How do you balance Net Promoter Score with other factors and criteria for innovation decisions?

Net Promoter Score (NPS) is a popular metric that measures customer loyalty and satisfaction by asking how likely they are to recommend your product or service to others. It can help you identify and improve the aspects of your value proposition that matter most to your customers. However, NPS is not the only factor or criterion that you should consider when making innovation decisions. In this article, you will learn how to balance NPS with other factors and criteria that can help you create and deliver more value for your customers and your business.

1 Why NPS matters for innovation

NPS can help you gauge the level of customer advocacy and retention that your innovation efforts generate. A high NPS indicates that your customers are happy, loyal, and willing to spread the word about your product or service. A low NPS suggests that you have room for improvement and that you may be losing customers to competitors. By tracking and analyzing your NPS over time, you can identify the drivers and detractors of customer satisfaction and loyalty, and use them as inputs for your innovation strategy and roadmap.

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2 How to measure NPS

To measure NPS, you need to ask your customers a simple question: How likely are you to recommend our product or service to a friend or colleague? The answer is given on a scale of 0 to 10, where 0 means not at all likely and 10 means extremely likely. Based on their response, you can classify your customers into three categories: promoters, passives, and detractors. Promoters are those who give a score of 9 or 10, passives are those who give a score of 7 or 8, and detractors are those who give a score of 0 to 6. To calculate your NPS, you need to subtract the percentage of detractors from the percentage of promoters. The result is a number between -100 and 100, where a positive number indicates more promoters than detractors, and a negative number indicates the opposite.

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3 What are the limitations of NPS

NPS is a useful metric, but it is important to be aware of its limitations when using it for innovation decisions. For example, NPS does not tell you why customers are satisfied or dissatisfied with your product or service; you need to ask more questions or use other feedback methods to gain further insight. Additionally, NPS does not account for the different expectations and preferences of different customer segments. It is important to segment customers and measure their NPS separately to get a more accurate picture. Lastly, NPS does not reflect the impact of your product or service on your customers' outcomes and behaviors. To measure the value delivered to customers and your business, consider metrics such as usage, retention, revenue, or profit.

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Seth Terbeek

VP, Customer Success | B2B SaaS Healthcare | Building Customer Transformation | Follow for Tips Achieving $1M+ in Efficiency Gains
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With the strategy that I’ve developed we leverage NPS as a starting point. NPS gets the conversation started and provides a great launching point to engage more deeply with your customers. In B2B it’s also important to not only segment at a customer level but also at a contact level. Most buying and renewal decisions in this space are not made by a single person. Knowing who is a promoter and who is a detractor at key levels enables you to have specific engagement strategy with each member of the team that contributes to the buying decision.

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4 How to balance NPS with other factors and criteria

NPS is not the only factor or criterion to consider when making innovation decisions. You should also take into account customer needs and problems, market trends and opportunities, and business goals and resources. To understand customer needs and problems, you should validate your assumptions and hypotheses with customer research and feedback. To leverage market trends and opportunities, you should monitor changes in customer preferences, competitor actions, technology innovations, or regulatory changes. To align with your business goals and resources, you should define and measure key performance indicators (KPIs) and objectives and key results (OKRs). Additionally, you should manage your resources such as time, money, or talent wisely and strategically. All these factors can help you create and deliver more value for your customers and your business.

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Farhana Hasan

Nonprofit Founder and CEO. Advocate for Women's Empowerment through Data Science and AI. IWF Georgia. Former Delta Air Lines.
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While NPS is a great measure of customer insight, it should only be used as a snapshot of overall satisfaction. NPS is typically followed up by different modalities of drilling down to get the actual picture. The true power lies n the follow up details.

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5 How to use NPS as an input for innovation

NPS can be a valuable input for your innovation decisions, but it should not be the only one. You should use NPS as a starting point to identify gaps and opportunities in your value proposition and features, as well as to validate and prioritize your innovation ideas and hypotheses. Additionally, NPS can be used to measure the impact of innovation experiments and prototypes on customer satisfaction and loyalty, and track changes in customer satisfaction over time. Furthermore, it can be used to collect feedback from customers and iterate or refine your innovation outcomes and processes. Ultimately, NPS should be used to inform, not dictate, your innovation journey.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you balance Net Promoter Score with other factors and criteria for innovation decisions?

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1 Why NPS matters for innovation

2 How to measure NPS

3 What are the limitations of NPS

4 How to balance NPS with other factors and criteria

5 How to use NPS as an input for innovation

6 Here’s what else to consider

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