Is a NPS a valid predictor of customer loyalty?

You might have heard of NPS.  It is a management tool designed to gauge the loyalty of a firm’s customer relationships.  But how effective is it?

Topic – Net Promoter Score

Mentor – Sue Barrett

  • The intention of NPS
  • Who can use NPS?
  • How valid is NPS to real estate businesses?

Here is a link to today’s feature blog by Sue

Marketing Monday – How many properties should you have in your farm area?  Here is why it varies.


Kevin Turner:I’m pleased to say that our mentor all this week is someone I feel very privileged to have on our show, Sue Barrett who I’ve been following for many, many years, has a wonderful company Barrett consulting, there are links on all of the pages on REUNCUT all this week. Sue joins me to talk about a number of articles that I’ve read with great interest in recent times.

Kevin Turner:The first one … firstly good morning, Sue. How are you?

Sue Barrett:I’m well, thank you Kevin. Thank you for having me on.

Kevin Turner:That’s a pleasure. It’s a delight to be able to talk to you ’cause I love what you do and I love how you do it. So, the first one I want to pick up is on is about Net Promoter Score. We’ve discussed it in our show a lot in recent times, better known as NPS. But just explain to us how it works and whether or not you’re a believer in this.

Sue Barrett:Well, I had a science background, so I tend to approach things from a very pragmatic perspective. I like to look for evidence and I like to look for things that actually work. So I think in theory or in concept, the Net Promoter Score is a really good thing to start to think about how it actually works in reality really I think needs more attention. We do a lot of assessments, we like to look at things from different angles, and I think just looking at one item may or may not give you the true evidence and information that you want to have.

Sue Barrett:So the idea with a Net Promoter Score is that customers are likely to promote you to other people so that then helps actually build your referral base and have people coming to you for opportunity to work with them.

Kevin Turner:Do you think … sorry to interrupt you, Sue …

Sue Barrett:That’s all right.

Kevin Turner:Do you think Net Promoter Score, the major benefit is that it actually gets us as dealers, people who deal with the consumer, to focus more on this? And by doing that, we then get better at our customer service?

Sue Barrett:Well yes you can focus on that, but again it comes back to our intention as individuals. Am I genuinely there to actually help someone regardless of whether they promote me or not? So I think if we actually focus on what our intention is, and that is to be of service to others, then it would be great if that person has felt that they’ve had a valuable experience, that they feel confident and comfortable to promote us. That’s the ideal state, but if we’re engineering ourselves in such a way that we’re trying to get them to promote us but we’re not really sincerely helping that person, then you can see it becomes disingenuous.

Kevin Turner:It’s one thing to have a Net Promoter Score, but doing something meaningful with it is another thing. How do we do that? How valid is it?

Sue Barrett:This is the problem, and this is why I write the article about questioning the validity of the Net Promoter Score in and of itself. I think there are other things that we should actually be looking at, and I don’t think there’s anything wrong with actually directly asking a customer what their experience has been like with you and then genuinely asking them, “Look, given what we have just shared, do you feel confident in promoting us to other people? Would you refer us to other clients? And if so, are there people that you think I could speak to now?” Being more candid and direct rather than just saying, “Are you likely to refer us?”

Kevin Turner:Because I read in your article that whether you believe in NPS or not, it actually raises the awareness, and I think this is probably what I was getting at earlier. It raises the awareness of people to examine their own business, and if in that what their sales approach is like and their service levels.

Sue Barrett:Yes, and that’s why I think one of the best things you can do is to say, “If you were selling to yourself, would you feel comfortable referring yourself?” Then come back to how do you … there’s a beautiful … it’s all about the golden rule about treat others as you would like to be treated, but actually there’s the platinum rule I heard about recently, which is actually treat others how they would like to be treated.

Kevin Turner:Oh, yeah. Very, very powerful. We are going to post up the article that we’ve referred to this morning on our website today. It’ll be in the blog section, Net Promoter Score a valid predictor of customer loyalty, and that’s written by Sue Barrett, she’s our guest all this week. Sue, tomorrow I wanna pick up on another subject with you and that is the sales approach, are your sales people stumbling at hello? Interesting conversation. Sue will join us again tomorrow morning. Thanks, Sue.

Sue Barrett:Thank you.

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