indicates loyalty but also plays a role in acquisition. By recommending your brand, your customer encourages his relatives and colleagues to buy in your stores.

If we follow this logic, your turnover should increase when your NPS®* increases. It should decrease when your NPS decreases.

In practice, this is a little less obvious for several reasons:

A customer who says they would recommend a brand may wait to do so.

The customer may say they would recommend a brand instead of coming back to buy from its stores.

There are many examples of stores that see their NPS®* score drop without significantly impacting their revenue. If the NPS®* variations are significant, then yes, the impact on performance will be felt sooner or later. But, if they are small, globally, working on NPS®* will be irrelevant.

In this case, a more granular and precise approach is needed. It is necessary to correlate NPS®* with store performance and, above all, to detect the areas where a higher level of satisfaction translates into increased sales.

#4. An indicator poorly understood by employees

The NPS has quickly seduced the "decision makers" of customer satisfaction. The promise of a single (or even ultimate) indicator was compelling. No more need to manipulate a whole range of KPIs to manage teams; it looked like a revolution.

On the other hand, the Net Promoter Score is not unanimously accepted by the employees, especially by the local teams.

Let's quickly go over the NPS score scale. Employees sometimes need help understanding why customers who score 6 or 7 are considered passive.

But above all, the problem lies in the use of the NPS®*. NPS®* management only sometimes makes sense to employees precisely because it is unrelated to store sales.

So, a store manager who gets hit with a problem because their NPS®* is decreasing will tend to retort that "however, customers are satisfied because they are coming back and sales are doing well". And the manager will say, "yes, but your NPS®*...".

And it's an honest dialogue of the deaf that occurs simply because the two are not talking about the same thing. This will stay the same if NPS®* and performance are not correlated.

#5. The NPS®* approach is perceived as "policing" rather than as a service to teams

The result of the previous point is that employees see the NPS®* as a surveillance tool, not a tool to improve their performance.

This view is mainly because their management evaluates them on their NPS®* level without this score necessarily reflecting the store's actual performance.

Moreover, they are told to bring it back up when the NPS®* is down. But, beyond the injunction, they are sometimes presented with ideas for actions to reverse the trend.

The crux of the problem lies in the fact that the benefits of NPS®* are impossible to materialize in employees' minds. Therefore, companies and their employees are forced to invest without knowing the expected ROI. In short, we are groping and testing, but we need a reliable and rational approach to NPS management.

#6. Difficulties in identifying concrete actions to improve NPS®*

Moving from NPS®* measurement to concrete steps to improve it remains largely a challenge for companies and their teams

More than the NPS®* is needed to identify and prioritize actions. At best, it gives a trend in customer satisfaction. But, to take action, it is necessary to detect precisely where the axes of optimization to be worked are in priority.

To identify the subjects that generate dissatisfaction, you need to investigate in greater depth and adopt an item-based approach. And even with this more granular approach, you will implement actions that will improve your NPS®* without any certainty that they will impact sales.

The pure NPS®* approach, therefore, results in risky investments without prior knowledge of the expected ROI.

In the end, managing customer satisfaction exclusively from an NPS®* perspective results in missed opportunities for growth and a lot of time wasted by the teams because they need to focus on the areas of improvement that influence the performance of the facilities.

The observation of these limitations invites retail players to move towards a post-NPS®* approach that would link customer satisfaction and revenue by correlating NPS®* data with transactional data.

This is the vision we are defending at WizVille, an approach that indicates the additional turnover to be gained by acting on each satisfaction topic.

With this new approach, prioritizing the aspects to be improved becomes natural. As a result, the time and financial resources invested are rationalized. Customers' expectations are finally addressed, and the company strengthens the mobilization of its teams, who can anticipate and measure the ROI of their efforts.

A new era of growth for these pioneering companies in the post-NPS®* period.

*  NPS is a registered trademark, and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.