Casting the Net (Promoter Score)

In the eight years since Fred Reichheld’s Net Promoter Score (NPS) methodology burst onto the scene, it scaled the heights of fame only to be beset with accusations around its usefulness and authenticity.

In a recent issue of Marketing Research, I review the polarizing nature of NPS and suggest some new thinking to benefit those dealing with NPS today.  Like many new ideas, NPS had flaws in practice that were not immediately evident.  However, NPS provided benefits—like simplicity—too.  In the article, I explore NPS as we understand it now to uncover what about it works, and why, and for whom…and what about it doesn’t work, and why, and for whom.

I hope that you’ll see the value in this exploration, and find the article to be not only an overview of NPS’ virtues and shortcomings, but also an objective appraisal of what NPS really brings to the table.  In the article, I propose five steps that can help in deciding if NPS is right for you: Harnessing the very best of what NPS has to offer while providing practical direction and an approach which companies can use as a “reality check” throughout their own processes.

NPS still raises the ire of some and bolsters the faith of others.  My article does neither; it merely asks, “What next?” and proposes several answers that I hope you will find thought-provoking.

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Randy Hanson

About Randy Hanson

Randy Hanson is a vice president of the Marketing Sciences Group at Market Strategies International. He has more than 25 years of research experience executing a wide array of research, consulting and statistical responsibilities. Randy is a sought-after consultant, internally and externally, on most aspects of marketing strategy and marketing research. He is a nationally recognized expert in applications of Customer Experience Management, in particular Churn/Retention, Commitment, Loyalty and Customer Satisfaction. Randy designs, develops and implements project-specific approaches and multivariate analyses and is particularly adept at designing original solutions when textbook solutions fail. He is a Phi Beta Kappa and Magna Cum Laude graduate of the University of Missouri, where he earned a bachelor’s and master’s degree in statistics, and later an M.B.A. with a marketing emphasis. He was honored as Best Graduate Instructor in the Department of Statistics and Outstanding Marketing Student in his M.B.A. program. Randy has published several articles in industry periodicals and journals. He enjoys teaching and has delivered tutorials and speeches at leading national conferences.

2 thoughts on “Casting the Net (Promoter Score)

  1. Customer satisfaction scores for the majority of large corporations have not historically shown significant improvement. Although annual reports highlight the importance of customers (usually accompanied by glossy phoos and glowing tributes), many CEOs, when interviewed, have expressed a lack of confidence in their customer satisfaction efforts or a disregard for the programs that exist. Billions of dollars a year are spent on customer satisfaction surveys and market research, and outcomes seldom seem to result in any real changes to the business. Consider your own experiences as a consumer. When you fill in a customer satisfaction survey, do you believe that something will happen as a result?

    • Tom, you hit on a great point when you said, “. . . outcomes seldom seem to result in any REAL CHANGES to the business.” If a business can’t or won’t make real changes in the way they do business, why would we expect satisfaction scores to change either? More to the point, why bother?

      But I’m not ready to throw out the baby with the bath water. Any good small businessman knows both his customers and their needs intimately—but how do you get that same knowledge when you have hundreds or thousands of customers? With some system for customer feedback (like a survey) in place, an engaged CEO can find little problems before they become disasters; know if there is a little or a lot of room for improvement; and perhaps discover that their competitors’ scores are going up, among other things.

      So to answer your question: Do I believe something will happen as a result of filling in a survey? I do; here’s my example: If the order accuracy at my local McDonald’s is hit and miss, and enough people fill out that survey, the Regional Exec can notice it is lagging behind other stores . . . and she’ll make life pretty tough for that store manager until the problem is fixed.

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