The ultimate or the last question? How NPS could compromise your understanding

ultimate questionThe number of top executives who is asking for NPS (Net Promoter Score) has grown permanently since the famous article by Bain & Company mentor Frederick F. Reichheld (The One Number You Need to Grow, Harvard Business Review, December 2003). Main reason of such success is not the NPS’s predictive ability but its own simplicity.

Top executives hasn’t enough time to read huge amounts of pages describing complex (although elegant) analysis or sophisticated indicators. NPS seems to provide a good recipe: it is simple to explain, it is short (“The one number…“) to show, it is clear to understand.

Like several examples we can catch from other contexts, NPS is a “postulate-driven” assumption: if I recommend, I am a promoter; if i don’t recommend, I am a detractor. Like other postulates, NPS has a corollary: company revenues are predicted by NPS.

I don’t agree. Simply. I don’t  mean I don’t care Top executives’ need to receive few, clear and self-standing results that could provide a compass for growth. I strongly suggest to understand that a postulate has to be weighted before to be accepted.

A careful observation of NPS could drive us to a healthy criticism. And I say healthy in an ontological meaning (every theory must be put to the test), but also in a restricted meaning (if you want a compass for growth, be sure it is calibrated).

I will describe main mistakes that may occur to you if you don’t accept a healthy criticism on NPS. Mistakes are divided between

A. NPS’s own lack of foundation

B. Self standing NPS risks

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You! Hypocrite Research Spender! – mon semblable, -mon frère!

Thomas Stearns Eliot ends The Burial of the dead (first part of Waste Land) with an excerpt from Charles Baudelaire‘s preface to Fleurs du Mal: “You! Hypocrite Lecteur! – mon semblable, -mon frère!” (in Baudelaire’s original there isn’t the word “You!”). We can translate it in “You! Hypocrite reader, my likeness, my brother!”.

In Baudelaire’s (and Eliot’s mind), the reader is guilty of lies and sins exactly like the author. And sins are not the output of any kind of Devil’s activity but rather the result of boredom.

Recently I answered to an online questionnaire that asked me about “online bet games”. I d0n’t bet often but the curiosity pushed me. And I found a great example of HOW NOT TO WRITE A QUESTIONNAIRE.

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Tecniques: it’s not a matter of “which”…

Sometimes I meet research customers (or prospect customers) who ask me: “Which kind of techniques do you employ at your institute?“. Usually I answer  “Just a bit of everyone “. I understand the meaning of the question: MR is a whole made by empirical experience, so if you “use, know,employ” certain techniques, you are supposed to be “skilled enough“.

But I prefer to talk about another matter: which kind of techniques would fit with your purpose. Let’s take an example: new concept or new products. They deal with the notorious newcomer’s dilemma: if you propose a new sentence (concept, thesis, product, …), mainstream could not to listen to you;  if you propose a mere variation of a known sentence (concept, thesis, product, …), you wouldn’t be new and probably outsmart by your competitors who have a more well-established position.

Choose the right research mix is surely the right option. In the past years unwarranted researches drove to several dramatic flop (do you remember when gurus told us that no one would have chosen a mobile phone to take a photo and that the “real business” was in “multimedia content streamed by phone services”?).

Follow the video and laugh with me…

A bright new product… ancient times focus group

How research provides its own ROI – Discussing the change-over

globeI can’t hide I have a fondness for ESOMAR. Its mandate is quite well-summarized by the claim “Enabling better research into markets, consumers and societies”. So, promoting the industry does not involve to show its credits and knock its rough edges off. Promoting the industry means to improve it. I don’t want to discuss if it does happen or not… but, in times where paperboys way appears the only way to communicate, giving itself such a “plan” is a good starting point. Or not?

ESOMAR draws up its Global Market Research Industry Report, yearly. Data are a healthy outlook beyond national borders. Some of such data deserve a comment.
First of all, the industry shows first serious creaking; that’s so after a period when great research corporation seemed to be guarded against continual coming and going which are the daily condition for little agencies.  Absolute MR industry growth was 4.5% in 2008. If I was a journalist I could stick to such a fact which marks a growth, while global GDP did fluctuate around zero in any world area or stopped at 2% globally (ref. World Bank).

Other pieces of information are less encouraging. Inflation adjusted datum decreases at a cheerless +0.9%, with some notable regional differences (see below fig. 1): North America registers a curt -2.1% (adjusted), Europe lines up the average, while Latin America grows significantly (+13.4% absolute value, +5.6% adjusted; Latin America GDP grew 4% in  2008).

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