Call me just one of those crazy financial services guys if you like, but I think we need to remove the parentheses around the Net Promoter Score (NPS), reflecting a negative, and rename it the Net Detractor Score, NDS, so we can all score a positive.
What prompted this momentary lapse of reason was that I revisited a financial services industry survey the other day which showed none of the surveyed organisations scored a positive NPS. I'm sure that's why the research bods servicing this sector go out of their way to make us feel better about ourselves - as well as justifying more expansive research methodologies. They tell us the NPS is not much of an indicator in financial services because people want to retain long-standing friendships by not recommending anyone put their lifelong savings into XYZ Investment Manager.
The other thing that prompted this blog was a mailed invitation from the Fund Executives Association Limited to attend a Net Promoter Score workshop later this month, where several bods will evangelise about how using NPS had transformed their businesses. Only one of the facilitators is from the financial services sector and none from funds management or superannuation.
Chief convenor of the meeting is a marketer and academic for whom I have enormous respect, Prof. Mark Ritson, from the Melbourne Business School. Mark is a passionate advocate of NPS, so I fear I'd be a luddite in the land of the fairies should I attend this gig.
My problem is that in the funds management and/or superannuation business, just about everyone is on the nose since the GFC. This isn't helped by a not-for-profit sector that basically tells everyone that financial advisors who receive commissions are ripping them off and investment markets that refuse to stop bouncing around. GFC + Outrageous Fees + Uncertainty does not equal passionate consumer advocacy for the sector!
I've heard friends and relatives saying such and such a company lost their money during the GFC. How does your average 20-something call centre dude convert someone with that perception into an evangelist? It takes more than soothing words, nice phone manner and an attractive website.
Most NPS scores that I've seen for everything from banks to investment funds are languishing in the minus 20 to minus 60 zone. These scores wouldn't have customers queuing at the counter even if you were selling ice cream cones in Noosa on a hot day. Yet financial services businesses seem to live with these scores year over year.
I am in bed with the research bods at the moment. I think the NPS is an interesting, but fairly useless measure in financial services, unless considered in relative terms.
But, as always, I'm open minded about these sorts of issues. So I'd better register for the FEAL gig I guess because, right now, I'm not improving the NPS for NPS.
Brooskie, I think you are right and wrong at the same time - I think NPS may be a better measure for products rather than services.
ReplyDeleteThink about it this way the highest scorers on the NPS in fin services are the building societies - yet they are the slowest growing and the least profitable. If the NPS scores really represented desirability they would be the fastest growing. Something else is afoot here
Thanks James, I haven't actually seen scores for Building Societies, but I'll take your word for it. Perhaps the fact that they have been below my radar reflects why they are slowest growing! Generally, I think NPS is more valuable in high-engagement, low-complexity environments, whether products or services. For example, many tourism and personal services are promoted most effectively by word of mouth i.e. through promoters.
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