Using Net Promoter Score (NPS) in B2B market research
June 20, 2020
The Harvard Business Review paper introducing the Net Promoter Score (NPS) made some bold claims: “A strong correlation existed between Net Promoter figures and a company’s average growth rate over the three-year period from 1999 to 2002”.
The implication? Focus on improving NPS, and commercial success will follow.
Equally, NPS intuitively makes sense when explained. If a client is likely to recommend your product or business, then they are going to help you with acquisition. It also suggests they are loyal, and you’ll retain them.
Therefore, it’s no surprise that so many organizations measure it.
But while NPS sounds good in theory, it doesn’t always hold in B2B markets.
One reason for this is that there are multiple types of loyalty in B2B markets. In some markets, customers have no choice but to work with one supplier. We call this ‘forced loyalty.’
In other markets, spend is distributed between multiple suppliers. Here loyalty is of the “I’ll spend more with you than the other suppliers I use in this area” type. We call this ‘preferential loyalty.’
Both types of loyalty work slightly differently than the concept of loyalty that underpins the NPS framework.
The result is that NPS data doesn’t always correlate to commercial performance for B2B organizations. In other words, NPS doesn’t always work in B2B research, and should be used with caution, if it used at all.
Read more about our approach to tracking perceptions of your brand or performance here.