Visiting Los Cafeteros

This post originally appeared on the blog of our partner, Satmetrix.

By: Richard Owen, CEO of Satmetrix

“The nicest thing about standards is that there are so many of them to choose from”

Andrew S. Tannenbaum

I’ve had the great pleasure to be involved with the spread of Net Promoter around the world, so it’s something of an oversight on my part that last month was my first visit to Latin America. Aside from speaking at a couple of great (no, I mean it, really great) conferences in Santiago and Bogotá the real pleasure from the trip was the enthusiastic adoption of Net Promoter customer experience management across the region. I was tempted to write a blog on Bogotá as the “best city you probably didn’t think to visit last year” or  “trips most likely to alter your pre-conceived notions” but, well, I guess I just made my point.

How about this instead? Net Promoter (I’m making a determined effort to avoid using NPS as the score just isn’t that useful on its own) has become the de facto standard for measuring customer experience and it’s becoming the de facto global standard. This deserves a moment of reflection, perhaps even pause. It’s not all good news.

Is it truly a standard? A de facto standard has achieved “a dominant position by tradition, enforcement or market dominance” (Wikipedia, italics are mine). Bain & Company estimates that 50% of the F500 has adopted NPS (just the metric), which would certainly appear to be a dominant position within large US firms. It’s hard to estimate the adoption within smaller businesses, but the most important observation in this matter is that most companies who haven’t heard about Net Promoter don’t seem to be familiar with any other specific set of metrics either. Not to say that “customer satisfaction” is not a well recognized concept, but once you get past NPS I suspect that any other specific metric is a very distant second.

Internationally, US originating business concepts tend to spread through the English speaking world first, and developed economies before developing. So adoption in Columbia shows that there has been significant internationalization of the concept. Hooray!

Well, two cheers.

As adoption of an idea, Net Promoter is a good for business. Sure, there may be better ways to measure customer loyalty and there are certainly more complicated ways. But alternative approaches have rarely caught the imagination of executive leadership to the same degree, and even the biggest critic would (begrudgingly) admit that strong executive focus on customer experience is better than a perfectly constructed data set with no interest from the C-suite.

However, if it’s a standard, it’s got more in common with a Rorschach test than ISO 9000. I used to joke with customers that I could generate just about any score they wanted for their company given control of their program, so what NPS would they like? I used to joke about it until someone wanted to take me up on the offer. But I digress… if you don’t understand the point I’m making then I’d respectfully suggest you don’t understand how NPS gets calculated.

Forget for a second the recommend question, the scale, surveys etc. Just think about the variance created by measuring different customer samples, with different timings at different “moments of truth” through different data collection mechanisms. Ozymandias should have observed that “she who controls sample strategy is king of kings” when it comes to NPS.

So the danger here is that we confuse the adoption of the idea, with the creation of a real standard for measurement. This wouldn’t matter if companies didn’t like to quote NPS in financial reports, or try to benchmark their performance against published data sets. How comfortable should CFOs be reporting a number as part of a quarterly financial report? Short of trends  – “we are seeing an improvement from x to y” – I’d suggest pretty uncomfortable. Now this isn’t just a purists point of view, there could be a real cost to this issue. Companies who take their cues from their competitors public relations version of NPS will chase ghost scores; others may be embarrassed by their own disclosures. You could argue that anyone so thoughtless in their use of data has earned the embarrassment, but it creates more companies in the market chalking up customer experience management failures to the hammer not the carpenter.

So let’s celebrate the global growth of Net Promoter as an ideology, a methodology or even a business revolution. But not a standard, not yet.