I’m not a market researcher. I don’t even play one on TV. I took only one statistics class in college, but I have been in the Enterprise Software business for 25 years, delivering business solutions to business users. This is the point of view I try to bring to this blog as well as to my interactions with Satmetrix customers and thought leaders in this industry. So I thought I would chime in on the perennial discussion about what the Net Promoter metric means in a business context. Don’t worry—this is not a statistical analysis or research paper. I am more interested in how you should embed the use of NP into a business process, similar to the blogs I have written about in the past. While the validation of the metric is important, it is its business value—owing in part to its accessibility, its motivational power, and its proven value in business contexts—that makes NP so pertinent in a business context.
I started my career as a software engineer, but later moved into sales and marketing. To me, sales is the most noble of professions (no snickering, please!). In sales, your job is to understand customers and solve their problems—in exchange for which customers give you money. It is this emphasis on problem solving that I love best about NP since it keeps organizations focused on the right things: serving customers and becoming customer-centric. Can this emphasis be bad? Some companies would have you think so, insisting that metrics should be based on complicated and mysterious analytical formulas, rather than simple questions like “Would you recommend this product to a friend?” I tend to side with Shakespeare here, who insisted that simplicity often reveals truth, despite our protestations to the contrary (“. . . that truth miscalled simplicity”), as well as with Lao-tzu, who entreated us to “embrace simplicity as a sacred child.”
But I digress. I believe the best way to achieve customer loyalty is to establish a loyalty index that everybody understands. Once you do this, setting front-line personal and organizational goals based on loyalty behavior becomes eminently achievable.
Net Promoter detractors say that the “recommend dynamic” is not the best gauge of loyalty and that companies who focus exclusively on this metric are making a mistake. This is crazy talk. To me, NP is powerful precisely because it measures the most important behavior of loyal customers—recommendations. I don’t know about you, but when I make a recommendation to a friend or colleague, I am staking my reputation on their experience. Would you recommend a bad restaurant or product to a friend? Of course not. Why would business not want to maximize this dynamic?
I also find it interesting to take a closer look at just who the NP detractors are and who the promoters are. The detractors almost all seem to be academic types, each with their own competitive methodology to promote. Their attacks are usually based on their own repurposed research (see Fred’s blog debunking this approach). However, attacking someone else’s methodology is not an ideal way to build confidence in your own. Many of these detractors do have legitimate methodologies, but they are highly complex. I think it is the simplicity of the Net Promoter Score that truly bothers them. On the other hand, the promoters, who are all business leaders, have established NP’s value for themselves over many years. Many of these companies are presenting their case studies at the Net Promoter Conference. Case closed.
Frankly, none of us could function effectively without the “recommend” dynamic in our everyday lives. We see it on TV via celebrity endorsements and in the office through the advice of our business associates. None of us would hire an employee or business partner without first checking references, and we commonly ask people what they thought of a new movie or restaurant. “How did you like it” is a common question that we pose throughout our lives. We often meet our significant others through the introduction of a mutual friend who says, “I thought you would like each other.” To me, this is the core of how we function, and business, at its heart, is about people.
Should you use Net Promoter for your business? I certainly recommend it. As Lao-tzu said, “A journey of a thousand miles must begin with a single step.” You best get started.
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