Net Promoter Score is Nothing More than Another Lagging Measure

When a whole industry emerges from a single measure, I get concerned.  The aim of Net Promoter Score) NPS is to increase the score of a lagging measure and this puts into the same category as financial and productivity measures.  The measure doesn’t tell us how to increase or indicate “what matters” to customers.

What is the NPS?  You basically ask the question “How likely is it that you would recommend our company to a friend or colleague?”  The customer responds with a score of 1-10.  A 9-10 makes you a promoter, 7-8 makes you a passive and 1-6 a detractor. Subtract the percentage of promoters from detractors and voila . . . you have an NPS score.

Of course I have found that companies have targets for their NPS.  The defacto purpose is to increase a lagging measure.  You can improve the number by firing detractor customers or improving the service.  A lot of debate about firing customers in the blogosphere, but I usually find this not to be a good idea.

Service organizations don’t need more lagging measures they need to find measures that are leading and derived from “what matters” to customers or customer purpose.  Leading measures that if improved will make customers happier and costs lower.  These measures drive NPS, financial and productivity measures.

The job in service organizations is to study your system by conducting “check” and determine what matters to customers.  Determine customer measures and design work so that there is improvement in these measures.  In the hands of workers, customer measures can be improved by experimentation with method.

A goal without a method is nonsense. – W. Edwards Deming

service organizations can not improve or achieve business cost reduction with lagging measures.  This can only be done with measures derived from customer purpose and innovation through new method.

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