Net Promoter System, NPS, Customer Experience

3 undeniable reasons why you can’t make NPS work as a KPI

Written by: Kushal Dev | Co-founder, Customer Guru

One of the first few questions that organisations ask on adopting NPS is “Should we set NPS as a KPI?” While the intention is great and the company wants to ensure that the team is serious about NPS, it is equally important to ensure that the program has reached the maturity level of adopting NPS as a KPI. Do it too early and it will face a lot of resistance from the team. Do it too late and the program loses its momentum.

Here are three reasons why organisations fail when using NPS as a KPI:

Not setting the right process

The company should set the right processes and train their employees on not just how to recover detractors but also how to thank the promoters. With no defined system in place, frontline employees feels helpless, which effects their morale in dealing with unhappy customers.

An unhappy employee can never create a happy customers.

Not setting the right incentivises

If you incentivise your team only on achieving a higher NPS score. They WILL Game the system! Some traditional tricks are – surveying only satisfied customers, influencing customers for high scores in return for better service etc.

Empower and train your employees to go beyond their “Role and Responsibility”. Let them know that it is more important to solve customers’ problem than get a higher NPS.

Not using reliable data

To create the finest quality product you need to use the best raw material. Similarly if you want to get the best result from your NPS program it is important that the data you are collecting is relevant, reliable, and a close representation of the total customer base.

To successfully implement NPS as a KPI, it is important to know when to measure, how to set the right incentive for the employees, and be focused on the ultimate goal of WOWing you customers.

Reach out to me with your comments and suggestions at kushal@customerguru.in

  • Nice summary, Vivek. For more on the topic of NPS and incentives, see the article Fred Reichheld and I published on this: http://www.bain.com/publications/articles/your-best-employees-work-for-love-not-money.aspx

    • Vivek Jaiswal

      Thanks for sharing, Rob. Very informative and I completely agree that an early move to adopt NPS as a KPI generally leads to problems. It is critical to coach everyone on the importance of not getting fixated on the score itself. In my experience, using delta of overall NPS as a KPI has helped focus on improvements than just attaining a specific NPS target.

  • Kyle Lyles

    NPS has a tenuous connection to individual employees and I warn companies not to try to tie the two together. You CAN tie overall customer service KPIs back to NPS, but not individuals.

  • Cvetilena Gocheva

    Great read, especially the part when you are encouraging more companies to train their employees strive for solving customers’ problems, instead of only aiming for higher NPS. I would also add this recommendation from Vivek Jaiswal’s interview with CustomerExperience.io: ”Make it the DNA of your organization – once the decision to use NPS has been made, it should be done whole-heartedly. A skeptical half-hearted attempt is bound to fail. Start by gathering regular customer feedback and slowly start measuring company-wide performance based on the fluctuations in NPS” http://www.customerexperience.io/posts/4a7qNGyu76PfDdYjo/customer-experience-spotlight-with-vivek-jaiswal

  • Will Roche
  • Sabrina Bozek

    Great article, totally agree especially for B2B! There are a ton of metrics you can use as KPIs when collecting NPS type feedback, so we guide customers in looking at those more closely. Like the % of accounts that were silent in one wave and then consequently churned. We often see thats a far more telling data point – 4-14X more likely to churn! This also plays into the point on reliable data — just because you can calculate a high NPS, if you look at the data from an account perspective, maybe only 1 person responded. Is that an accurate representation of the customer sentiment? NOPE. We’ve written several blog posts on silent accounts, here is one if anyone is interested. http://waypointgroup.org/silence-is-deafenin/

    • Vivek Jaiswal

      Thanks for sharing your thoughts, Sabrina. I absolutely agree on your point about using reliable data. A big enough sample size is important to arrive an any statistically relevant conclusion. I hope we would get to hear more from you on our future blogs too.

  • Judy Logan

    Tying NPS to individual performance is a dubious practice, one I discourage with my clients. NPS is an important indicator, but you also need to dig deep to find out why your promotors promote and what makes your detractors unhappy.

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  • msbeai

    I personally found the NPS as a totally misleading metric, it is not related to our growth nor sales figures by any mean, people are using it just because the tremendous efforts been added to promote it as the best and the magical metric while the this is not the truth.

  • Steven Peeke

    As a KPI for an individual; when employee A gives huge false promises, but employee B explains those cannot be delivered upon, employee A gets a great NPS, but employee B gets a terrible one. Guess who gets promoted? That’s right, the liar who caused the customer service issue to begin with! Only an idiot would make NPS an individual metric.