3 NPS myths affecting your business

06 March 2020

Businesses use data like Net Promoter Scores (NPS) to help calculate customer satisfaction - but can it be used as a reliable tool for measuring and seeing actual business improvements?

Critics will say it’s not reliable… but we know better. If you know how to use the data correctly, there’s a strong correlation between NPS and financial performance in B2B and B2C environments. 

So let’s get to the bottom of it and bust some common myths about NPS.


Myth 1 - NPS doesn’t predict financial growth

In general, a strong NPS indicates happy, loyal customers who will repeat purchases and tell their network how great your offering is. This loyalty leads to revenue and business growth.

If a business isn’t using NPS correctly or hasn’t quite got their customer targeting right, that’s when NPS won’t perform as it should. It’s crucial for businesses to spend time collecting and actioning customer feedback. All feedback is valuable, and when used right, the data can be used to grow your customer base, turning potential customers into full-fledged, loyal customers. It’s that loyalty that helps create steady financial growth. 


Myth 2 - NPS data isn’t actionable

NPS is only as useful and actionable as you make it. In order to get useful data, you need to ensure you’re asking the right questions to the right people, at the right time. 

To do this, NPS scores need to be gathered regularly so the data can be used as part of a cycle for continuous improvements, otherwise, you could end up collecting vague and unactionable data. It’s also important not to overwhelm one group of people. Sending too frequently to the same customers results in survey fatigue, lowered response rate, and aggravated customers who might choose lower scores.

You can enhance the scores with clarifying questions that give the customer the opportunity to leave direct feedback. Their responses can be used to reveal the actionable insights that inform product or service improvements. 

For example, a poor NPS score and the clarifying question could be used to improve customer service. Following a call, the customer could be prompted to rate their experience and explain why. That answer could identify whether it’s a person, product or lack of access to information that led to the low score. From there, the customer service team can implement the necessary changes. 


Myth 3: NPS is only a metric for products

NPS can evaluate the likelihood that a customer recommends a product, but it can also be influenced by so much more than that. The purchase experience, connection with the brand, support they’ve received and perceptions around pricing, are all contributors to the score a customer gives you as well. 

Supplementing the NPS with follow up questions allows you to pin-point opportunities to improve. For example, send a follow-up email after a customer service team member has helped a customer to ask how they found the interaction. This shows the customer that you value their input, and provides an opportunity to give customer-facing teams actionable feedback. 

This data allows you to hone in on the areas of the business that are letting you down. Enhance experiences at the relevant touchpoints and keep employees accountable for their results across the customer journey. 


Myth 4: NPS is the only tool you need

NPS is first and foremost a diagnostic tool. Combining it with other metrics - like Customer Satisfaction Score or Customer Effort Score - will provide vital insight into how customers feel about interactions. This creates a clear picture of how easy or difficult customers find it to deal with your business. As a result, both Customer Satisfaction Score and Customer Effort Score are excellent tools to partner with NPS - allowing you to ‘close the loop’ on customer feedback.

With these myths about NPS bust, it’s clear that businesses can indeed rely on this data to measure business improvements. When NPS is used correctly and in conjunction with other customer insight metrics, you gain actionable data that drives financial growth and unites your entire team!


Is your business truly customer-centric? Request a demo with Customer Radar to find out.

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