The current retail recession being experienced by brands across the country is a tipping point forcing many businesses to rethink the value of Net Promotor Scores (NPS) as a meaningful system for improving customer acquisition, retention and driving overall business growth.

While some 75 percent of ASX listed businesses currently use NPS to inform decision making, many businesses are looking to lesser known but stronger commercially linked alternatives as NPS has not lived up to the hype.

Fifth Dimension’s groundbreaking Trust Matrix  centres on the premise that trust in brands has its foundations laid in two traits – the capability of the brand to do what it promises and the character of the brand to operate in an honest and ethical manner. Fail on both trust traits and brands risk losing a customer they have let down for life and weakening brand growth due to the legacy of a proven poor reputation.

Our Fifth Dimension Trust Matrix is one of the leading alternatives to NPS because it has been proven to predict customer value and loyalty. Changing the business metric is a big call, but if an alternative metric has a stronger relationship to customer loyalty and financial outcomes then the move is typically embraced.

While businesses utilising NPS are fundamentally structured to calibrate operations based on its methodology and measurements, improving an NPS score is proving more challenging, particularly in light of rapidly changing consumer behaviour. 

The good news is it can be done and we are helping organisations to achieve this outcome, but many are also choosing to ditch NPS.

The pandemic has disrupted much of what we know about the behaviour of consumers. Combine this with the emergence of Gen Z and millennials as the fastest growing shopper cohort who value loyalty the least and craftily utilise technology to source out value, deals and influencer led brands, the relevance and value of NPS is being tested like never before.

What our work on brand trust shows is that consumers buy from the brands that best meet their needs, mostly irrespective of what they think of the reputation and integrity of the brand.

The NPS is highly influenced by brand reputation, and often NPS results can drop dramatically when there is a reputation issue, but sales can continue regardless. And vice versa, a brand can be considered to have a strong reputation and increase in NPS results, yet the overall growth of the brand can be slow or constrained to only a small segment of the population.

The Fifth Dimension Trust Matrix effectively separates commercial competitiveness from reputational strength and explains the disconnect seen between consumer metrics and financial performance. The model also shows when both are strong, brands can extract significantly greater customer value and loyalty and outgrow competitors.

The NPS was promoted as so simple and effective, you only need to ask one question to unlock all the secrets of growth. Spooner highlights that this old-fashioned approach is not enough to drive growth in a highly competitive market. For businesses currently utilising NPS, the challenge to achieve an NPS score increase, let alone maintain it, is becoming more complex.

It may be the one number you need to grow, but most organisations aren’t clear on the best way to increase their NPS score.

In our years of working with organisations that measure performance using NPS, the most common question we get is – how do we grow our NPS score?

The challenge is that it is a simple question, with a not-so-simple answer. We could just invest in improving the lowest scoring customer experience touchpoints, but that would result in a lot of wasted resources if those touchpoints don’t really matter much to customers. What we have reliably found is that there are some key areas where we do achieve success when trying to move the dial with NPS.

Top seven areas of focus when trying to increase NPS:

  1. Make sure that NPS is the right metric for you
  2. Invest in quality driver models 
  3. Do things that encourage people to talk 
  4. Your brand is more important than you think
  5. Focus on detractors first
  6. Punch above your weight
  7. Fight the battle on many fronts

We have seen NPS grow many times across our clients’ organisations, it is achievable, but you need to approach it the right way. With the right strategy, commitment, and KPIs, you can shift the dial. Many even decide to shift metric systems.

Lyndall Spooner is founder and CEO of research and consulting agency, Fifth Dimension.