Drawing the Line: Pros and Cons of Net Promoter Score

BY QDegreesPUBLISHED
Jan. 10, 2025

NPS is always positioned as a metric that comprehensively covers many aspects of the business but businesses often mistake it as a metric that discloses details about every business aspect. But it's not the truth because NPS is a simple metric which is also why its capabilities are limited. So, to make sure that you don't become biased about NPS, in this blog we will talk about the advantages and disadvantages of NPS to draw the line for NPS’ use in getting business insights.

Understanding the Pros and Cons of NPS

NPS is praised for its simplicity and why not, as it makes many complex things easier, lets you understand customer loyalty, and also helps you take action for what is going wrong in your organization. But there's a limit to how much you rely on NPS because if a single tool can't hold the capability to summarise everything about your business. To understand this, here are the advantages and disadvantages of NPS which will help you to know where you can use NPS and where not.

The Pros of NPS

Simplicity

The first and most important advantage of NPS is simplicity. It works so simply that from launching an NPS Survey to understanding the results, everything can be very intuitive, and may take only a few reads to understand how everything works. Moreover, with the tools SurveyCXM it becomes even easier to execute and interpret NPS. But apart from execution, nps’ creation part is simple too. It takes just a single question that too doesn't need a creative rephrase.

Calculates Loyalty

Nps is great at calculating loyalty which many other metrics may not do well. See when you have to get benefits like lower CAQ, increased profits, and better brand positioning, customer loyalty is what helps you the most. So, measuring customer loyalty is a must for so many reasons which NPS does the best? Moreover, it also helps you identify those who are on the verge of leaving your brand and cause negative Word of Mouth. Hence, you can reach out to them and make efforts to retain them.

Elevates Customer Journey

Customer journey is the journey that a customer takes while doing business with you. It has all the touch points where customers interact with your business and if you elevate their experience on these touch points it elevates their overall customer experience. With NPS, you can understand the pain points of individual touch points and solve them to make the customer experience better.

The Cons of NPS

NPS isn't Everything

The first disadvantage of NPS is that NPS isn't everything but if you think about it, nothing can be everything alone, right? So, it's the misconception that businesses often carry that NPS is everything. Moreover, the reason behind this is that NPS reflects a lot of things like customer retention, CAQ, etc. But the only thing it comprehensively tells you about is customer satisfaction and loyalty.

NPS Lacks Deeper Insights

The other problem is that NPS is a quantitative insight where it discloses numbers of people who are loyal, neutral, or dissatisfied with you. But when it comes to “why?”, NPS doesn't tell you that.

Resolving Issues with NPS: Key Strategies

1. Ask Engaging Questions

Even when NPS is a single question-based survey, the effectiveness of that question matters a lot. Sometimes, businesses complicate the questions they ask which goes opposite to the NPS's main characteristic of being simple. Moreover, the problem of not answering why, can also be solved by simply putting a follow-up question with the main question asking why you rated us the particular way.

2. Use a Good Software

An NPS software makes things a lot easier, but how? The answer is that it brings in automation and expertise. If you choose good software, you can deal with problems like putting the right follow-up questions, creating survey logic, and analyzing the results accurately.

With this automation and experience, the issues can be identified easily and you can address them promptly with solutions focused on customer needs. Clear communication with detractors about how their concerns are being resolved can rebuild trust and foster loyalty.

Read the previous blog here

Unlocking NPS Effectiveness with SurveyCXM by QDegrees

SurveyCXM by QDegrees empowers businesses to harness the true potential of NPS. This advanced platform streamlines survey creation, distribution, and analysis, enabling actionable insights. With its intuitive interface and robust analytics, SurveyCXM helps businesses identify trends, address pain points, and enhance customer loyalty. By integrating NPS into broader customer experience strategies, QDegrees ensures organizations can deliver exceptional value and foster long-term satisfaction.

A Net Promoter Score Recap

Net Promoter Score is a metric that is based on surveys. It contains a single question that asks the customers about their likelihood of promoting a brand, its product, or its service to their friends and family. With this question, the company can assess the number of promoters, passives, and detractors it has, and can also find a score between -100 to 100. The answer to this question is given with a rating between 0-10.

How to Calculate NPS?

To calculate NPS, the responses are first categorized into three categories which are promoters, passives, and detractors based on the ratings. The categories are as follows:

Promoters: Rating of 9 or 10
Passives: Ratings of 7 or 8
Detractors: Ratings from 0 to 6

Now, the percentage of promoters and detractors is calculated according to this formula: % of Promoters - % of Detractors.

This formula is to find the NPS. For instance, if the percentage of promoters is 50% and detractors are 30%, the NPS will be 20.

Final Words

Net promoter score is indeed a great metric to get insights beyond just customer satisfaction and loyalty. But you should also know about the point from which other metrics should take over NPS. In simple words, NPS can hint the future trends about customer retention, acquisition cost, etc, but to be sure about it, other metrics and proofs must intervene.

To know more get in touch with our experts here