Strategy+Business – August 2019

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he Net Promoter Score (NPS), which has long been used to measure

the loyalty of a company’s customers, is under fire for becoming the

false god of corporate America. In a searing article, the Wall Street Jour-

nal recently labeled NPS “a dubious metric” — one that is routinely

cited by CEOs in earn ing calls and that somehow, magi cally, never declines.

“Much of Corporate America is obsessed with NPS,” declared the article,

before going on to list many of the activities the measure is used to justify, from

employee bonuses to executive compensation.

NPS hasn’t been useless, though. We can thank it for under scoring the im-

portance of customer satisfaction ever since it was intro duced in 2003. But in

2019, execu tives should question its efficacy and seek something better and

broader. There are three big reasons why.

1. NPS misses the employee connection. NPS says nothing about employee
   experience. What good is a figure that shows how many cus tomers would recom-
   mend your company versus how many are un happy, if your employees — your
   prime ambassadors to customers — are unhappy themselves? If you’ve ever en-
   countered a surly store associ ate or a hostile customer-service rep (and I know you
   have), you intui tively get the connection between customer experience (CX) and
   em ployee experience (EX).
   True, there are plenty of com panies that also track employee en gagement
   and recognize that CX and EX regularly trend together. Yet because they’re
   tracked separately, top executives measure investments and out comes in one part
   of the business without really knowing how they drive outcomes (or don’t) in
   other parts of the business.

Three reasons Net Promoter

Score is past its prime

The metric was useful in a simpler environment, when

companies were beginning to understand the importance

of customer experience. But it’s time to replace it.

by Matt Egol