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Why NPS is like global warming

Richard HammondCo-Founder & CEO13 Dec 2019

At its best, NPS mumbles ‘There’s some smoke or something’ and then wanders off like a sulky teenager.

In 2012, Adam Alter, Associate Professor of Marketing at NYC Stern School of Business, argued that climate change, despite the scale of threat, is still a tough sell to the public because the consequences weren’t vivid enough to capture our attention.

The excellent white-paper How The Net Promoter Score (NPS) Is Like Global Warming (CCMC) by John Goodman and Scott M. Broetzmann, applies Alter’s theory to NPS, the most widely used customer analytics metric.

Goodman and Broetzmann aruge that NPS is failing to drive action because though a super-threat may be present in a business, oversimplified non-contextual numbers fail to embolden leadership to act.

In other words, a one-number metric with no context doesn’t get teams excited. It doesn’t galvanise action.

They give three possible related reasons:

  • NPS as an indicator may be too general to capture the attention and imagination of the organization.
  • NPS may not promote accountability because it’s not tied to specific phases of the customer lifecycle or individual functional areas of the organization.
  • NPS doesn’t create an economic call to action that is credible to Finance and Marketing.

Context in customer analytics

Lack of context is at the root of all three of these things, as it is for many for climate change. Sure, a lonely polar bear on a chunk of ice is sad, but unless that polar bear is about to bite your face off, the threat of climate change can remain abstract. Context is all; customer analytics metrics without the context of specific threat or specific CX opportunity is dangerously abstract.

“Hey Retailer X, your NPS is 52! Last month it was 50. Keep it up. Do you know RetailerRetailer Y’s Y's score? If you do, have you any idea to which shopper missions, and in which need-states that applies? Versus your 52? You don’t? Ah well, keep striving to move the needle anyway!”

If we’re spending money on retail performance measurement, then the results must prompt action.

This is precisely why we created the Relative Attractiveness (RA) metric. Its numbers are contextual to your competitors. Action comes from both identifying gaps and then having a logical path to follow to close those gaps. NPS doesn’t do this, it is an ‘omnibus’ metric, a number that floats out of any context but its own. In contrast, RA has competitive context baked into every number.

If we’re spending money on retail performance measurement, then the results must prompt action.

You can argue that bad scores in NPS do that and I’d agree with you, but if your NPS is that terrible then you probably have bigger issues. An individual customer’s low NPS is possibly a good indicator that something may be awry, but even then, it’s instinctive, rather than data-proven whether a single low score is symptomatic of a wider malaise. We have built RA to very specifically prompt action and to guide the direction of that action.

Finding CX treasure

At its best, NPS mumbles ‘There’s some smoke or something’ and then wanders off like a sulky teenager. Or it sends you a birthday card that reads “Here’s to a great year, opportunity is OUT THERE!” but fails to include a map to ‘there’.

It is easier to find treasure if you know where it is. RA makes multiple X marks on an actionable map. RA shouts “FIRE” and then leads you to exactly the thing that is burning so you can either put it out or cook delicious steaks on it.

Omnibus numbers such as NPS are letting you down, that’s why Relative Attractiveness had to exist and why we need to look at the impact of both metrics on your business and customers.

Originally published Dec 2019

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