The Net Promoter Score era is Over. Enter the Brand Connectome
The true drivers of brand preference are hidden from view. Most current marketing approaches don’t reveal them. Companies are spending millions of dollars to understand consumer motivations but still don’t understand what makes a brand catch on.
How can that be? After all, with a myriad of social listening tools, 24/7 consumer dialogue and continuous tracking of likes, clicks, and shares, isn’t sentiment being measured more thoroughly than ever? Unfortunately, no. And that’s largely because brands are relying on a misleading metric.
Companies across the country depend on the Net Promoter Score (NPS). It’s based on a simple survey that asks people whether they would recommend a brand to a friend on a score from zero to 10. The percentage who are “promoters” (those who say 9 or 10) minus the percentage who are “detractors” (6 and below), provides the “score.”
Two-thirds of the Fortune 1000 use the NPS, Fortune reports. “It’s more than a metric. One could use the word ‘religion,’” an IBM executive told the magazine.
So what’s wrong with it? Just about everything.
Understanding consumer behavior
First, the NPS measures what people say rather than what they do. And there’s always a substantial discrepancy. As MarketingWeek notes, just look at polling data that consistently fail to predict how elections will go (and who is really a likely voter).
But there’s a deeper problem. Consumers can’t accurately tell you why they make their brand decisions. Like Net Promoter Score, survey questions ask people to think. They invite rational, considered responses. As I pointed out in part one of this series, research has found that 95% of consumer decisions are made instinctively.
Inside the mind of each consumer lie the unconscious memories and associations they have with any given brand -- the Brand Connectome. It’s far too rich and complex to be summarized by a number. The health of a brand comes down to whether its connectome is larger, and filled with more positive associations, than its competitors.
This helps explain why marketing leaders often point to high Net Promoter Scores even as their brands are really in decline. In an analysis of one year of transcripts, the Wall Street Journal found 150 references to the NPS in earnings conference calls by 50 companies -- and not a single mention by any company that their score had dropped.
Providing a path forward
Beyond its lack of correlation to brand health, the Net Promoter Score also fails to show companies what to do to drive growth. To blaze a path forward, leaders need to know what’s inside their connectome and the connectomes of their competitors.
You need to discover the positive associations people have with your brand so you can build on them. You need to know the negative ones so you can counteract them. And you need to understand the negative associations your competitors have so you can use them to your advantage.
All your marketing efforts should trigger positive growth in your Brand Connectome, so your brand takes up more of that valuable “real estate” in the mind.
Applied behavioral science
Behavioral economist Daniel Kahneman won the Nobel Prize for his work showing that the human mind has cognitive shortcuts that overtake rational thinking. In work across 25 years helping iconic brands increase revenue by billions, my team and I have examined what lies inside those shortcuts. In “Cracking the Code on Brand Growth” published by Wharton, we shared our research on the power of instinct to accelerate revenue growth.
Part of what we found is that the Brand Connectome is remarkably convergent among current consumers and among competitive/non-users. Contrary to marketing theory that pushes greater segmentation, we have found that the ultimate drivers of brand growth are largely the same across different demographics. People have highly similar associations and memories that guide them to reach for one brand over another.
When marketing leaders learn this, they find that behavioral science can be applied to drive business in the most practical ways. And suddenly, the era of fixating on Net Promoter Scores seems outdated.
What investors can do
The next time you’re on an earnings call and an executive brings up a Net Promoter Score, ask them why they put faith in this metric. What does it tell them about the instinctive reasons people buy their brand or a competitor one? When the NPS remains good despite sagging sales, isn’t that a sign it should be retired? Do they know what’s inside their Brand Connectome?
To be fair, this does not mean that there are zero positive uses for NPS. Businesses may get some use out of seeing whether a major change in the brand or an event in the news leads to a sudden drop or spike in how people think consciously about a brand. But beyond that, it doesn’t have much to offer.
In this era of great disruption, it’s time to disrupt the outdated processes and strategies that have failed companies for too long. It’s time to embrace an understanding of consumer instinct. Only then will companies tap into their potential for unprecedented growth.
This is the second of three columns about why instinctive brand behavior should replace loyalty to achieve long-term growth.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.