NPS, PMF, CES, CSAT, UES, SUS, WTF?!Net Promoter Score and the confusing world of measuring customer satisfaction
Net Promoter Score (NPS) is a customer satisfaction metric that measures the likelihood of a customer recommending a product or service to others. It is widely used in many industries and has become a popular way to measure customer satisfaction in digital products. However there’s debate on whether it is now outdated or can really present a true picture of whether your customers love your products or brand. This is important to examine because actions after analysing data can affect your bottom line. Also it might not be suitable depending upon where you’re at with your product lifecycle.
In this article, we will explore the pros and cons of NPS and provide evidence from various sources to support our findings. We’ll also offer other ways to measure customer happiness just in case these might be more suitable.
One of the significant advantages of NPS is that it is easy to understand and calculate. It provides a simple and straightforward way to measure customer satisfaction, making it a popular metric among businesses of all sizes. According to a study by Bain & Company, NPS is one of the most widely used customer experience metrics, with two-thirds of Fortune 1000 companies using it to measure customer loyalty.
Another advantage of NPS is that it can be used to benchmark customer satisfaction against competitors. By comparing NPS scores with competitors, businesses can identify areas where they need to improve to stay ahead of the competition. For example, if a business has an NPS of 50, while its competitor has an NPS of 70, the business can use this information to identify areas where they need to improve to increase customer satisfaction.
The Not So Good
While NPS has its advantages, it also has its drawbacks. One of the major criticisms of NPS is that it is not specific enough to dive deep into areas that would really measure customer satisfaction. According to a study by UserTesting, NPS falls short of being a truly accurate representation of customer satisfaction – it lacks detailed context around the ‘why’.
Another criticism of NPS is that it is not a reliable predictor of customer behavior. According to a study by Gartner, NPS scores are not a good predictor of customer loyalty or future customer actions. The study found that only 23% of customers who gave a business a high NPS score actually went on to become loyal customers.
NPS has its advantages and disadvantages when it comes to measuring customer satisfaction in product. While NPS is easy to understand and can be used to benchmark against competitors, it may not be specific enough to measure customer satisfaction or predict patterns and future behaviour. Use NPS in conjunction with other customer satisfaction metrics to gain a more comprehensive understanding of customer satisfaction or happiness. We’ll also examine the product/market fit survey at a later date which can help really focus on the product at a certain moment in time.
Remember – NPS might be ok for a blanket appraisal of your overall brand but does it work for defining how much your product alone resonates with your users? We’ll explore more of that in future posts.
Alternatives to NPS / Augmentations
Gartner value enhancement score (VES)
Focusses on the customer’s ability to use the product and also their confidence in purchasing.
Customer Effort Score (CES) How easy is it for customer to accomplish a task? Don’t take your UX for granted, things are often more confusing when launching to market.
Customer Satisfaction Score (CSAT) How happy are your customers with the product they’re using rather than thinking if they’d recommend it or not.
User Engagement Score (UES) How engaged are your users? Helps provide insights on where your UX can improve engagement.
Here’s an example of how to calculate UES using a survey with five questions:
- On a scale of 1 to 5, how often do you use [product]?
- On a scale of 1 to 5, how likely are you to recommend [product] to a friend or colleague?
- On a scale of 1 to 5, how easy is it to use [product]?
- On a scale of 1 to 5, how much value do you get from using [product]?
- On a scale of 1 to 5, how satisfied are you with [product] overall?
To calculate the UES, you can use the following formula:
UES = (Q1 + Q2 + Q3 + Q4 + Q5) / 5
Where Q1, Q2, Q3, Q4, and Q5 are the responses to each question, ranging from 1 (low) to 5 (high). The resulting score will be on a scale of 1 to 5, with higher scores indicating higher user engagement.
System Usability Scale (SUS) A standardised questionnaire measuring the perceived usability of a product.