Chapter 3

NPS—Fundamentally Flawed

It is easy to assume that anything called a metric has real validity—especially if that metric receives widespread corporate and media attention, despite having a number of flaws, some of which are immediately apparent and some of which become more visible as it becomes more widespread. But just because people call it a metric doesn't mean it is accurate, reliable, precise, credible, predictive, or actionable.

The appeal of tracking a simple, single metric is understandable. In many ways I understand where John, the CEO I talked to at our user summit, is coming from when he said he loves how easy it is and doesn't really care if it's exact, as long as it is directionally accurate.

It does sound simple. It does sound easy. The idea behind the Net Promoter concept makes sense. Word of mouth, whether positive, negative, or nonexistent, is a crucial business metric and should absolutely be measured. But as a management tool, NPS just does not work.

How do I know? Overwhelming evidence.

Since 2001, ForeSee has collected over 100 million online customer satisfaction surveys that measure “likelihood to recommend.” In fact, our research on word-of-mouth recommendations precedes the introduction of the NPS concept. We also do dozens of original research projects every year studying the customer experience with top retailers, financial institutions, government agencies, auto companies, nonprofits, and more. These surveys have long included additional questions ...

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