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Posted by on Aug 18, 2012

Kmart and the limits of the NPS

Kmart and the limits of the NPS

using NPS at checkout

At Kmart, customers must answer the NPS question right before checkout

It was just a matter of time. Checking out at Kmart, the screen asks whether I would recommend Kmart to friends. Gee, I hadn’t really thought about that – should I recommend Kmart to my mother? Or can I just get on with unloading my shopping cart filled with toilet paper and shampoo?

The original idea of the Net Promoter Score or “NPS” from Fred Reichhheld in 2006 was to validate a measure of customer satisfaction that correlates to profit. With Reichheld and Bain  “proving” that one question “would you recommend this to friends and family?” delivers more money, companies around the world scrambled to follow the latest “must-do” : become a Net Promoter Company. Back then, a “recommendation” carried weight.

But since then, we have seen an explosion of customer surveys that ask us if we’d recommend everything from the plumber to the kitchen sink to our friends and family.  We daily “recommend” things to “friends” via a simple “Like” button.  In other words, is the value of “recommendation” in 2012 what it was in 2006? Does it still predict profit? Would the original Bain “proof” work today, in a world where recommendations are a dime a dozen?

The way the NPS is over used today suggests that the time has come for a weightier measure of a company’s relationship with its customers : one that involves trust. (Interestingly, a trust question was also an  important question in Reichheld’s original work, but lost out to the simplicity of the NPS).   Here comes the Trust Equity.

 

 

2 Comments

  1. I encountered the same “recommend” screen at a Kmart checkout counter recently. The machine would not accept my credit card until I had answered the question. I refused, saying I would not be bullied into responding to a survey. “No problem,” said the clerk. She reached over and pushed the “Definitely will” button, allowing me to pay for my purchase. Problem solved. I haven’t been back to Kmart since, but their NPS probably looks great.

    • What an insightful story. Peter, perhaps you might be interested in this Forbes article that Markey / Reichheld recently wrote about how to implement NPS to get “good” data results. Interestingly, they didn’t mention the context of how the survey is taken – which, as your example shows, is key to getting good data. Hope they’ll addend this to their article.

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  1. When’s the right time to ask the NPS? | Trust Equity - [...] K-mart the customer is forced to answer it during check out when the customer is busy unloading a cart ...

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