Flipkart chanting the ‘NPS’ mantra for success; will customers respond?

There’s one word (okay, three words) on every Flipkart employee’s lips these days – Net Promoter Score (NPS).

Few days back IOS carried a report about how the marketplace is under pressure to achieve the targets set by Binny Bansal and Kalyan Krishnamurthy before Big Billion day commences in October.

One of the three targets is to touch NPS of 55.

The etailer wants to win customers for life and NPS is its tool of choice to achieve that goal.

“The first thing we have done is we talk about real targets —they’re about Net Promoter Scores (a proxy for customer loyalty), customers we have, number of times they buy from us, how satisfied they are. The way I look at the business is that GMV is an output of all these. So the focus is now on input targets. NPS is the most important metric for the company across all teams,” said Flipkart’s CEO Binny Bansal in one of his interviews three months back.

Will it be another GMV-like obsession for Flipkart?

For a long time, Flipkart and few other marketplaces were busy running behind the GMV mirage. The inflated valuations of Flipkart, which has been devalued 7 times this year, was a result of high GMV range given by the online marketplace.

This sudden unwavering focus on ‘customer experience’ is said to be inspired by Amazon. The American etailer has successfully managed to win customer loyalty in India and abroad, thanks to its consistent consumer-centric approach. And Flipkart is looking to replicate that.

But will obsessing over a score, a number instead of building customer loyalty organically through services (like Amazon did and is doing) give good results?

Mrigank Gutgutia, Engagement Manager at RedSeer Consulting feels,

“If look at Amazon, they talk about their obsession about customer. So, Amazon has been an NPS focused company. While that has played a role in their success, a big part of their success can be attributed to how they were able to give discounts, how they were able to give advertisements on a continuous basis etc.” 

Is NPS a true measure of an ecommerce company’s success?

Experts believe that while NPS is an effective tool to measure customer satisfaction, it may not be the ideal tool for ecommerce players. More so, when etailers decide to rely/focus only the NPS score.

“NPS is a widely accepted metric across industries, however NPS alone as the key metric may not be appropriate in E-tailing. For a market place platform, whether a customer will act as a promoter is a difficult question since many a time loyalty is at a category level only where the customer is actively recommending the platform. A platform can provide a buying experience, but, if the usage experience goes wrong, then the marketplace takes a hit,” according to Sreedhar Prasad, Partner – Management Consulting at KPMG India.

The GMV obsession didn’t pay off. Will NPS fixation turn out to be the same for Flipkart?