It’s Time To Talk About Net Promoter
February 2, 2010 6 Comments
The annual Net Promoter Conference is this week in New York. Unfortunately, I couldn’t attend due to some client projects. But I still want to weigh-in on Net Promoter, since I get a lot of questions on the topic.
Here are answers to some of the basic Net Promoter questions:
- What is the Net Promoter Score (NPS)? Using a survey question like “How likely are you to recommend <COMPANY> to a friend and colleague?” respondents are categorized as “Promoters,” “Detractors,” or “Passives.” The Net Promoter Score (NPS) is calculated by subtracting the percentage of Detractors from the percentage of Promoters.
- Is NPS a good thing? Yes, if used correctly. No, if used incorrectly.
- Is NPS really “The Ultimate Question?” No, it’s only one customer input of many that are needed in a Voice of the Customer (VoC) program.
- What is the biggest problem in Net Promoter programs? Companies focus on the “metric” instead of the improvement process fueled by the metric.
- What is the big change in Net Promoter? Companies have focused primarily on eliminating “Detractors” but more companies are looking at creating and empowering “Promoters.”
Here are some posts about Net Promoter (and more broadly around VoC programs) that you may want to read:
- My Closing Thoughts On Net Promoter
- “LIRM” More About Net Promoter vs. Satisfaction
- 16 Voice Of The Customer Recommendations
- Six Trends Reshape Voice Of The Customer Programs
- Fred Reichheld Gives A Net Promoter Update
- Intuit’s Brad Smith Shares Customer Experience Insights
- What Is The Perfect Customer Experience?
- Net Promoter And Satisfaction Battle For King Of The Ring
The bottom line: It’s time to start creating Promoters.
About Bruce Temkin, CCXP
Customer Experience Matters® 
Hi Bruce
A thought experiment…
Would you still be so willing to use Net Promoter if it was shown to be methodologically flawed? There is robust academic research that shows that despite its folksy appeal, Net Promoter Score is exactly that: Methodologically flawed.
See for example:
Keiningham et al, 2007, Journal of Marketing
A Longitudinal Examination of Net Promoter and
Firm Revenue Growth
http://bit.ly/9DMgYw
Morgan et al, 2006, Marketing Science
The Value of Different Customer Satisfaction and
Loyalty Metrics in Predicting Business Performance
http://bit.ly/9DMgYw
The Net Promoter Score has spawned a whole cottage industry of so-called consultants peddling its virtues to all and sundry. Many are so convinced of its value (ask yourself to whom) that they no longer have the objectivity that proper consulting requires.
So ask yourself the question. If you know something really was fundamentally flawed. Would you still be willing to recommend it to others?
Graham Hill
Customer-centric Innovator
@grahamhill
I always find it amusing how large institutions complicate the Customer Delight effort. Yes the metrics have some application in the Customer plan for a great experience.
Why dont; these people get out of their offices and visit Trader Joes and The Container store… just as two examples. Both focus on a culture of Customer Delight and my “guess” is they don;t use some of these sophisticated metrics systems.
I call this Research by Driving Around. Hmmm… what a novel thought to visit your competition….
Keep up the great work!
D
Domenick: I often encouage my clients to have some type of immersion exercise for execs to get them “out of their office.” Container Store and Trader Joes are definitely 2 great destinations!
Graham: Thanks for your comment and sorry for taking so long to get it “approved.” It actually was flagged by WordPress as “spam” for some reason and I just found it (I’ve never looked in that file before, but there were a number of other good comments that were flagged as well).
I appreciate your position on Net Promoter, and am aware of the studies you referenced. There is an almost religious battle between pro-NPS and anti-NPS folks. Hopefully it’s clear from my posts about NPS that I am in neither camp.
Although I don’t believe in the notion of a single “ulitmate question,” I’ve worked with dozens of large companies that are getting enormous value from using NPS. Whether or not the “metric” is statistically good or not, the level of alignment around customer experience behavior that it brings in those companies can be very good.
As I’ve said in the past, any organization that is creating more promoters and less detractors or more satisfied customers and less dissatisfied customers is likely heading in the right direction.
As with all research methods/approaches/paradigms, there is no one-size-fits-all solution. NPS included. I wrote about this recently myself, with respect to the telecomm sector in specific: http://www.researchrockstar.com/nps-is-not-the-de-facto-metric-for-telecomm-customer-satisfaction/
Kathryn: You’re absolutely right, there are no one-size-fits-all solutions, but companies can definitely learn from the success and failure of other companies. Thanks for leaving the link.