Net-promoter nonsense

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Recently talked with 3 sector-leading firms obsessed with their NP score – the % of customers who are Promoters minus the % who are Detractors. Having more people like you than not is for sure “a good thing”, and NPS advocates like to point out that firms with a high score out-perform others (never mind how the causality actually works, or what to do with it!).

But others already saw that it’s badly flawed, with illogical reasoning and a disconnect from what really matters. First, ...

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Customer satisfaction and growth

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Interesting article in Sloan Management Review on linking customer satisfaction to growth. Looks based on very thorough research on customer satisfaction metrics and their subsequent behaviour – especially passing on recommendations. Of course, to do the customers-to-sales link properly, you would want to break apart the three elements [a] customer win-rate, [b] customer loss-rate .. and their combined effect on the total customer base .. and [c] purchase rate. See Strategic Management Dynamics chapter 6.  Do beware ...

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