The recent news that Ofsted is changing from a one-word rating to a more nuanced system got me thinking again about the remaining focus on Net Promoter Scores NPS by some firms. And indeed, the focus on Likelihood to Recommend as they manage individual client relationships.
As with the Ofsted one-word rating, focus on this as THE prime measure is intuitively appealing, but (unfortunately) flawed, particularly when aiming to gain a clear picture of the health of the firm’s growth platform.
For example, which would you say has the greatest growth potential?
- A relationship where the main decision maker scores their likelihood to recommend the firm as 10/10, but where they are in a stable pattern, with no plans for significant growth, in a sector with few regulatory issues.
- A relationship where the main decision maker gives a likelihood to recommend as 8/10, but which has plans for product range and geographical expansion, potential acquisition, and a future change of ownership structure
Much better to use a metric of relationship potential as well as NPS (or likelihood to recommend), or, even better, a blended metric covering the aspects of performance which have most impact on the client’s choice of firm. This will better provoke focus on the areas most needing attention.