What Your Net Promoter Score Isn't Telling You
By Tema Frank CEO, Frank Reactions | October 23, 2016
Do you remember when you were learning to drive a car? How hard it was to concentrate on all the things you had to pay attention to at once: the speedometer, rearview mirrors, side mirrors, street signs, the cars around you, pedestrians? Throw in some rain or snow and you had moving wipers for distraction too. Then you wanted to add in some music on the radio, or, more recently, check your phone (tsk, tsk). It's overwhelming!
That same level of overwhelm is why the simple Net Promoter Score (NPS) caught on like wildfire when Fred Reichheld introduced it in 2003. He said it was the only number you'd need for your company to grow. Imagine if driving a car could be boiled down to just looking at one thing! So much easier!
The NPS, for those who aren't familiar with it, is the one-question survey you so often get asked when you've just bought something, or called customer support. It asks, on a score of 0 to 10, how likely are you to recommend our company to a friend or colleague. People giving scores of 9 or 10 are considered "promoters," 7 or 8 are neutral, and anyone giving a score below 7 is considered a "detractor." To get your NPS you simply calculate the percentage of respondents in each category, subtract the detractors from the promoters, and, voila, you've got your NPS.
We all know that executives love metrics, so of course they are tempted to rely on NPS. They measure how their company performs against others (if they can get the competition's NPS scores) and how theirs changes over time. These can be helpful tracking numbers, but they are certainly not "the only number you'll need." Fred Reichheld himself has now acknowledged that there were problems with the statistical methods used in his original work.
There are three big problems with NPS:
- It misses the "why."
- What people say and what they do can be quite different.
- It ignores that we don't consider vendors in isolation.
Why Don't You Love Me?