Richard Owen

About Richard

  • President and CEO of Satmetrix Systems, Owen is responsible for all aspects of strategy and day-to-day operations. Prior to Satmetrix, Owen was Chairman and CEO of NASDAQ-traded AvantGo, Inc., the leading provider of Enterprise Mobility Solutions to Fortune 1000 companies. AvantGo was successfully sold to Sybase, Inc. Prior to Avantgo, Owen spent eight years at Dell Computer Corporation in various executive positions, most recently as vice president of Dell Online Worldwide.

Blog Master Notes

  • Unless numerous repondents have the same issue as posted in comments, it is not the policy for Net Promoter bloggers to respond to individual comments.

Trademark Info

  • Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.

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Comments

Timothy Keiningham

Richard --

You have every right to disagree with our findings. You do not, however, have any right to imply that the research I co-authored with esteemed academic colleagues was in any way tainted by my employment. To suggest that my co-authors and I would bias our analysis to discredit Net Promoter is ridiculous, and the highest insult to any serious scientific researcher. We did not hunt out data designed to discredit the metric, and your assertion that that is the case is unfortunate. If Net Promoter had shown itself to be a strong predictor of growth, then that is exactly what we would have reported. Finally, our research has past peer review in the most prestigious scientific journals, and won best paper awards in these journals, which is a testament to the quality of our research.

Sincerely,

Tim Keiningham

Richard Owen

Tim

First, thanks for the reply.

However heartfelt your incredulity is around my observations, it's hard to reconcile with your prior actions.

"...in our opinion... the concept of net promoters is a bad idea" which "doesn't give managers a clue as to what they should do" are comments from your book which have no basis in understanding of the methodology, and you made no attempts to clarify before you published your comments.

You are frustrated with my implication that your research is not of the highest quality, yet that is exactly the charge you level against Dr. Laura Brooks and Fred Reichheld. "Net Promoter data was positively biased in favor of NPS" is your most recent quote in the SMR, based on what facts exactly?

Finally, your assertion that peer review is the ultimate defense of independence would be more credible if such research was not - at the very least indirectly - sponsored by IPSOS a company "whose sole focus is survey-based market research" (from their website). I believe this company is your employer and uses your material as marketing positioning in its efforts to sell services around survey design! In this age, even the appearance of impropriety casts doubts on the source.

We make no bones that we have a commercial interest in NPS. Our clients and others can take that into account when reviewing our commentary and judge accordingly.

Finally, on the topic of peer review, Net Promoter enjoys peer review from the many companies who are telling their shareholders of it's value in their quarterly statements and annual reports. Clearly, its working for them. Perhaps that's the "research rooted in reality" that Ipsos refers to in their mission statement?

Richard Hamer

Richard and Tim,

I think you are both right and both wrong.

It is right to assert the value of the NPS metric. It is a well conceived question that captures an abstract concept -- "loyalty". I have found it to be predictive of intention to switch products and to be associated with perceptions of product attributes, customer service, marketing channels, price, and brand.

On the other hand, Reichheld et.al. reported that NPS is a leading indicator of future growth and profit. Nobody can replicate this result and Reichheld and Satmetrix have not answered the challenge.

I never believed that they could validly link NPS to publicly available financial information. Such financial information is "cooked" and noisy. It contains results of deferred and recognized revenues and expenses; M&A activity; and financing activity. There is no way NPS would correlate to a financial statement pulled out of public filings. It is possible that an internal operating unit's "pure" statement of income and expenses would show a relationship to NPS over time, but as far as I know, this is not what Reichheld and Satmetrix used and so Tim is right to challenge it.

Bernard Depaepe

Dear,
If I need to pick one metric that gives me some insight in the loyalty of my customers, I would go for an easy to understand, easy to collect type of metric. We all know it is not hard science, but it gives us an idea. As such NPS is meeting best the above criteria. Correlations with financials will give use better understanding how strong NPS correlates with Rev growth but such exercise needs to be done on a case by case basis, even when correlations are high in a certain industry it does not mean that in the future the correlation will remain, as markets are always changing and those dynamics can create more or less fluctations in customers behavior.

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