Relational Net Promoter Score (NPS) is a simple and widely used measure of customer loyalty, but the score alone does not explain why loyalty changes or where an organization should act. In addition, relational NPS is particularly challenging to interpret because of its multi-causal nature. In this article, I share my personal experience of working with NPS at Hilti across multiple countries. I discuss how the business relevance of NPS can be demonstrated by linking customer loyalty to relevant business indicators. I also show how combining customer perceptions measures, CRM data and internal operational KPIs can help organizations understand what lies behind changes in NPS. Ultimately, I conclude that NPS becomes actionable when the insights team moves beyond reporting the score and acts as an internal consultant – connecting customer feedback with internal data and KPIs to explain changes in customer loyalty and identify where management attention and resources should be focused.
Making NPS actionable
Relational Net Promoter Score is one of the most widely used customer metrics. It is simple KPI, derived by asking customers one single question, it’s easy to communicate and often visible at the highest levels of an organization. Yet its simplicity can also become its limitation. An NPS score tells us whether customer loyalty appears to be moving in the right direction. It does not automatically explain why or where a problem occurred or what the organization should do next. The question is: How can NPS help the business decide where to act?
Relational and transactional NPS serve different purposes
An important starting point is to distinguish between relational and transactional NPS. Transactional NPS measures customer feedback following a particular event or interaction. Customers may be asked how likely they are to recommend a company based on a specific experience such as a recent sales consultation, delivery or repair. Because the feedback refers to a defined moment, transactional NPS is comparatively easy to interpret. The score suggests if the specific experience was positive or indicates that something in that interaction did not meet the customer’s expectations.
Relational NPS is different. It measures the customer’s overall relationship with the company and is commonly used as an indicator of customer loyalty. However, the reasons behind that loyalty are rarely straightforward. A customer’s overall assessment can be influenced by many different factors. Relational NPS is therefore a multi-causal outcome; while it provides important insights on loyalty, taking action based on it presents a challenge.
The rest of this article will therefore focus on how relational NPS can be made actionable.
Relational NPS matters – but only when linked to business outcomes
One of the key steps in making NPS actionable is gaining stakeholders’ attention by demonstrating its relevance to the business. Linking NPS to business performance helps show that NPS is not only a metric for customer loyalty, but also an indicator connected to commercial outcomes. This is particularly important for stakeholders who are responsible for the P&L.
There is no single correct way to demonstrate the commercial relevance of NPS. One option is to compare revenue development among promoters, passives and detractors. Another is to simply quantify the revenue generated by detractors and highlight it as potentially at risk. You can also compare churn, retention and cross-selling rates across NPS groups. The objective is not necessarily to identify one perfect correlation, but to show that differences in customer loyalty are associated with behaviors and outcomes that matter to the business.
Loyalty is built on several pillars
Establishing the business relevance of NPS is an important first step. The next challenge is to understand what actually drives the customer loyalty reflected in the score. Conceptually, customer loyalty can be shaped by three broad pillars:
• strong products and solutions;
• excellent customer experiences;
• a reliable and trusted brand.
When these pillars are strong, it becomes easier to gain loyal customers. When one of them weakens – for example because of product issues, service disruptions or concerns about the brand – NPS may decline, sometimes before the effect becomes visible in traditional business metrics
NPS alone is not enough
The big question is: Which specific factors within those pillars are shaping customer loyalty and where should the organization act?
To look beyond the score, we combine three analytical perspectives:
- First, 15 customer perception statements covering brand, product and service topics are included in the NPS survey to identify the factors associated with customer loyalty. Regression analysis then shows which of these perceptions have the strongest impact on NPS.
- Second, connecting the NPS results to CRM data reveals where the issue occurs. It allows to analyze NPS by customer segment, customer size, customer preferred purchase channel or service usage.
- Third, correlating NPS with internal operational KPIs helps explain what customers may actually have experienced. These KPIs can include repair experience, delivery performance or interactions with sales representatives.
The key takeaway of those analyses confirms that loyalty is earned on multiple fronts. Price and product performance, brand trust, well-executed customer experience initiatives, and great people all contribute to creating promoters and reducing detractors.
NPS as an internal consultancy tool
Demonstrating the business relevance of NPS and combining multiple perspectives – including customer perception statements asked alongside NPS, CRM data, and internal KPIs – helps explain changes in customer loyalty and identify where management should focus its attention and resources. In this context, the role of the insights team also changes. Its responsibilities are no longer limited to ensuring methodological quality and reporting results. Instead, the team evolves into an internal consultant that links customer feedback with what is happening in the business.
The discussion therefore moves beyond the question of whether the NPS score has increased or declined, and focuses on the underlying business factors that may be driving this change. These may include improvements in the customer experience resulting from specific initiatives, developments in the sales organization that affect customers’ relationships with sales representatives, brand campaigns that influence brand perceptions, or changes to the product offering and pricing that shape perceptions of the product and its value
Karol Zyskowski
Head of Brand and Customer Insights, HILTI HQ
Karol.Zyskowski@hilti.com, +41 79 654 37 66
Karol Zyskowski is Head of Brand and Customer Insights at HILTI HQ. As an expert in Customer and Market Insights, he brings 18 years of experience spanning both FMCG and B2B environments. With a background in sociology, he is deeply interested in understanding how people’s decisions are shaped. His work focuses on customer insights across the entire product lifecycle, from identifying customer needs and shaping early ideas to concept and prototype testing, product launches, communication development and in-market performance. In doing so, he connects customer data with business opportunities to support customer-centric decision-making.
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