This article originally appeared on LinkedIn.
In an article published last week, the Wall Street Journal pointed out that the Net Promoter System (and its eponymous score) has become an important tool used widely by corporate managers and investors. It has improved the experiences of millions of customers. It has empowered the enthusiastic employees at Apple’s Genius Bar and helped companies like Vanguard, USAA, Delta Air Lines and American Express earn superior customer loyalty.
I am delighted that, in the 15 years since I created the framework, NPS has become the world’s de facto standard for measuring customer loyalty. More than 60% of the Fortune 1000 use “likelihood to recommend” as their keystone customer metric. But in all honesty, I am quite disappointed that few companies use NPS very well. Too many view the score as an objective in itself. I designed NPS as a way to discover, in real time, if your customer (or colleague) is feeling the love, so you can learn and improve. Making the score the objective simply leads to gaming and manipulation.
The central idea behind NPS is that employees and their organizations will prosper when they treat others right—and do so more consistently than their competitors. Love thy neighbor as thyself is a powerful idea, one that I believe is at the core of all great organizations. Great leaders put their teams in a position to enrich the lives they touch and to get the recognition and rewards this deserves. Done right, NPS helps teams test innovations and gauge progress toward this mission. What makes a job great is the meaning, purpose and fulfillment one gains through enriching the lives of others.
The Net Promoter System is a way to nurture and promote such thinking throughout an organization. Companies that use it effectively don’t stop after asking the one question required to derive a score; they always follow up by asking “why?” and “how can we improve your experience?,” enabling frontline teams to close the loop with customers directly and thereby learn and improve. The feedback encourages employees, on their own and especially in regular team huddles, to share best practices and develop a sense of ownership. By adopting such robust, rigorous and transparent processes, companies can identify and prioritize the systemic actions required to improve products, pricing and the customer experience.
Mistakes, misuses and abuses of NPS undermine confidence and thwart its real promise. As I told the WSJ, gaming the score or using it as a bonus objective for frontline teams runs counter to the spirit of NPS. (For more on this, you may want to read a piece I wrote with my Bain & Company colleague Rob Markey, “Your best employees work for love, not money.”) Employees quickly turn to begging customers for higher scores, rather than earning customers’ loyalty by learning how to brighten their lives. Anyone who has ever bought a car at a dealership is familiar with this phenomenon. If you’ve experienced it, you’ll have a good idea why, in my professional view, frontline employee compensation should almost never depend on customer feedback scores.
Instead of NPS, perhaps I should have called the system “NLE,” for Net Lives Enriched. After all, that is what NPS really measures. Of all the lives you touch, how many are enriched, how many diminished? By focusing on that question each day, you can make the world a better place—especially if you measure, test and learn.
When employees know they regularly make their customers’ lives better, they bring energy, enthusiasm and creativity to work, spurring further innovation and learning. When you have such a positive impact that a customer gives you an unqualified recommendation, saying he or she would want a loved one to have a similar experience, this is clear evidence you made someone’s life better. And that’s what it’s all about.