In collaboration with one of my clients, I recently conducted an eye-opening experiment that challenged the assumptions many of us have about loyalty metrics. By comparing last year’s survey data, which used the Net Promoter Score (NPS®) to assess loyalty, with this year’s real-world customer behaviour, we uncovered some striking insights.
The Experiment
Last year, we asked customers how likely they were to recommend the company’s products or services to others, assigning them to the classic NPS categories of promoters, passives, or detractors. This year, we went a step further and surveyed last year’s promoters to see if they had actually recommended the company to someone. The results were surprising: fewer than 30% of last year’s promoters remember to have actively recommended the brand.
This gap between intent and action raises important questions about how we measure loyalty and highlights the limitations of relying solely on NPS as a metric. Some customers say they’d recommend, but only some do. Some say it, others do it. Some talk the talk, others walk the walk. Some are talkies, others are walkies.
The NPS Dilemma: Feelings vs Facts
NPS is undeniably popular. It’s simple, it taps into customer sentiment, and it’s a useful way to gauge how customers feel about a brand. However, our experiment highlighted a key distinction: while NPS effectively captures customer enthusiasm and intent, it doesn’t account for the gap between feelings and real-world actions.
While customer satisfaction is often a mathematically reliable KPI tied to tangible behaviours (like repeat purchases or complaint resolution), NPS measures intent—a feeling that doesn’t always translate into action. This insight led us to rethink how we evaluate loyalty within the organisation.
True Promoters
Is this 30% of true promoters high or low? Given that NPS was never intended to identify true promoters, how many should we expect?
We did a bit of research and I cross-checked with other clients’ data. It turned out that 30% was actually not bad considering the industry my client was in and other factors.
- Emotional connection: If the customer base is passionate about the brand (e.g. a niche community), the actual referral rate could be higher.
- Existence of referral programmes: If the company makes it easy to recommend (e.g. referral schemes, shareable links), the rate could naturally increase.
- Strength of brand reputation: Exceptionally popular companies and products with a strong presence in the public conversation will have more opportunities for customers to recommend them to others.
There’s apparently a metric for this called the Net Promoter Referral Score (NPRS) or True NPS.
A New Approach to Measuring Loyalty
In discussions with my client, we decided to broaden the way we measure customer loyalty. NPS remains valuable as an emotional barometer, but we needed to complement it with behavioural metrics. Our revised approach includes several options from which we can choose the most appropriate one(s):
- Incorporating purchase data: Analysing who buys more, how often and their average spend will identify loyal customers as those who continue to buy.
- Tracking actual recommendations: Using follow-up surveys to identify customers who have actively recommended the brand.
- Segment customers: Differentiate between emotionally loyal customers and those who are behaviourally loyal.
This richer data set allows us to take a more nuanced view of loyalty and develop strategies tailored to different customer segments.
Turning Insights into Action
The plan would then be to encourage customers to become advocates. An immediate application of this analysis is the development of a referral and incentive programme. The aim is to strengthen loyalty through personalised offers, empower promoters with referral tools and incentives, etcetera.
By aligning rewards with real-world actions, we hope to encourage real advocacy and strengthen the link between emotional and behavioural loyalty.
The Path Ahead
We’re now putting systems in place to turn these metrics into actionable strategies. By analysing purchase frequency, spending patterns and referral behaviour, we’ll get a clearer picture of who our loyal customers really are. This will allow us to create tailored campaigns and customer experiences for each segment.
Loyalty isn’t just about sentiment or enthusiasm, it’s about action. And with the right data, tools and processes, we’re transforming the way loyalty is measured, understood and acted upon.
Net Promoter®, NPS®, NPS Prism®, and the NPS-related emoticons are registered trademarks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld. Net Promoter ScoreSM and Net Promoter SystemSM are service marks of Bain & Company, Inc., NICE Systems, Inc., and Fred Reichheld.
