NPS: 

Pitfalls & Limitations

NPS is not the ‘magic’ metric you think it is.

It’s currently used by organisations for various reasons.

  •  Boards and the C-Suite find it seductively simple (a single number that’s easy to collect & report)
  •  it’s positioned as the only number to predict future growth
  •  if everyone else is using it, why not us?

But, despite its popularity, companies will benefit from exploring its pitfalls and limitations.

TOO SIMPLE

Stakeholder relationships are more complex than a single number. It’s impossible to get an accurate measure of future intentions & business outcomes with a single question. And there is still a great deal of uncertainty about what NPS actually measures.

DOESN'T MEASURE TRUST

Some companies mistakenly use NPS as a surrogate for trust. But trust is overwhelmingly driven by trustworthiness. And that is critically assessed by stakeholders across a range of factors that exclude satisfaction or advocacvy/loyalty.

LACKS PREDICTIVE POWER

Numerous studies have concluded that NPS has limited predictive power for business performance. When compared to other metrics, NPS is widely regarded as a ‘lagging’ indicator.

LIMITED CONTEXT

Without additional context, NPS does not provide insights into specific aspects of the customer or employee experience.

NO ACTIONABLE INSIGHTS

NPS does not provide specific insights into the areas of the stakeholder’s experience that requires improvement. This makes it challenging for companies to make confident decisions to target their efforts effectively.

OVEREMPHASISES PROMOTERS & DETRACTORS

NPS focuses heavily on extreme responses (promoters and detractors) by virtue of its calculation. Passives are ignored even though they may represent substanial opportunities for growth and success.

OVEREMPHASISES THE SCORE

Companies can focus too much on the NPS score itself rather than addressing the underlying issues driving the score. Using NPS in remuneration plans (STIs & LTIs) doesn’t make sense when it doesn’t provide actionable insights.

Want to Know More About NPS?

We’ve conducted extensive research into NPS over a lengthy period. We’ve also conducted interviews with senior executives to get their feedback.

Read More

Trust metrics are more important than NPS

If  you’re looking for more than a headline number that’s difficult to interpret or change, get in touch. We’ll show you why the trust metrics produced by Trustgenie are way better than NPS.

Trustgenie

Our purpose is to create certainty in stakeholder relationships