NPS is crap!

Yes, in most part, NPS is crap because it does not deliver results as expected! By a quick survey, one will find that a considerable amount of home grown companies are seemingly using NPS. No, no, don't ask the CEO or GM or the Sales VP and don't even have the slightest thought of the CFO. Ask the CRM manager or perhaps the Quality manager who will tell you - "oh yes, we 'are' measuring NPS!" Sadly, they can get as far as that.

It is the hype about NPS and not so much about truly understanding the concept of what, why and how NPS is a key business strategy in improving a company's financial performance. I am only talking about homegrown companies because they may be relatively new to this concept versus the MNCs such as Dell, Amex, Philips, GE, Allianz and Apple, just to name a few. Being new to this new concept and especially being used by major MNCs around the world, many tend to jump the band wagon without first understanding the fundamentals. This is a grave concern because significant investment into this program will go to waste and cause great anxiety to the management team.  They will not get the desired outcome as expected out of NPS in addition to all the effort put to get a meaningful outcome. This causes frustration among the initial 'promoters' of such program and eventually they become detractors of NPS and in the extreme some may lose their job. Hence NPS is crap!

No! NPS is effective, not just in increasing customer retention, but its an excellent tool to transform organizational culture. If understood well, NPS can be a successful program in transforming an organization to have an outside-in approach as their core strategy in growing the business. Common pitfalls for calling NPS a crap:

- Did not understand the concept well - NPS is a management concept, while intuitive, could be tricky in implementing it because it involves the entire organization's buy-in, so they need to understand it first.
- Management buy-in - I often come across many organization who may have ISO certification but can't remember where their Quality Management System is, forget about them knowing what is in it. Similar to that, when senior management is not on board, then you can smell trouble for NPS.
- Taking action - Like any other loyalty metrics, when actions do not follow with the result, then it is as good as not having one. Why bother asking customer for feedback, when you don't want to act on it?