Learn how to overcome the challenges of using NPS for customer retention, and how to complement it with other metrics and feedback.

You shouldn't focus too much on the score itself and forgetting the why behind it. It’s easy to get excited about a high score, but if you’re not digging into the feedback and taking action, you’re missing the point. Another challenge is that NPS can sometimes give you a limited view. It doesn’t always capture the full customer experience, and not all customers take the time to respond. So, relying solely on NPS without considering other metrics, like churn rate or customer health, can leave you with blind spots. The trick? Use NPS as a starting point, but combine it with other insights to get the full picture—and never stop listening to your customers!

Last updated on Sep 18, 2024

What are the common pitfalls and challenges of using NPS for customer retention?

NPS, or Net Promoter Score, is a popular metric that measures how likely your customers are to recommend your product or service to others. It can help you gauge customer satisfaction, loyalty, and retention. However, using NPS alone is not enough to ensure that you keep your customers happy and engaged. In this article, we will explore some of the common pitfalls and challenges of using NPS for customer retention, and how to overcome them.

1 NPS is not a magic number

One of the biggest mistakes that you can make with NPS is to treat it as a magic number that tells you everything you need to know about your customers. NPS is a simple and easy-to-calculate metric, but it does not capture the nuances and complexities of customer behavior and preferences. NPS can vary depending on factors such as timing, context, sample size, and industry. Moreover, NPS does not tell you why your customers are promoters, passives, or detractors, or what you can do to improve their experience. Therefore, you need to complement NPS with other metrics and qualitative feedback to get a more holistic and actionable picture of your customer retention.

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Margo Barysheva

Senior Customer Success | Top 100 Customer Success Strategists
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You shouldn't focus too much on the score itself and forgetting the why behind it. It’s easy to get excited about a high score, but if you’re not digging into the feedback and taking action, you’re missing the point. Another challenge is that NPS can sometimes give you a limited view. It doesn’t always capture the full customer experience, and not all customers take the time to respond. So, relying solely on NPS without considering other metrics, like churn rate or customer health, can leave you with blind spots. The trick? Use NPS as a starting point, but combine it with other insights to get the full picture—and never stop listening to your customers!

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Marley Wagner

Digital Customer Success | Customer Marketing | Top 100 Customer Success Strategist | 2x Customer Success Thought Leader Watchlist
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NPS should be one of many engagement measures, not the end-all be-all. It should be measured regularly alongside Customer Satisfaction (CSAT) score, Customer Effort Score (CES), as well as more open-ended survey questions that can get to the root of the "why" behind any of these numbers. Without the combination of objective and subjective measurement from a number of different perspectives, your ability to make changes to impact your customers' opinions is severely limited.

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Yana Myaskovskaya

Chief of Staff @ Leadership Institute | Salesforce Certified
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Additionally, NPS may not provide broader business insights for your clients, which you should foster through relationship-building and market and industry knowledge. You may have a customer that consistently acts as a promoter, but larger economic variables may impact the retention relationship. As an example, an Enterprise eCommerce client may have successfully rolled out your configuration software, but an unexpected bankruptcy due to a drastic reduction in sales may cause churn nonetheless.

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Syed Umar

CSM@Netomi | PlotX | MoonfrogLabs | Unacademy | Rapido
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Limited Contextual Understanding (Root Cause Analyst): Lack of Insight into Reasons: NPS alone may not provide insights into the specific reasons behind a customer's score. Understanding the root causes requires additional investigation. Overemphasis on the Score (Impact/Effort Matrix): Focusing Solely on the Number: Organizations may become overly fixated on the NPS score itself, neglecting the qualitative feedback and specific customer comments that offer more nuanced insights. Inadequate Segmentation (Ansoff Matrix - Market Penetration): Treating All Responses Equally: Not segmenting customers based on demographics, behaviors, or interactions may result in a one-size-fits-all approach, missing opportunities for targeted retention

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2 NPS is not a substitute for communication

Another common pitfall of using NPS is to rely on it as a substitute for regular and meaningful communication with your customers. NPS is a useful tool to collect feedback, but it does not replace the need to engage with your customers on a deeper level. NPS can help you identify who your promoters, passives, and detractors are, but it does not tell you how to communicate with them effectively. You need to follow up with your customers after sending them an NPS survey, and use the opportunity to thank them, acknowledge their concerns, address their issues, and offer them value. You also need to communicate with your customers throughout their journey, and not just at specific touchpoints. By doing so, you can build trust, rapport, and loyalty with your customers, and increase their retention.

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Syed Umar

CSM@Netomi | PlotX | MoonfrogLabs | Unacademy | Rapido
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Survey Fatigue (Impact/Effort Matrix): Excessive Surveying: Frequent NPS surveys may lead to survey fatigue, causing customers to disengage or provide less thoughtful responses, impacting the accuracy of the data. Benchmark Dependency (Ansoff Matrix - Market Development): Overreliance on Industry Benchmarks: Relying too heavily on industry benchmarks without considering the unique aspects of your business may lead to misguided interpretations and comparisons. Incomplete Feedback Loop (Root Cause Analyst): Lack of Closed-Loop Process: Failing to establish a closed-loop process for following up with customers who provide feedback, resulting in missed opportunities to address concerns and improve satisfaction.

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3 NPS is not a one-size-fits-all solution

A third challenge of using NPS for customer retention is to recognize that it is not a one-size-fits-all solution that works for every business and every customer segment. NPS can vary widely depending on the industry, the product or service, the customer profile, and the competitive landscape. For example, a high NPS in one industry may be considered low in another, or a high NPS for one customer segment may be irrelevant for another. Therefore, you need to benchmark your NPS against your competitors, your peers, and your own historical data, and set realistic and relevant goals for your customer retention. You also need to segment your customers based on their characteristics, needs, and behaviors, and tailor your NPS surveys and follow-up actions accordingly.

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Syed Umar

CSM@Netomi | PlotX | MoonfrogLabs | Unacademy | Rapido
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Cultural and Regional Variations (Ansoff Matrix - Market Development): Cultural Differences: NPS may not account for cultural variations in how customers express satisfaction or dissatisfaction, leading to misinterpretation of scores. Inability to Predict Behavior (Impact/Effort Matrix): Limited Predictive Power: While NPS correlates with loyalty, it may not be a strong predictor of actual customer behavior, such as repeat purchases or long-term retention. Bias in Promoter Detractor Definitions: Subjective Definitions: The definitions of Promoters, Passives, and Detractors can be subjective, leading to variations in interpretation and potentially biased results.

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4 NPS is not a static measure

A fourth pitfall of using NPS for customer retention is to forget that it is not a static measure that reflects the current state of your customer relationship. NPS is a dynamic and evolving measure that can change over time, depending on how you interact with your customers and how they perceive your value proposition. NPS can also be influenced by external factors, such as market trends, customer expectations, and competitor actions. Therefore, you need to monitor your NPS regularly, and track its trends and fluctuations over time. You also need to analyze the drivers and root causes of your NPS changes, and implement continuous improvement strategies to enhance your customer retention.

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5 NPS is not a solo effort

A fifth challenge of using NPS for customer retention is to realize that it is not a solo effort that can be done by one person or one department. NPS is a cross-functional and collaborative effort that requires the involvement and alignment of all the stakeholders in your organization. NPS is not only a measure of customer satisfaction, but also a measure of employee satisfaction, product quality, service delivery, and brand reputation. Therefore, you need to share your NPS results and insights with your team members, managers, and leaders, and solicit their feedback and support. You also need to align your NPS goals and actions with your organizational vision, mission, and values, and create a culture of customer-centricity and excellence.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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What are the common pitfalls and challenges of using NPS for customer retention?

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1 NPS is not a magic number

2 NPS is not a substitute for communication

3 NPS is not a one-size-fits-all solution

4 NPS is not a static measure

5 NPS is not a solo effort

6 Here’s what else to consider

Customer Communication

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