HBR: Where NPS goes wrong

[Rimbo 25974]

https://hbr.org/2019/10/where-net-promoter-score-goes-wrong

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To help clients who were struggling to understand their Net Promoter Scores, a customer agency conducted a new study that compared the NPS ratings of 2,000 consumers with answers to questions about whether they had, in fact, actively promoted brands or urged others to avoid them. The data showed that people’s behavior often didn’t line up with their NPS categorizations–suggesting that asking about actual advocacy, rather than inclination to recommend, may produce more useful data.

Thought this article was fascinating. A lot of companies are reading more into NPS than it intended, but also, even some of NPS' intentions are entirely off.

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For instance, NPS presumes that someone can’t be both a promoter and a detractor. But humans are complex and often contradictory. Our minds are always operating on multiple planes—placing facts, feelings, and experiences within contextual and subjective frameworks. An oversimplified model can ignore this natural human state. 

Indeed, our survey revealed that 52% of all people who actively discouraged others from using a brand had also actively recommended it. And across the NPS scale, we found consumers who had both actively promoted and actively criticized the same brand.

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The biggest disjuncture, however, was with detractors—a group many companies obsess over. According to their NPS ratings, 16% of consumers in the survey were detractors, yet only 4% of all the respondents had actually told others to avoid a brand. In fact, we found that detractors were seven times more likely to have either recommended a brand or said nothing at all than to have disparaged it.

Lots of good stuff in the article

[hornbri 1400]

Haha - as someone retired from a world that loooooved their NPS scores I love this. 

I have met Fred Reichheld a couple times, he is super smart and passionate. But I always hated the way companies use NPS. 

[UTGrad98 2280]

[WBT 20607]

Who are these people going around recommending things?

And who responds to these surveys to begin with?  I don't see how there isn't bias from that.

[Surly Bevo 25041]

People love to bitch but won’t do anything else beyond that   
Film at 11. 

[Incredulity 11675]

Excuse me, sir. Seeing as how the VP is such a VIP, shouldn't we keep the PC on the QT? 'Cause if it leaks to the VC he could end up MIA, and then we'd all be put on KP.

[Rimbo 25974]

 

11 hours ago, WBT said:

Who are these people going around recommending things?

And who responds to these surveys to begin with?  I don't see how there isn't bias from that.

[YGIFS 19452]

1 hour ago, Incredulity said:

Excuse me, sir. Seeing as how the VP is such a VIP, shouldn't we keep the PC on the QT? 'Cause if it leaks to the VC he could end up MIA, and then we'd all be put on KP.

In my heart sir, I know I’m funny.  

[Guest]

I am not a NPS expert. I've never worked with it, but obviously heard about it in grad school. I wasn't amazed that it was a thing as it makes sense, but I was amazed it was thought to be something groundbreaking, seemingly because some guy wrote about it in HBR. 

"Let's ask people to rate us on a scale of 1-10!" Oh my god, that's genius. 

To me it's akin to "To make more profit, we should increase prices."

[Incredulity 11675]

1 hour ago, FirstTimeCaller said:

To me it's akin to "To make more profit, we should increase prices."

I have long dreamed of being a business consultant.

churn out 1200 page documents with an executive summary of, "buy low, sell high" for $150,000 in fees.

 

 

[Guest]

Just now, Incredulity said:

I have long dreamed of being a business consultant.

churn out 1200 page documents with an executive summary of, "buy low, sell high" for $150,000 in fees.

 

 

$150K? Wait until you see what the City of Austin pays for consultants.

[Fudge Nuggets 19205]

In order to meet next year’s goals, we need to increase revenues and reduce costs.  Any questions?

[Incredulity 11675]

4 minutes ago, FirstTimeCaller said:

$150K? Wait until you see what the City of Austin pays for consultants.

always leaving money on the table.

[BabaYaga 15301]

On 2/5/2024 at 8:04 PM, BeardIP said:

I thought I’d read once that McKinsey or Bain invented NPS. 

Heard that as well - you can also manipulate answers based upon asking leading questions (among a whole list of other things), so touting higher NPS scores always cracked me up.  

[BrazilHorn 6612]

4 hours ago, BabaYaga said:

Heard that as well - you can also manipulate answers based upon asking leading questions (among a whole list of other things), so touting higher NPS scores always cracked me up.  

It’s not much different than back in the day with JD Power scores. 
Pay more for JD Power evals as company your score goes up.