Discover more from Learning by Proxy with Vivek Srinivasan
Net Promoter Score
How many of you answer every survey with the greatest interest and integrity? Then why do you expect others to?
If you live in the startup world, it would seem like everything is run by a net promoted score (NPS). There are founders who will live and die by NPS. The malady of NPS has not remained restricted to startups. Now, even when you visit the bank, they will send you a mail asking you for the NPS.
Net Promoter Score is nothing but a scale of rating from 1 to 10, where 1 is the lowest score an 10 is the highest. You can measure how likely your customer is to recommend you, how much they like your product, how happy your employee is within the organisation, just anything you can plot on a scale of 1 to 10.
How many times have you considered all factors before providing a rating such as this? If you are angry, you will give 1 irrespective of how well you were served on 50 previous occasions.
Employees often use NPS as a tool against the organisation. Never ever have I got an NPS mail from the bank after I have had a harrowing experience. It is almost always sent to me after a pleasant experience. I am sure there is a considerable amount of statistical gaming going on.
When you live by the sword, you die by it. NPS is a weapon of math destruction, and it has and will continue to destroy many businesses.
I wonder if Reliance even asked you for a Net Promoter Score? Massively profitable company, largest in India.
If you are an online e-commerce site and I do not even buy from you because I thought you were too expensive, what would my NPS be? You would not even collect it.
One company that used to rely heavily on NPS and often scored well was UrbanLadder. If NPS was such a powerful tool and so reliable, UrbanLadder would not have been sold for pennies to Reliance.
In the long list of vanity metrics, NPS is another one that is taking many startups who cannot figure out their profitability first, to their graves.