uch of Corporate America is obsessed with its net promoter score, or NPS, a measure of customer satisfaction that has developed a cultlike following among CEOs in recent years. Unlike profits or sales, which are measured and audited, NPS is usually calculated from a one-question survey that companies often administer themselves.
Executives pointed to strong or rising NPS as proof that shoppers preferred to pick up orders at Target Corp. stores or that Google’s newest Pixel smartphone was off to a good start. Out of all the mentions the Journal tracked on earnings calls, no executive has ever said the score declined.
Dozens of public companies are reporting the score in securities filings. Last year, “net promoter” was mentioned in 56 proxy filings. Some companies, including American Express Co., Best Buy Co. and Citigroup Inc., list the metric as a criteria for executive compensation, alongside traditional measures such as revenue growth and earnings per share.
The score was introduced in 2003 in a Harvard Business Review article titled “The One Number You Need to Grow.” The Bain & Co. consultant who wrote the article called NPS the “simplest, most intuitive and best predictor of customer behavior” and a “useful predictor of growth.”