Managers and Academics

As researchers and teachers we have a responsibility to advance the practice of marketing. This isn’t just about teaching technical skills. Knowing how to discount a cash flow is useful but maybe it is better to teach students to ask questions. Academics can often help students achieve this because they: a) can step back from day to day pressures, b) are, hopefully, trained in reasoning, and c) are, if you are lucky, smart.

When a problem is raised and the answer evaded academics have a duty to help highlight the evasion. To illustrate lets turn to the Net Promoter Score. Because the claims were so strong for NPS it was perhaps inevitable that controversy would ensure. This is healthy, critics have a right to criticize and supporters to respond. Things can be said to defend NPS — the simplicity is potentially powerful, and the feedback systems interesting — what is not okay is to avoid the question.

Fred Reichheld says: “They [critics] said they could find no connection between Net Promoter Scores and loyalty, growth or profits. … One senior executive who implemented NPS was barraged with e-mails protesting the plan to monitor NPS was simplistic –“based on flawed research, fragrantly illogical, statisctically invalid and fundamentally flawed”” (Reichheld 2011 page 231). As I said critics have a right to criticize.

At this point you might expect a response. An explanation of the connection between NPS and growth and evidence that the research wasn’t flawed. Instead Reichheld seems to find calls to support his claims with evidence tedious. His thinking seems to be that because managers use the process it must be good. Sadly this was the same logic supporting punishing people for being left handed and burning witches. People did those for generations but they really weren’t a good idea. The lack of burning witches in your high street is why asking for evidence of causation is a good thing.

This is not just academic pedantry. To ask for proof and have none forthcoming is worrying. CEOs should seek evidence supporting the claims they make and claims made to them. (My advice: if your CEO doesn’t believe in causation then next time you mess up just shout “witch” and blame it on someone else).

We are a long way off having a perfect causal model for business success but we should at least be trying to get there. When asked for evidence their plan is a good one a CEO should have a better answer than “because I say so”.

Read: Fred Reichheld, 2011, The Ultimate Question 2.0: How Net Promoters Thrive In A Customer-Driven World, Harvard Business Review Press