The Net Promoter Score is the Barack Obama of the management world.
I’ll explain: According to what I’ve read, Barack Obama has received a free pass in the press. So does NPS.
Although management observers/bloggers like Tom Peters and Joe Jaffe have lauded the methodology, few seem to look at the ROI of implementing the methodology, despite the fact that it costs hundreds of thousands of dollars (if not millions) to implement.
This is mind boggling. While CFOs shake CMOs down to calculate the ROI of every last cent of marketing spend, it’s apparently OK to spend big bucks on a consultant to set up a NPS methodology, and have employees spend countless hours collecting and analyzing results (as if that all came for free).
Well, from other things I’ve read, Barack Obama’s free pass is supposedly coming to an end. I think the same will happen to NPS.
Technorati Tags: Management, Net Promoter Score, Barack Obama
@ron … Never one to say die on NPS
OK, if Obama is ‘NPS’, then Clinton is ‘customer loyalty’ [define as you wish].
disclaimer: don’t read any political leaning here
The power of a simple clear message is not lost on the masses, and while the complexity of a mathematically correct algorithm may be ‘right’ the power of pulling the masses together with one simple message is …. well powerful.
@Colin: Thx for commenting, long time no speak. Not to offend you, but simple doesn’t make it right.
And wrong + expensive = stupid.
Ron,
Fred Reichheld created NPS to be an “open source” system unlike most companies “black box” of mystery that you pay millions for. You are confused. NPS is NOT expensive to implement. Anyone can do it.
I totally agree with Colin – one simple metric of service that can be easily used and acted upon is brilliant. It may piss off the “algorithmics” but so be it.
It wasn’t something Fred and Dr. Laura Brooks just pulled out of a hat. It was 20 years of research that led to this metric.
But thanks for continuing to give it press and keeping it alive…
I remain,
An NPS Zealot,
DW
@Denise: Since you claim that “NPS is not expensive to implement”, I would be honored to publish a guest post written by you detailing the costs and expenses incurred by three of your clients that have implemented NPS. I expect the analysis to be FULLY COSTED — that is, accounting for all the employee time required to implement the methodology, not just consulting, surveying, and reporting fees.
To be valuable, it would be helpful to quantify the BENEFITS of this investment. I expect to see quantitative benefits like additional sales, increased retention, account balance growth, and reduction in support costs. If you’d like, feel free to include any qualitative benefits the firms you’ve worked with have realized (whatever THOSE may be).
For the record, I will not be holding my breath waiting for your guest post, as: 1) I look terrible when my face turns that putrid purple color, and 2) I don’t think you can do it.
I remain,
Sane, grounded in reality, and focused on driving real and measurable bottom-line results
RS
I just like that this conversation proves how irrelevant John McCain is.
@Denise, @Ron’s Reply to Denise,
I too would be very interested in the analytical results.
Also, for anyone who is unfamiliar with NPS use this link at Wikipedia to get more info. http://en.wikipedia.org/wiki/Net_promoter_score
I read this with interest as we are currently implementing NPS in our company.
As an aside – do you usually use so many acronyms in your posts? I counted 4 in one sentence and have to say that because of this it wasn’t as easy or enjoyable to read this article as normal! Just some reader feedback
@Mrs S: Thanks for the comment. Hadn’t really thought much about the acronyms. It’s a tricky balance. I think that unconsciously I make assumptions about which acronyms people who I expect (hope) to read this will know. In addition, I’ve used the CFO, CMO, and NPS acronyms so often, that I don’t even think about spelling it out. I’ll be more conscious of this going forward.
Ron, as I run across your postings from time to time, it still amazes me that you have taken on this battle with NPS. As a marketer, how you can disagree with the concept that knowing who are your promoters (those that spread positive word of mouth) and who are your detractors (those that spread negative word of mouth) is a bad thing? That’s the fundamental principle behind NPS.
As for your claims of millions, I don’t know where you get your data, but given the simplicity it should be obvious that there is not a significant investment in measuring NPS. The investments being made are not about measuring NPS, it’s about being able to collect & distribute customer feedback to build a customer centric DNA. That’s a solid investment regardless of what metric you chose.
What do marketers spend on advertising? Investments in listening and acting on customer data are much more cost effective as it not only retains current customers, but creates an effective channel for new customer acquisition through positive word of mouth.
NPS makes all the sense in the world to me, and I WON”T spend millions implementing it. There is enormous power in simplicity in today’s world and NPS is simple for management to understand and everyone in the company to understand. That’s 80% of the battle. I WON”T spend millions measuring it either, we spend too much time in today’s world trying to measure everything down to the nth degree, except for the MAIN THING – the brand equity in the customer’s mind.
@Steve: Simple doesn’t make it right. But good luck with your efforts.