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September 30, 2010


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Javis Lounsbury

Results from surveys and metrics determines what area a company should fine-tune to ensure that improvements will be continuous at its best, since customers are the lifeblood of many businesses, it is ideal to find ways to make sure that they their loyalty to them will be long-lasting.


It's a mistake to focus merely on the metric itself in this kind of discussions. It should be all about the insights you get from asking WHY someone promotes, what it takes to become a future promoter or what causes the criticism. I dont think that the metric itself is so special. You probably get the same answers from any other 5 or 10 or 11 point scale and open ended why-question. But hey if every manager believes the link with the bottomline, thats fine. You go with the NPS (and ofcourse take into account what it takes to get valid results). The ultimate goal should be 'good' profits, just do what it takes!

Chris Petersen

Thank your interest and comments on "7 Metrics for measuring loyalty that counts.

I would generally agree with your comment that we are in agreement on "do what matters".

I have no qualms about the utility and use of NPS as one potential indicator of customer satisfaction. It is elegantly simple in design and execution, and low cost.

In short, I think that we agree that NPS is one loyalty metric.

My point about "validity" is that we can NOT always assume that it accurately predicts, especially if the sampling and execution are poorly executed.

Companies need to balance the scorecard with outcome metrics, which in turn enable intra company validation.

Thanks for the dialog ... and useful background information on NPS and how to make it more valuable as a predictor metric.

Chris Petersen

Adam Ramshaw


I think that we both come down on the same side of life: do what matters. However, it's on that basis that I disagree with you on NPS.

NPS, like almost every other metric can, and is, misused.

Used properly though, the key difference with NPS is that it has been shown to correlate with company revenue. That is, if you increase NPS your revenue will probably go up. If your NPS goes down your revenue growth will probably drop.

It is a loyalty predictor and this feature, combined with its ease of use make it a useful business tool.

For more background on why NPS is really different have a look at this post: http://genroe1to1.genroe.com/2010/01/17/whats-not-wrong-with-net-promoter-score/ .

Adam Ramshaw

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