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NPS is a buzzword but be careful not to get burnt

Jesper krogh Jørgensen | børsen Ledelse | 17 november 2017

Read the full article in Danish  

In a byline article, PA Consulting Group’s customer loyalty expert Jesper Krogh Jørgensen discusses the pitfalls that organisations must steer clear of when using Net Promoter Score (NPS) to measure customer satisfaction and loyalty.

More than two thirds of the world's 2,000 largest companies use NPS, and millions of other companies will most likely join them, as the method is attractive for benchmarking between companies. But to unleash the full potential of NPS it’s important to use it in the right way. In Jesper’s experience, companies typically succumb to five common pitfalls when they start working with NPS:

- they measure or benchmark NPS in the wrong way; 

- they only use NPS for measuring; 

- they lack a clear procedure around their NPS activities; 

- they don’t ensure all results are made relevant to all employees; or 

- they fail to turn top management into NPS role models. 

Jesper says: "If, for example, you measure or benchmark NPS incorrectly, you won’t get an accurate estimate of future profitability and growth. And you won’t know what measures must be taken to improve it. I can think of very few companies who would take the same careless approach to their key financial figures. So why should this be the case for NPS?"

Jesper goes on to discuss the importance of following up on NPS scores to establish best practice and a clear process around the NPS work. Companies must also make sure the results are made useful to all employees, encourage them to take ownership, and encourage top management to become NPS ambassadors. This might mean starting all meetings looking at their lead indicators, such as NPS and eNPS, which measure employee satisfaction, or even making NPS a part of their bonus.

Jesper Krogh Jørgensen is a customer loyalty expert at PA Consulting Group.

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