The Dark Side of Using NPS as a Performance Management Tool

Let’s leave aside the theoretical aspects and arguments related to the suitability of using NPS. Instead, let’s consider the implications of using NPS as a performance management tool rather than simply as an indicator which tells us who well we are doing, as an organisation, in building meaningful relationships with customers.

Every human activity produces both things that we want – “goods” – and things we don’t want – “bads”.

- Garrett Hardin, Filters Against Folly

It occurs to me that when we use NPS as a performance management tool we act on the people in the organisation, we act on customers, we alter the balance of power between the multiple parties. And we inject high does of fear and greed into the rich tapestry of human interactions.  

This is how we end up generating the “bads” – the dark side of using NPS as a performance management tool.  Let’s get specify and look at the dark side. What shows up?

  1. Customer facing employees (sales, service) and their managers game the system to generate high NPS scores;

  2. Some customers are either ‘bribed’ and-or ‘pressured’ to give high scores;

  3. Some customers, especially the more powerful ones in B2B, exercise their new-found power to extract concessions – free ‘products’, more discounts, credits, special treatment – from the sales reps and account managers; and

  4. Some sales reps and account managers ‘give away’ more than they need to’ in order to play safe and assure high NPS scores.  This ‘giving away’ tends to be in the region of services which do not directly impact on the revenue figures and commission cheque of the sale rep.

I leave you to decide whether the “goods” generated by using NPS as a performance management tool outweigh the “bads” that I have shared with you.  I do assure you that points 3 and 4 above are not just theoretical – this behaviour is occurring.

Next time you are planning an intervention in the rich web of human relationships get together a diverse group of people, including those who are likely to be impacted, and explore this question: what is likely to happen – today and over the course of time – after we make this intervention?

Posted on November 28, 2013, in Customer Experience, Customer Loyalty, Customer Service, Management, Sales and tagged , , , , , , , , . Bookmark the permalink. 5 Comments.

  1. Maz, great point. I have written three posts on the subject of ‘Naive Intervention’ which NPS truly is. I remember that when I was a sales rep the whole focus of my peers was how to use the IBM sales points system to produce the highest commissions. It had little to do with what the customers needed.

    http://isismjpucher.wordpress.com/2013/01/05/naive-intervention-part-1-from-antifragile-to-models-behaving-badly/

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    • Hello Max,
      What a delight to hear your voice and swim in the clarity of your thinking as shared in your post. I clicked the link and read it all, twice. And I noticed that I had already liked this post of yours.

      YES, I find myself to be in wholehearted agreement with you. And I am grateful that you exist and that we are in communication.

      What would become possible if we gave up the pretence of absolute knowledge. And of forcing the world to fit into our categories based on our human weaknesses? We might just increase the workability of our lives, our organisations, our world. I wrote a post in that just today:

      http://maziqbal.net/2013/11/30/generating-workability-unclenching-the-grip-of-illusion/

      Be well friend!

      With my love,
      maz

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  2. That is so true Maz, for once I have nothing to add.

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  3. Adrian Swinscoe

    Hi Maz,
    It’s fascinating how firms create a stew of indicators, measurement, performance management and incentives and wonder why it tastes so bad and how it turns out that way.

    Personally, I believe that NPS can be a useful but simple indicator of sentiment. That’s where it ends.

    Adrian

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  4. Maz,

    Is your article just about NPS – is there something in particular about NPS that leads you to this conclusion or is it, in fact, all measurement that can be gamed?

    Which leads me to the question – do you advocate no measurement – and if so – then what do we measu…. or… erm… I’m lost if I can’t use the word measure ;-)

    what do we do instead?

    thanks for writing – always fun to engage with your thinking…

    Martin

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