Okay, I'll Bite

Richard Owen, CEO of Satmetrics has issued a response, of sorts, to the numerous criticisms of the Net Promoter methodology that have come from us, in a published paper by IPSOS, and from folks like Ron Shevlin, other academics, and scores of other critics. I’ve seen NPS fans in the blogosphere practically begging Fred Reichheld or someone from Satmetrics to address the criticisms point-by-point and put them to rest once and for all.

But the only defense they really offer is that a) the critics have something to gain from the attacks b) companies wouldn’t be using NPS if it didn’t work (right, because companies never do stuff that doesn’t work!), and c) NPS may not work as well as more complex and comprehensive metrics, but it’s so simple and easy that it doesn’t really need to.

I saw Fred Reichheld also has a new blog post up about how you can consider yourself a user of Net Promoter even if 1) you aren’t asking only one question 2) the question you ARE asking isn’t “the ultimate question” and 3) you are doing anything at all to increase promoters and decrease detractors.

By this definition, we are all NPS users, which I guess is his point. Though when the concept set forth in a very specific book is diluted down that much, I don’t really get the point of calling it “Net Promoter.” It’s a bit like Coke going out there and saying that you can consider yourself a Coke drinker if you’re drinking any liquid, whether or not it is sweet, carbonated, and brown.

I guess the criticism is starting to sink in a little, so they’re doing their best to bring the issue back to the idea that measuring promoters and detractors is important, no matter how you do it. But it seems like they are just changing definitions around so that anything can be considered a Net Promoter system rather than addressing the criticisms of the specific plan they have been suggesting for years now.

Here’s the bottom line: likelihood to recommend is EXTREMELY IMPORTANT, but it is NOT the only thing you need to measure. And both of these blog posts are kind of missing that key point. We all agree that people should be paying attention to word of mouth. We all agree that one positive aspect of Net Promoter is that it’s gotten a lot of companies to rally around the concept of the customer, which many were not previously doing.

But #1, promoters and detractors are not the only think you need to keep track of. That metric, no matter how you measure it (NPS or some other system) is not going to predict growth. There are just too many variables—not all products lend themselves to recommendation, not all people are the sort to talk about their experiences, etc.

And #2, NPS just isn’t the best way to measure recommending because it overstates detractor behavior and has high margins of error.

So kudos to Reichheld and Satmetrics for getting the conversation started. But it’s time to stop holding on to this notion of NPS as a brand that must be protected and defended at all costs, and start getting at what actually works. Sure, one of the things we should all be paying attention to is how many people will recommend our company or not. But that issue is not the singular issue facing companies today. Continuing to hold on to this outdated concept is going to hurt far more companies than it helps.

There is apparently a roundtable at the WOMMA Research Symposium this morning, led by Walter Carl and including representatives from both sides of the NPS debate on whether you would recommend NPS as a metric. They’re going to make the audio recording available after the event, so I’ll be interested to hear that discussion. It seems there are still very specific criticisms of NPS that have not been addressed by the practitioners who promote it.

Comments

[Ron Shevlin]

Thanks for pointing out Owens' response, Larry, and for the link. As you know, I personally have NOTHING to gain from my critiques of NPS.

Owen's arguments are so weak, they're laughable. By 2009, NPS will be just one more management fad that has come and gone.

[ImeldaMadden25]

The business loans seem to be useful for people, which are willing to ground their own organization. By the way, it is very easy to get a small business loan.

[ffxiv gil]

Here's the bottom line: the possibility is very important recommendation, but it is not the only thing you need to measure. Moreover, these blog posts are missing this key point. We all agree that people should be concerned about reputation. We all agree that a positive aspect of nets, it has been around many companies gather customer, many of whom previously no such concept.Thank you for your information,i like it.