While Net Promoter Score (NPS) can provide insights into customer loyalty, it is not immune to being gamed.
(1) One way that NPS can be gamed is by selectively surveying customers. For example, a company might only survey customers who have had positive experiences with their product or service, while excluding those who have had negative experiences. This can artificially inflate the company’s NPS score, making it appear more favorable than it actually is.
(2) Another way that NPS can be gamed is by manipulating the survey itself. For example, a company might phrase the NPS question in a leading or biased manner, or provide incentives for customers to give high scores. Or start from 10 (instead of 0) and also decrease the scale to 1-10 (instead of 0-10). This can also result in an artificially high NPS score.
(3) Fintech Snark Tank article ads several other reasons:
- Doesn’t explain why a customer would recommend the firm. Let’s say a bank finds out that 10% of its branches score much higher than the average on the NPS and that 10% score much lower. What has it learned? Nothing. You might argue that it provides clues as to where to dig in…but wouldn’t it be more useful to find out the root causes in the first place?
- Doesn’t take into account customer demographics. Younger consumers typically refer to products and services they like more often than older consumers do. So if a company’s NPS increases from one year to the next, was it because the firm improved its products and services and/or service delivery, or did it simply reflect an underlying change in the demographics of its customer base?
- Incentivizes undesirable behavior. One exec told me about an interaction he had picking up his car at a car dealer’s repair shop. The shop manager told him, “If there’s any reason you wouldn’t check off the ‘likely to recommend’ box on the customer satisfaction survey, please let me know before filling out the survey.” Do you want your firm’s personnel asking customers to say they’d refer the firm to friends and family—or doing the things that earn a referral?
It’s important for companies to be aware of these potential pitfalls when using NPS as a metric. One of the ways to avoid tricking – for some industries – is to implement Earned Growth Rate, which is much less prone to gamification.