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Net Promoter is a Great Measure, but….

May 22, 2011

The concept of the net promoter score is great (if you don’t know what it is, you can find an explanation about the tool from Satmetrix here ). The concept is simply to find out how likely something is to refer or promote your company or product.  It’s a two question survey – how likely are you to recommend us to a colleague or friend – and then, why?

The real power of the survey is in the second question – the why - because it truly helps you understand your differentiation or where you need to improve.  But, in our opinion, so many companies have distorted the process for the survey, many of the actual net-promoter scores that companies tout are completely worthless.

Here’s what has happened – as an illustrative example.  A company, say an automotive company, decides that they are going to use the net-promoter score as part of their dealer satisfaction ranking.  So they start calling customers after each service call.  The dealership, wanting to get the best possible ratings, starts telling their customers that they are going to get a call asking about their satisfaction, and then telling the customers that they would appreciate a 9 or 10 rating and that anything less than a 7 makes them look bad.

So what happens, of course the really upset customers give bad ratings, but the ones that are satisfied, give a 9 or a 10, as do the ones who are truly thrilled.  The results no longer matter in terms of net promoter – because the excellent, true promoter scores are completely diluted by the dealerships request for the 9 or 10 rating.  The car company has numbers, but they don’t really give an accurate reflection of satisfaction and cross-dealership measures are worthless because some dealers game the system and some don’t.

We’ve seen this happen with software companies and their dealers, with restaurant franchises and the list goes on.

So, if you want to use the net-promoter concept to improve your business and to truly understand who your evangelist customers are, then great, use it.  But don’t poison your results by explaining the rating scale or asking for certain scores.  And please don’t base compensation or rewards on the scores, because then the people or groups being measured will poison your results in their favor.

Dan Kraus
Written by Dan Kraus

With more than two decades of experience in sales, marketing, and go-to-market strategies, Dan Kraus has developed a deep portfolio of experiences that he now uses to help small businesses profitably grow their businesses. As an entrepreneur, Dan understands the challenges of growing a business with limited capital and human resources. As a line of business manager in larger companies such as SAP America and Great Plains Software (now part of Microsoft), his experience launching new business ventures inside reputable organizations established his reputation as a creative and effective executive that could both plan and execute within corporate confines.

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