SBP 044: NPS Exposed - What Does It Really Measure? With Prof. John Dawes.

Net Promoter Score (NPS) has been a crucial part of the business world for nearly two decades. It was initially presented as the ultimate metric, the one to rule them all. Its simplicity and focus on customer satisfaction made it a darling of the industry. However, with the evolution of customer research and feedback analysis, the idea of NPS as the singular, all-encompassing metric is being questioned. Even though two-thirds of Fortune 500 companies still employ NPS, it is no longer considered the only measure of customer satisfaction. In this episode, we are joined by John Dawes, a professor at the Erenburg-Bass Institute, who will share his research on NPS. This episode will likely challenge what you know about NPS and shed light on some of its flaws. Our Guest Webpage: LinkedIn: Our Hosts: Follow our updates here: ⁠⁠⁠⁠ Get in touch with our hosts: Marc Binkley: ⁠⁠ Vassilis Douros: ⁠⁠⁠ Links & Research: HBR - The One Number You Need to Grow HBR - Where NPS Goes Wrong Qualtrics - THe Ultimate Guide to NPS Int. Journal of Market Research: NPS - What Should Managers Know? A longitudinal Examination of NPS and Firm Revenue Growth Byron Sharp - NPS does not predict growth Fred Reichheld - The Ultimate Question 2.0 Why NPS is a bad tool and what to use instead Brand Growth Potential How Brands Grow Timestamps 0:44 - Intro to John Dawes 2:24 - What NPS is and how it’s measured. 3:50 - Why NPS benefits from extreme scoring 5:48 - The downside of the NPS scoring method 8:38 - Why 66% of Fortune 500 companies use NPS 10:40 - The false promise of high NPS scores 13:44 - The trouble with NPS-based incentives 16:46 - The disconnect between NPS scores and business performance 19:30 - The challenges of NPS with growing vs established brands 21:28 - The effectiveness of NPS vs. past sales as a predictor of future growth 26:02 - Are NPS detractors actually bad? 29:50 - Is NPS a superior metric to CSAT scores for predicting growth? 33:17 - What is NPS good for & what to ask instead 37:56 - Can Google Reviews replace NPS? 39:25 - Metrics better than NPS for predicting growth 42:53 - Can we put the NPS genie back into the bottle? 46:47 - If not NPS for growth, then what? 49:32 - 50 years of brand performance disproves loyalty as a growth driver 52:19 - How to find out more about John 54:01 - Post-pod with V and Marc Where to Listen: Apple Podcasts: Spotify: ⁠⁠ Google Podcasts: Youtube: © 2023 Sleeping Barber

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Welcome to the Sleeping Barber podcast with your hosts, Marc Binkley and Vassilis Douros. The sleeping barber is a classic computer programming problem that illustrates the challenges of effectively managing multiple systems processes. In business, we're faced with similar challenges. How do we align operations, IT and HR to execute a strategy and drive growth? How can accounting and legal help build and defend brands? How do marketing, sales and customer service teams effectively and efficiently acquire and serve customers? These challenging problems are exactly what this podcast is about.