If you are interested in Word of Mouth marketing, then Walter Carl’s Word-of-Mouth Communcation Study blog is a must read. Walter is a Professor of Communication at Northeastern University and an Advisory Board Member for the Word-of-Mouth Marketing Association (WOMMA). His most recent post entitled What’s the Score – More Coverage of NPS in the UK talks about the trials and tribulations of Fred Reicheld’s Net Promoter Score.
There is a big debate raging between the market research community who are pleased as punch that NPS has become the board-level issue that has raised their ship and the academic community who are concerned that something as simplistic as NPS isn’t taken too literally by senior management.
Judging by Walter’s post and a number of recent studies (in particular Morgan & do Rego and Keiningham, Cooil, Andreassen & Aksoy), the academics seem to be gaining the upper hand. It would appear that NPS isn’t anywhere near as good as its own avid net promoters say it is at predicting firm performance, company value, and shareholder value growth. Indeed, commonly used satisfaction and loyalty measures were better predictors in the studies cited. NPS is clearly a useful metric, but only a fool would throw away their balanced scorecard of measures or their value-driver metrics in favour of a single ‘ultimate metric’.
No doubt there will be a lot more discussion before the dust finally settles. This to-ing and fro-ing of opinion is no different than was experienced in the early days of service quality, customer satisfaction or more recently, customer value metrics.
In the interim, I recommend that you take a long hard look at all the drivers of value in your company and then use these insights to contruct your own scorecard of appropriate metrics.
What do you think? Is NPS the ultimate metric? Or has it been net promoted beyond its usefulness?
Post a comment and get the conversation going.
Graham Hill
