What Net Promoter Doesn’t Tell You
March 31st, 2016 by John
The Net Promoter Score has often been touted by the Harvard Business Review as the one number you need to predict growth (which may or may not be true). That it’s a simple way to gather data to improve your products and processes. And while it’s true that the process is simple and the score is concrete, what does a Net Promoter Score really tell you?
If you’re new to Net Promoter Score, it basically tells you the percentage of promoters over the percentage of detractors by asking “How likely would you be to recommend this company to your family and friends?” Simple enough. But how do you affect change on that? Are they promoting you because of your great products? Amazing customer service? Great price points? Because you gave them a free t-shirt? The “ultimate question” simply cannot tell you that.
Proponents of the metric will tell you that it’s an excellent measure that forces them to keep their customers happy. And though any metrics you keep with regularity are a great idea, placing all your eggs in the NPS basket isn’t advisable – even if you’re simply trying to measure customer loyalty because it falls a little short there too.
Although we did not find a strong link between NPS and customers’ loyalty-based behaviors, we are cognizant of the fact that most managers are not drawn to NPS for its ability to predict customer behavior. Rather they are impressed by its claims about a linkage to growth.- Timothy Keiningham, Ipsos
So what is a good benchmark of progress? There are many out there that can fit the bill but it really comes down to what you’re trying to solve and what data you can use to affect change. Are you looking to increase customer satisfaction? Drive awareness of your brand? Measure a customer’s lifetime value? Conversion rates? Etc. Creating a bank of questions to benchmark your marketing efforts and your growth gives you the insight you’ll need that a single metric will fall short on.
If the metric looks simple, expect the results to be the same. If you can’t use it to affect behavior, it’s not telling you enough.