After more than a decade in enterprise sales, I confess that my least favorite experience is being forced to buy anything that requires me to engage with a salesperson. I do all my research online, read reviews from multiple sites, and talk with trusted friends and business colleagues to get their opinion on any of my potential purchases. This is true for both personal and professional buying decisions. But this strategy is not without risk, because reviews are often manipulated and product scoring without a level of process and rigor that eliminates bias is a type of data manipulation that hurts us all.
The Purity and Simplicity of the Net Promoter® Score (NPS)
One of the most well-respected and research-backed metrics in the industry today is the Net Promotor® Score (NPS), a metric that was developed by (and is a registered trademark of) Fred Reichheld, Bain & Company, and Satmetrix. It was introduced by Reichheld in his 2003 Harvard Business Review article
with a very compelling goal directly tied to buying behaviors – NPS seeks to identify how many customers are actively promoting a product, as compared to passives or detractors. The proper Competitive Benchmark (NPS) process is rigorous. It takes time and it must be done correctly. Experienced professional companies are engaged to execute the process on behalf of any specific vendor to ensure that the process is blind to the respondent. This means that the respondent does not know which (if any) vendor included in the NPS survey document is sponsoring the work. And, the respondent data sample size is large enough to be statistically significant – well beyond a single vendor’s customer list, especially a customer list provided by the vendor.
The goal of the NPS process is not simply to produce high scores that can then be used as marketing material. A calculation based on a single vendor’s customer list at a single point in time is not an NPS score. Companies that really are committed to the value of NPS make and continue the investment because they believe that NPS scores are directly related to revenue growth, customer retention, and product strategy advancements. These companies use the aforementioned Competitive NPS Benchmark methodology.
Micro Focus Takes NPS Seriously and Vertica Comes Out on Top
Micro Focus is one of those companies. Led by Dr. James D. Borderick, a Master Class Certified NPS expert (among many other impressive credentials!), Micro Focus surveys customers on a quarterly basis and has been doing so for years, providing valuable trend data for all of its products. When the first NPS report with Vertica scores was presented to me in 2018, I knew very little about the rigor required to build a reliable Net Promoter® Score. Dr. Borderick was very impressed with the Vertica NPS score of 58, which was higher than all competitors included in the survey including IBM (Netezza), Amazon, and Oracle.
Beware of Bogus Scores!
Industry expertise dictates that any score above 60 is likely to have been created outside the boundaries of industry-standard NPS protocol. For example, if a company conducts an online survey (think about how many fake reviews happen online!) in a single month (trend data?) with questions about only one vendor (would it be hard to figure out who might be sponsoring this survey?), an advertised NPS score of 71 should indeed capture some attention. But for me, that attention would not be positive – instead, it would make me immediately question the quality of the data and know that the vendor disregarded the respected and rigorous Net Promoter® process.
I look forward to seeing future iterations of the benchmark program and using the data to enhance our already world-leading Vertica software