Market Researchers Are From Mars, NPS Advocates Are From Venus
Posted by Jeffrey Henning on Thu, Jun 17, 2010
Surinder Siama (@surinder) from Research Talk called me yesterday to discuss NPS, and in the course of talking with him, I said, "Market researchers are from Mars, NPS advocates are from Venus. Both could learn a lot from one another."
What Market Researchers Can Learn From NPS Advocates
- Closed-loop processes power growth. Embedding research in an operational closed-loop feedback process that drives incremental change can produce dramatic business growth.
- Surveys should be short. When you are intervening with every dissatisfied customer, you want a high response rate, so that you can identify those customers who are at risk of defecting or spreading negative word of mouth. For such purposes, you want a short survey. Many questionnaires designed by market researchers are too long and can actually dissatisfy customers.
- Employee involvement is crucial. Customer feedback needs to be customized and tailored to individual employees and managers for them to be able to learn from it and act on it. Top-down research efforts may produce strategic action, but hierarchical reports support and encourage tactical and operational action.
- Simplicity sells. A customer segmentation of Promoters, Passives and Detractors is easily understood, encouraging employee-customer engagement.
What NPS Advocates Can Learn from Market Researchers
- It's not the ultimate question. Sorry, that's a great book title, but it doesn't even reflect the book, which mentions industries for which the measure wasn't predictive (enterprise software, for instance). The customer satisfaction question and the liking question are "more ultimate" than hypothetical willingness to recommend, and other loyalty questions better predict different business outcomes. The primary question or questions driving the closed loop feedback process should be chosen based on the desired business outcome.
- Survey methodology matters. The official form for asking the question ignores extensive research on research as to which survey scales are most reliable and have the greatest validity. It also imposes an analysis that differs from respondent intent (some Detractors are not in fact detractors).
- Norms aren't norms if everybody does it differently. Because it is so easy to use, many firms use NPS in slightly different ways from one another, meaning comparisons of NPS scores should be taken with a grain of salt. Methodological differences introduce measurement bias.
- Employee incentives corrupt measurement. Just this weekend at the pet store I was told to answer 5 "to the question". A shallow focus on scores, rather than a deep commitment to improvement, undermines businesses.
- Surveys shouldn't be too short. A two-question survey doesn't have enough information to enable key driver analysis. It can be made to work for service industries, where each dissatisfied customer can be provided custom followup, but for product satisfaction a slightly longer survey can help identify key drivers of customer loyalty.
Market researchers are from Mars, NPS advocates are from Venus, but business is conducted here on earth. What do you think the two sides could learn from one another?