A Few Notes on Net Promoter and B2B Measurement

July 18, 2015 — Leave a comment

A few reminders about Net Promoter with B2B measurement in mind

1. Like it or not, it’s popular:

Net Promoter became popular because CEO’s believed it and could understand it, due to it’s simplicity….a reminder to all customer researchers: KISS

2. It’s supposed to be simple:

The original thinking with Net Promoter was that it was just one or two questions….would you recommend and why. Again, the simplicity of a health check on the relationship…not a complete examination.

3. It’s not about the score:

It’s about the distribution of the segments that matters:

Same Score: Two different distributions:

Chart2

Who has the better “score”? Company B has more Promoters but twice the percentage of Detractors as Company A.

My feeling is that Company A has a more mediocre distribution than Company B because of the high percentage of Passives. What would matter is the dynamic: are Passives moving toward or away from Promoters?

4. In B2B NPS, the important thing is the change in the Segments…Detractors, Passives, Promoters:

The focus shouldn’t be on whether the NPS change is significant, but rather, if you have significantly more Detractors or Promoters across the measurement period.

Also, the only real way to measure change in the NPS distribution is to measure the same people over time. (A “longitudinal sample”, as we call it)  If you’re polling a different sample in each measurement period, you are introducing too much noise (aka: sampling error) into the measurement to have much of a chance to confidently understand what’s driving the NPS changes.

5. And Finally:  NPS was developed to measure an overall, top level relationship measure…which was referred to as Loyalty.  The development of the measurement took place in the consumer marketplace (check it out in Fred’s book)

NPS makes sense with consumers…where the user is the buyer. It may be far less accurate as a loyalty measure in B2B….particularly if you are surveying business users, not decision makers.

In some cases the “likelihood to refer” just doesn’t make sense: If I am a user stuck with a product I hate, but there’s nothing I can do about it….what does “Likelihood to refer” mean in regard to my Company’s “Loyalty” to the product or the company who sold it?

golfersMaybe you can assume that eventually user dissatisfaction will “bubble up” to decision makers, but don’t count on it.

It could be the decision to buy the product was made because there was no better alternative….”better than nothing”…or maybe the CEO plays golf with the CEO.

With NPS, like any other measurement scheme, you’ve got to decide if it actually works in your business environment and be sensitive to the potential for something that does a better job of representing your overall business relationships.

 

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