A client recently asked our opinion of the value of the Net Promoter Score. As with all flavor-of-the-month management technique we followed the pattern of curiosity, skepticism, and finally came to a set of beliefs regarding where NPS provides the most value – and where it does not. Our beliefs are based on our experience helping B2B enterprise clients implement and interpret NPS results.
In B2B enterprise markets the most useful aspect of the Net Promoter Score is the insights gained about the core organizational traits that drive customer perceptions. NPS is not especially useful for identifying tactical areas of improvement for most B2B enterprise vendors for two reasons. In B2B markets, NPS surveys tend to be conducted annually. Therefore, customers tend to think about their entire relationship with the vendor rather than recent transactions when providing their feedback. In addition, enterprise-scale products and services tend to have a complex set of dimensions and involve a wide range of stakeholders who can have differing opinions about different aspects of the product or service.
NPS can be a useful metric for tracking year-to-year progress or comparing performance to competitors. However, the real value comes in the open-end follow-up question that asks the customer why they gave the ratings they did. It is here where the true health of the relationship becomes evident. The power of the simple questions – how likely are you to recommend and why – is that it taps the customer’s emotional perceptions of the relationship. A useful analogy to conceptualize what the NPS provides is relationship counseling, the objective of which is to uncover the causes of the breakdowns in the relationship, not the symptoms – the problem is not that other person always takes the last piece of cake without asking, it is an overall pattern of selfishness. Even if they stop eating the cake, unless they change their overall behavior the relationship is unlikely to improve. Conversely in a good relationship it is not that the other person is funny, it is their overall disposition that provides value in the relationship.
In B2B markets NPS surveys identify the overall organizational traits (positive and negative) the drive customer perceptions of the relationship and vendor. For example, the vendor may display traits that make customers feel the vendor looks after them. Conversely the vendor may engage in activities that undermine trust. These types of broad organizations traits are driven largely by the vendor’s leadership and organizational culture.
The NPS scores and follow-up questions typically do not provide tactical recommendations for how to improve the health of customer relationships. This is actually an advantage if the vendor wants to use the result to make meaningful changes to the organization. Addressing organizational traits and behaviors that create customer distrust will pay more dividends than focusing on customer complaints about deceptive billing. The fortunate or unfortunate implication depending on your point of view is that NPS studies more often uncover issues that will require effort, resources and commitment to address rather than quick fixes. However, perhaps this isn’t so surprising; the folks at Bain developed the tool with the intention on focusing senior management’s attention what needs to be improved.