Is Your NPS Old School or New School?

The shifts in market dynamics demand a new-school approach to customer experience management and the Net Promoter Score and methodology.
Customer Experience

When it was first introduced more than a decade ago, Net Promoter proved the tremendous value of getting customer experience right with its proven linkage to financial outcomes. Yet today, 95 percent of companies still fail to exceed customer expectations, and U.S. brands lose approximately $41 billion each year due to poor customer experience.1, 2

Why? Times have changed, and merely getting the basics of CX right simply doesn't cut it anymore. Over the past decade we've seen remarkable change in every aspect of business: Subscription-based business models steal customers from market leaders hand over fist, growth hacking companies are disrupting entire industries through improved CX, and social media promoters and detractors often overshadow million dollar marketing campaigns through word of mouth alone. At the same time, customers are more difficult to please than ever before. Empowered with more access to information and lower switching costs, customers sit in the driver's seat and push businesses to differentiate beyond price.

These shifts in market dynamics demand a new-school approach to customer experience management and the tried and true, but tired, Net Promoter Score and methodology. It's time to evolve or be overtaken by your competitors.

Relying on more than a decade of experience and learnings from the field, we recently set out to develop new tools and best practices to help companies deliver even more value to customers by driving a culture of customer centricity throughout their organizations. When we launched NPS2 in June of 2015 three core factors shaped our thinking.

Changing Market Dynamics: We needed to adjust NPS to make it fit within today's uber-connected, technologically powered business climate. Today, social media amplifies the power of peer-to-peer recommendations like never before. Moreover, a growing list of category leaders like Amazon Prime, Dollar Shave Club, and Massage Envy have proven the power of the subscription model and highlighted the need to focus on customer lifetime value. Similarly, disrupting startups like Uber and Airbnb continue to unseat long-held market leaders, mainly through the power of change.

Best Practice Learning:
Over the past decade, we learned that the most successful CX programs optimize the customer experience across the entire customer journey. Therefore, we had to look beyond measuring one transaction at a single point in time, and measure every touchpoint along the customer journey. Also, we saw the need to help break down organizational siloes to encourage broader enterprise adoption of CX programs. To do so, we made the case for integrating customer data within the broader set of business analytics, and put customer feedback into the hands of employees who can actually do something with it.

Thought Leadership:
In 2005, the network of CX experts with field experience was limited. Today, there are many remarkably talented CX thought leaders who are expanding how we think about CX and customer experience management. By partnering with industry experts like Colin Shaw, Jeanne Bliss, Joseph Jaffe, Sean Risebrow, Bill Lee, Rijn Vogelaar, Brand Biology and Temkin Group, we expanded NPS2 deeper into areas such as employee engagement, promoter activation, custom-centric leadership culture, and new ways of understanding the emotional experience customers have with a brand.

We've now laid old school NPS to rest, reimagining it as the new school of NPS2, with four essential enhancements. These include creating a new measurement framework that's customer journey-focused and relies on continuously collecting the right data from the right customers. Measuring actionable insights and disseminating specific, meaningful information to frontline, management and executive staff that can best use the information to grow the business. Moving beyond closed loops, which are transaction focused, and toward smart loops, which are focused on strategic improvements and governance. Finally, encouraging organizational adoption to guarantee that customer data is integrated into the operational rhythms of the business, including communications, sales, compensation, and goal setting. The advances in NPS2 allow companies to deliver a truly customer-centric culture and provide them with a recommended technology framework to help them achieve their goals.

I'm proud of what long-time devotees of NPS have accomplished over the past decade. They now look beyond market research and focus on a more operational, day-to-day approach to customer loyalty. However, we need to acknowledge the disruptive, transformative forces that have altered the business playing field and continue to move beyond a research-based approach to CX. CX needs to become an integrated, operational discipline.

I encourage you to take a good first step in reimagining your CX program by visiting the new Net Promoter Network and becoming a member. The Net Promoter Network is a dynamic community and content hub for finding and sharing the latest NPS and CX-related resources, best practices, and thought leadership, including all the latest on NPS2 and NPS2 certification. The community is rich with frequently updated original materials where you can stay informed, ask questions, and find solutions. If you want to become part of the new school, the new Net Promoter Network is a great place to start.

1American Express, "2014 Global Customer Service Barometer, Findings in the United States," September 2014

2Smart Customer Service, "Research: U.S. Businesses Lose $41 Billion Annually Due to Poor Customer Service," December 18, 2013