Where Does NPS Work Best?

One of the questions I am asked most frequently is this: “In what kind of business does NPS have the greatest potential to improve results?” Perhaps because so many of the company examples that I use in my book and in speeches are consumer-oriented, some people wonder if NPS may be less relevant to business-to-business firms. They may presume there is less potential in B2B because the complex decision-making process for a corporate purchase makes it difficult to gather good NPS data. (For more on this topic see Dr. Laura Brooks' blog Are Non-Respondents Truly Detractors?)

In fact, NPS is highly relevant to the business-to-business sector. Many of the most enthusiastic adopters of NPS (GE, Thermo Electron, and SAP, for example) are using NPS in B2B applications—and are discovering that one of its greatest advantages is its ability to simplify complex relationships. The clarity of one question cuts through the clutter of managing a relationship that may involve many different individuals. The adoption of NPS tools in the B2B sector has been so rapid that some observers are even concluding that the primary relevance of NPS is in the B2B space.

On the other hand, don’t tell that to the CEO of one of the world’s leading consumer packaged-goods manufacturers, who joined me for lunch last week. We had been discussing his conclusion that “NPS seems simple but it really represents disruptive technology.” I had reminded him of the doubters who believe consumer packaged-goods firms already have plenty of customer feedback data, thus making NPS irrelevant. He pulled out a copy of a PowerPoint slide that his team had presented to him earlier in the week. He explained that his executive team (unaware that he had already discussed NPS with me and had read The Ultimate Question) had briefed him on the company’s progress in China, utilizing what they described as “a cutting edge tool called net promoter scores to quantify the progress of their brand versus competitors.” In one slide, he said, they had used NPS to capture the competitive situation precisely—and by contacting promoters and detractors, they were able to determine priorities for improvements.

NPS is difficult to use in certain situations. For example, in sectors where there are few alternatives (high speed internet in the town where I live) or in government services such as the IRS —or where a B2B customer might not want to recommend a key vendor for competitive reasons. But in general, it appears that NPS applies equally well to consumer packaged goods, consumer services, and B2B. Progressive leaders are even deploying NPS in education, healthcare, and non-profits. The real issue for determining the potential of NPS is not really the kind of business; it is the degree to which the leadership group is committed to holding themselves and their teams accountable for delivering good profits and true growth by ensuring their customers receive such a superior value and experience, they consistently come back for more and bring their friends and colleagues.