What are the limitations of the NPS?
NPS can be a valuable tool for companies looking to improve loyalty. However, there are a few things to keep in mind when using NPS as a measure of customer satisfaction. Accordingly, Gartner predicts that by 2025, more than 75% of organizations will abandon NPS as a measure of customer service success.
Here are five reasons why NPS may not be as valuable as it once was
Disadvantage 1: NPS takes into account factors outside customer service
The NPS does not provide useful insights specifically for customer service at all, because it is your customer’s response to all factors in the customer journey. This means that your customer also includes the price or quality of a product in his assessment.
Customer service managers responsible for the Voice of the Customer (VoC) often already capture the results of CX metrics in their plans.
These results should provide them with actionable insights into the successes and failures of the customer service journey that are within their control, or else you will end up with noise on the line.
Disadvantage 2: The NPS is not clear enough for customer service agents
For your agents to align their actions with strategic priorities and be willing to put in the effort to achieve goals, they need to understand how to achieve those goals. And they must be motivated to do so.
However, the NPS does not clearly state what actions to take to positively influence it. The consequence? Agents have a hard time interpreting how the NPS is related to their performance and really have no idea what to do to improve it.
You can imagine that is very frustrating.
Other CX metrics, such as customer satisfaction (CSAT), the Customer Effort Score (CES), and the Value Enhancement Score (VES), help customer service organizations uncover the root causes of success and failure.
This in turn leads to more involvement from your agents . If your agents understand how their performance makes a difference and positively impacts the customer experience, they are more likely to repeat positive behaviors.
Disadvantage 3: The NPS wastes time and resources
When evaluating NPS results, you are expected to come up with an accountability and action plan to continue strong performance and improve poor performance.
But the NPS’s lack of insight makes this a daunting task, resulting in a significant amount of time and resources spent digging into feedback, customer journey information and channel performance.
Anything to find the root cause. A real waste of your time, because a review like ‘the agent was great, but the product broke quickly’ is actually worthless and gives a distorted picture.
Map the time spent on your NPS evaluation and compare it to other CX metrics and the VoC. You should see that you can better spend your time capturing specific CX metrics.
Disadvantage 4: The NPS is out of date
We have to admit that the NPS reflects your customers’ intentions, but not their actual behavior. That is why it is not wise to rely on one metric to measure performance and loyalty.
There is a risk that you will focus on a single number and that data will be manipulated to achieve desired goals.
However, if it is management that requires the NPS to be measured, then it is smart to do so in a way that meets the expectations of customer service managers, but also does not overstate the importance of the NPS in customer service.
Disadvantage 5: The NPS is based on a single question
NPS is based on a single question, which can often lead to inaccurate results. That’s because customers can’t accurately estimate how likely they are to recommend a company based on a single interaction.
Moreover, they may be reluctant to share their opinions if they have had a negative experience. This can lead to companies receiving incorrect results and not being able to improve their customer service accordingly.