Even with the strength of the ACSI aside, the thing still causing the most concern about NPS® is the lack of statistical evidence, as Forrester’s Richard Evensen explains:
"The biggest concern with the formula is that there is not sufficient quantitative evidence to support a correlation between NPS® and customer actions (renewals or even actual recommendations). Given its time in the field, SatMetrix should be able to show 100s if not 1000s of cases with high correlation coefficients (Pearson’s r=70%+). To date, they have only provided a totally unsupported position that “findings support the link between Net Promoter and financials.” Please provide us the proofs as I have several clients who disagree with your findings!"
NPS: Winning where it counts
Given such strong evidence against the metric, why does NPS® continue to be so popular among businesses? Simplicity and culture. NPS® is a metric that makes sense. If more people are willing to recommend your business than not to recommend, then your business will grow. The statistics don’t necessarily back this up, as many professionals have taken pains to demonstrate, but it nevertheless makes logical sense. And that’s just the kind of sense that businesses like.
However a stronger argument, and one that I personally subscribe to, is that NPS® programs drive a culture of customer centricity. I’ve worked with large airlines, retailers, and software companies who live and die by NPS®. The common thread is that these companies have a strong customer-centric culture. When an employee’s bonus depends on whether the customers they interact with will recommend them, they will naturally focus on pleasing that customer. I don’t believe that NPS® is the only metric that can do this, or necessarily the best metric, but it is a metric that can influence culture.
The Bottom Line
Is there enough evidence that NPS® really is the “only number you should care about”? Absolutely not. Then again, neither are any of the other measures. However, in some industries, NPS® can be a highly effective predictor of growth. The bottom line is for companies not to get too caught up in finding the ultimate winner in this satisfaction battle and to find the measure or combination of measures that work best for you.
If you have any specific questions about how Net Promoter Score® will fit into your business feel free to get in touch.
Net Promoter, NPS®, and the NPS®-related emoticons are registered service marks, and Net Promoter Score® and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld
“Questions About NPS®—and Some Answers”