By if-admin | January 29, 2010
Dr East and his MBA students have been researching consumer behaviour and word for mouth for 10 years.
Without serious funding they don’t have the data to prove the validity of their model conclusively, but their research indicates that the well accepted Net Promoter Score word of mouth measure for predicting growth is flawed.
NPS asks the question ‘would you recommend this brand’. Respondents are then rated 0 – 10, with 0-6 ranking as detractors, 7 and 8 passives and 9 and 10 as promoters. The NPS score is then calculated by subtracting the average of the detractors from the average of the promoters.
Dr East contends that in only measuring the volume of given word of mouth, positive versus negative without measuring received word of mouth or the impact of WOM in general, NPS misses a trick. Not to mention the fact that the people most likely to offer negative word of mouth are ex-customers who are not surveyed.
The resources of Kingston University don’t lend themselves to the level of data crunching research required to prove the validity of Dr East’s methodology. This is a shame as I think the results could be rather interesting. I’ll certainly be keeping my eyes open for a potential research partner for his department.
I’m also keen to see more thinking done around the customer experience in relation to professional services. With such a complicated purchasing relationship, can a measure as simple as NPS be effective in measuring a client/agency relationship? Can we ever hope to achieve the kind of high NPS scores enjoyed by companies such as online retailers or supermarkets that have traditionally invested heavily in how they shape their customers’ experience?
Dr East argues that there is far more positive word of mouth than negative and that negative word of mouth doesn’t necessarily have the most impact. But if I’ve taken one thing away from the talk it is that we need to be addressing past clients in addition to existing when it comes to assessing our own performance.
At the end of the day NPS may be an imperfect tool for measurement. And it may be better suited to consumer retail. But we have to start somewhere because if you can’t measure it, you can’t manage it.
- Dr Robert East: Net Promoter Score – is there a better alternative? (slideshare.net)