The Net Promoter Score’s Lovers and Haters

How high-end home brands can benefit from NPS

It’s good to ask your customers for feedback, and even better if you can do it simply and quickly.

That’s why the Net Promoter Score (NPS) has been a popular metric for the past 15+ years. Unlike conventional customer satisfaction surveys, NPS focuses on the likelihood that a customer would recommend your company to a friend or colleague. According to the team at Bain who built NPS, “high scores on this question correlated strongly with repurchases, referrals, and other actions that contribute to a company’s growth.” Bain also found that Net Promoter leaders typically grew at more than twice the rate of competitors.

The ability to foresee the likelihood of repurchase and referral can be a handy KPI for marketers of high-end home brands. Many of our clients have used NPS as a part of a wider dashboard to track marketing effectiveness. Today, you can even measure Net Promoter Scores through platforms such as Survey Monkey.

I’m a believer, but with a few caveats. For starters, NPS was never designed to be a Holy Grail. As we tell our clients, it is a great tool that can measure how we are doing, while also having predictive qualities. But it’s not a panacea – and it should always be a part of a larger suite of metrics that marketers track.

The Wall Street Journal recently wrote a piece titled, “The Dubious Management Fad Sweeping Corporate America,” suggesting that NPS has been “oversold” and questioning the science behind it. The piece provides examples of companies tying compensation to NPS, evangelizing scores in proxy filings and analyst calls, and justifying acquisitions, in part, based on scores.

“A big challenge with the methodology is that organizations tend to focus on the metric as the objective instead of gaining the insight to learn and act on to improve the customer experience,” said former Intuit CEO Steve Bennett, in the WSJ piece. “When organizations manage to the metric, they find ways to game the system.”

Yet despite the criticism in some corners, I believe that NPS can be a valuable part of a toolbox for a high-end brand marketer. The trick is to avoid becoming a slave to it, and like any metric, to use it along with other key performance metrics to guide your efforts.