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On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?

Yes, the question.

It’s everywhere, isn’t it? It’s in your inbox. The second you buy anything, it’s on receipts. It’s basically haunting the entire corporate world.

It absolutely is. That one question is the foundation of the Net Promoter Score. NPS. It was famously called the one number you need to grow.

And you can see why it took off. I get it. It’s so simple, so clean. You get the single neat number that tells you if you’re winning.

Right.

But, and this is why we’re here, what if that one number is, well, a terrible predictor of whether your company is actually growing?

It’s a pretty radical thought, isn’t it? Especially when you think about how deeply embedded NPS is now.

Well, yeah. I mean, we’re talking about two-thirds of the Fortune 1000 using this thing. Bain and Company practically built an empire on it.

They did.

So, are we actually going to say that the business world has been staring at the wrong dashboard for like 20 years? That’s a huge claim.

It’s a massive claim. And that’s exactly why we’re doing this deep dive. We’re looking at this really fascinating research paper by Michael Knight from February 2022.

Okay.

And he essentially takes a sledgehammer to that whole idea that NPS is the holy grail for growth.

All right, so set the scene for us. Who is he actually studying? Because context is everything here.

He’s looking at a very specific, very high stakes industry. Managed Service Providers.

Yeah.

MSPs.

So, for anyone who doesn’t know, that’s outsourced IT, basically.

Exactly. The people who manage your servers, your security, the people you call in a panic when your laptop dies. It’s a super competitive B2B market.

Okay.

But the key thing here is that the lessons, they really apply to almost any service-based business where relationships are important.

So, our mission today is to figure out if a high net promoter score actually means your IT company or your law firm or your agency is making more money.

Or if there’s a better metric hiding in plain sight. And what Knight found suggests we might be measuring the wrong human emotion entirely.

Okay, let’s back up for a second. Before we take it apart, we have to understand the mythos of NPS. Where did this all come from?

It all started back in 2003. A consultant at Bain and Company, Fred Reichheld, published this famous article in the Harvard Business Review.

And he made that very bold claim.

Boldest.

Yeah.

NPS was the one number you need to grow.

The one number, not one of several useful indicators.

No, the one. And the idea is you take your promoters, the people rating you a nine or a 10, and you subtract your detractors.

The 0 to 6 crowd.

Right. And you get a score that supposedly predicts your company’s growth perfectly.

And what about the people who give you a 7 or an 8, the passives?

They get ignored. They just don’t factor into the equation.

That has always felt so brutal to me. You get a B, a solid 8 out of 10, and the system acts like you don’t even exist.

In Reicheld’s original view, an 8 is just a shrug. But here’s the kicker. He claimed his initial research showed this is basically 100% accurate.

But for science to work, someone else has to be able to replicate your results, did they?

And that’s where the story starts to fall apart. Knight’s paper points to academic critics, people like Keeningham and Christensen, who tried. They couldn’t do it. They just could not get the same result. They found in a lot of cases, NPS was actually a really poor predictor of growth.

So, Knight decides to put this to the test in the MSP market. And he didn’t just, what, send out a mass e-mail survey?

No, and this part is absolutely crucial. He didn’t use an e-mail blast. We all know what happens with those.

So, delete them on site.

Exactly. Or, you know, you respond if you are absolutely furious. Or if you’re the CEO’s best friend, you get the extremes, the lovers and the haters.

The silent majority in the middle just gets on with their day.

Right. So, Knight used semi-structured telephone interviews. He actually picked up the phone and spoke with 80 business owners and directors from 5 different MSPs.

Hold on, 80 directors. Getting 80 executives on the phone to talk about their IT guy sounds like an impossible task.

It’s incredibly hard. But that’s why the data is so good. He got a conversation, not just a click. And when he ran the numbers, comparing their NPS scores to their actual financial growth.

The results were…

Let’s just say they were underwhelming.

Define underwhelming. Was there a link or not?

There was a weak link. A weak to moderate one. The correlation, the Pearson’s R, was somewhere between 0.37 and 0.55.

Okay, translate that for those of us who skipped stats class. What’s a 0.37 correlation in the real world?

It’s like trying to predict someone’s height from their shoe size.

Okay.

There’s a connection, sure. But you see a size 10 shoe, you have no real certainty if the person is 5 foot 8 or 6 foot 4. There’s just too much noise.

So NPS isn’t the one number you need to grow. It’s more like a maybe this number is sort of useful sometimes.

Precisely. It’s a messy signal at best.

But Knight didn’t stop there, right? He didn’t just knock down NPS. He proposed a replacement.

He did. Enter the challenger. The NSS, the net satisfaction score.

Net satisfaction score. Okay, sounds pretty similar. What’s the actual difference?

It’s just one word in the question, but it changes everything. NPS asks about future intent. How likely are you to recommend us? It’s A hypothetical.

Right, you’re asking me to predict the future.

And to put your own reputation on the line. NSS asks about current utility. The question is simply, how happy are you with the service you receive?

But hang on a second. If I’m happy with the service, then of course I’ll recommend you. Aren’t those basically the same thing?

You’d think so, but psychologically, they’re worlds apart. Let’s say your best friend opens a burger joint. You go every single week. You’re loyal. You want them to succeed.

Okay, with you so far.

But the burgers are just okay, a bit greasy. The service is kind of slow. If I ask you, will you recommend this place for your boss’s important client lunch?

Oh, no. No, way. I’m not staking my reputation on a greasy burger.

Exactly. Recommendation costs you something. Social capital. Satisfaction is just about your own experience. Did I enjoy the service?

So NSS measures the actual quality of the burger and NPS measures your friendship with the owner.

That’s a perfect way to put it. And when Knight ran the numbers for NSS for the burger, the correlation to growth shot up to 0.867.

Whoa. Okay, let’s go back to your shoe size analogy. If NPS is shoe size, what’s a 0.86?

A 0.86 is like predicting someone’s height by measuring their leg. It’s an incredibly strong, almost one-to-one relationship. In the social sciences, anything over 0.7 is considered the gold standard. This is a knockout punch.

That’s just staggering. So, asking are you happy is a vastly better predictor of growth than will you tell a friend.

In B2B services, absolutely. because utility is what drives the bottom line. He points to one company in the study, DSC, great personal relationships. The clients love the owners.

So, they had a decent NPS.

They did, but their service, the burgers, was struggling. Their NSS, their actual satisfaction, was low. And guess what? Their growth was totally flat.

So, the NPS score was hiding the real problem.

It was. The clients were too polite to say they wouldn’t recommend their friends, but they sure weren’t giving them any more money.

That’s a huge wake-up call. We’re busy measuring loyalty when we should be measuring competence.

Exactly. Friendship doesn’t pay the bills. Good service does. If you’re happy with the work, you stay. you spend more, the company grows. Simple.

Okay, this brings us to another part of the study that I found both fascinating and frankly a bit terrifying. The saying versus doing gap.

Yes. The good old attitudinal fallacy.

So, one goal of the research was to see if these phone calls could also generate some Google reviews.

They’re pretty standard marketing play. You’ve got a happy client on the phone. You ask them, hey, would you mind leaving us a quick review?

And since people are generally polite, what did they say?

Overwhelmingly, they said yes. 87% of the interviewees agreed to leave a review.

87%. If I’m running that MSP, I’m thinking I’m about to get flooded with new five-star reviews.

You would think so, but Knight actually tracked it. He checked the Google pages afterward.

And the actual number was.

17%.

Ouch! From 87% promising to do it down to 17% who actually did.

It’s a perfect illustration of something called the theory of planned behaviour. Not quite working out. We think intent predicts what we do, but life just gets in the way.

He calls them planned abstainers.

Right, which isn’t to say they were lying. They probably meant it at that moment. But then you hang up, an urgent e-mail comes in, you have to pick up the kids. and it’s forgotten.

The paper brings up this amazing old study from the 1950s that just nails this point. The beer study.

Oh, the Packard study. It’s a classic, a true classic.

So, tell us the story.

All right, so researchers go to this brewery in the late 50s. They’re surveying the workers, you know, tough working class guys. They ask them, do you drink the premium light beer? or the regular heavy beer.

The premium one being the more sophisticated classy choice.

Exactly, the one that makes you look better. And guess what? The workers claimed they drank the premium light beer over the regular by a ratio of 3 to 1.

Oh yes, I prefer the finer things in life.

Precisely. It’s social desirability bias. They’re reporting the behaviour they think they should have. But the brewery had the real data.

They knew what was actually being consumed.

And it wasn’t 3 to 1. It was 9 to 1. in favour of the cheap, regular beer.

That is so perfectly human. We say what makes us look good. Of course, I’ll write a review for you. I’m a good, helpful person. But then, life happens.

So, if your entire growth strategy is based on what customers say they will do in a survey, you might be in trouble. You’re measuring their politeness, not their actual future behaviour.

Okay, so we can’t fully trust what they say they’ll do, but the study also showed we can trust what they say they want, right? Knight analysed the actual conversation.

Yes, and this is where we get into the qualitative gold. He just looked at what words came up most often when people described good IT service.

And I’m going to guess it was things like value, partnership, proactive. All the usual marketing buzzwords.

Not even close. The number one thing by an order of magnitude was speed of response.

Just fix it fast.

Fast, quick, responsive. Those words were everywhere. In fact, speed was ranked as twice as important as friendliness.

Wow, really? Because so many service businesses market their friendly, personal touch.

And the data says clients don’t really care that much. Speed was twice as important as friendliness? And friendliness was twice as important as cost.

So, people will pay more for fast service than they will for cheap service.

That’s what they’re screaming from the rooftops. I don’t care if you’re grumpy and I don’t care if you’re expensive. Just solve my problem now.

It’s a huge disconnect. Companies are out there running customer empathy workshops when they should probably just hire more people to answer the phone faster.

It applies to any service. Your lawyer’s client doesn’t want a new friend. They want the contract back today.

And there was a big negative theme too, wasn’t there?

Yes. It depends on who you speak to. Inconsistency.

The tech support roulette.

Exactly. Clients hate it. If I get Steve, I know I’m sorted. If I get Dave, my day is ruined. That inconsistency is what kills your net satisfaction score.

And there was that little nugget about timing.

Morning availability. Clients kept saying they needed help early, which makes total sense. You get to the office at 8 AM, find out something’s broken, and you’re stuck.

If your IT support doesn’t start work until 9, that’s a whole hour of lost productivity.

It’s a massive market-led opportunity. If your tagline is, we answer the phone at 7.30 AM, you could win business on that alone.

So, we’ve kind of hammered NPS. We’ve shown people don’t do what they say they’ll do. Does that mean serving clients is just a waste of time?

No, absolutely not. And this is the final brilliant twist in the paper. Even if the NPS score is a flawed metric, the process of doing these interviews is a gold mine.

You mean the conversation itself is where the value is?

Yes. Knight called them the side hustle stats. Just from having these conversations, nearly half the clients, 48.75%, gave specific, actionable ideas on how to improve the service.

That’s free consulting from your best customers.

It is, but this is the real kicker. Over 1/4 of them, 26.25%, expressed interest in buying more services.

Wait, what? A quarter of them basically raised their hand and said, can I give you more money? Just because someone called to ask if they were happy.

Yes, upsells. Just by having a non-salesy chat, opportunities came up. Oh, you do cybersecurity training now. We desperately need that.

Is incredible. You pay salespeople huge amounts of money to generate leads like that, and you’re getting them just by checking in.

Knight even did a cost-benefit analysis. He figured it takes about an hour and 10 minutes of work per completed interview. That includes all the admin and failed calls.

So, for a batch of 16 clients, it’s about 20 hours of work, half a week.

Less than a week of 1 person’s time. And for that, you get hot upsell leads, a list of service improvements, and accurate satisfaction data. The ROI is just… Massive.

The journey is so much more important than the destination, the score itself.

It is. And you can’t get that from a SurveyMonkey link. You can’t ask why to an e-mail form. On the phone, you can hear the hesitation in their voice. You can dig deeper.

Right.

That’s where the real insights are.

So, let’s bring it all home. If I’m listening to this and I run any kind of service business, What’s my key takeaway?

First, stop treating the net promoter score like it’s gospel. It might be useful, but in B2B service industries, it’s measuring loyalty, not utility. If you want to predict growth, start measuring net satisfaction.

Ask about the burger, not the friendship.

Ask about the burger. Second, speed is king. Your clients almost certainly care more about speed and competence than they do about friendliness or even cost. Audit your response times.

And third.

Pick up the phone. Don’t hide behind easy e-mail surveys. The really valuable feedback, the stuff that helps you grow, comes from the people in the middle. And you only get to them by having a real conversation.

I just can’t get over that 87% versus 17% gap on the reviews. It’s such a perfect, brutal summary of that attitudinal fallacy.

It really is. And it leaves us with a pretty provocative final thought for everyone to consider. When you look at your own company’s dashboards, all those positive scores, are you actually measuring your client’s happiness?

Or are you just measuring their politeness?

And are you building a business on a foundation of politeness? That’s a scary thought.

A very scary thought. Go check your metrics. Thanks for listening to this deep dive. We’ll see you on the next one.

Growing and selling your MSP business is easier than you think with MKLINK. We’ve been helping businesses like yours since 1998. For loads more, resources, downloads, MSP sales listings and marketing content that you can use for your own MSP business, register for free now at MKLINK.org.