Seth Godin recently posted this blog about being manipulated. In it, he defines manipulation as "working to spread an idea or generate an action that is not in a person's long-term best interest."
It got me thinking. Are companies being manipulated into their customer metric? Specifically, are companies using Net Promoter Score (NPS) because marketers did a great job of promoting "The Ultimate Question?"
At Walker, we've been studying customer relationships for 70+ years and over the past decade, we've studied the linkage between likelihood to recommend and financial performance.
In every instance where we analyzed the relationship between Net Promoter and business performance metrics (like revenue growth, operating margin, return on equity, and valuation ratios), we found that Net Promoter is not the best metric.
Given this insight, why are companies using Net Promoter? Have they been manipulated into believing that Net Promoter is the best customer metric to predict financial performance or have they done their due diligence and proved the linkage for their customer base?
I hope the latter, but I suspect the former. What say you?
Photo credit: Gospel Balloons