The Best Business Performance Metric (KPI) | Share of Search vs. NPS
Marketers, executives, and analysts alike have struggled to find common ground on a shared business framework for measuring marketing investments and aligning KPIs with the business in its entirety. This has often led to Silos, counterproductive plans, and inefficient operations.
In hopes of gaining a better understanding of what is truly the best metric for brand performance, we’ve pinned the two best KPIs against one another: NPS and Share of Search.
Let’s take a look at what each of these metrics has to offer.
NPS – Net Promoter System
If you were to ask a group of marketers how they measure marketing, you would find as many different answers as you had marketers. The majority of business leaders have their own set of standard KPIs to measure growth, margins, and efficiencies.
When it comes to measuring growth, there has always been much controversy over which metric is the best number. In 2003, NPS was touted as “the one number you need to grow,” and introduced by Fred Reichheld, a renowned business strategist and partner at Bain & Company. In creating NPS, Reichheld’s goal was to sweep away the clutter, complexity, and length in out-of-date data. Old metrics were to be replaced by an easy-to-understand single-number indication of customer loyalty in business.
Over the years, many took the understanding that NPS scores could be correlated with growth. The idea was that increasing the number of promoters among customers would be followed by growth. The idea was simple, quick, and cheap – not surprisingly, it was very attractive to marketers and analysts alike.
Problems with NPS begin to arise in each recession when no new dollars come to market. In such times, customer satisfaction can still be high, but it will no longer be an indicator of growth. This is because we are looking at the types of answers procured by NPS, rather than the actual volume of people answering the questions beneath the metric. In other words, it’s impossible to survey the volume of respondents necessary to turn NPS into a metric for business growth.
NPS is a suitable KPI for measuring consumer sentiment and overall customer satisfaction. It is not, however, an appropriate metric for measuring the growth of a business over time.
Share of Search
As compared to NPS, Share of Search proves to be a highly-qualified KPI for measuring growth. In a time when we have data in abundance, Share of Search is the one proven data set that links sales and growth – holding an average correlation of 83% across the board.
Share of Search is defined by most marketers as “the volume of search queries for a brand, product, or service as compared to other companies in the same industry.”
The metric provides a simple and effective way to measure growth throughout a specific period of time. If Share of Search increases, operations are effective and likely efficient; if Share of Search decreases, operations are ineffective and there are likely some inefficiencies exposed within.
Share of Search is not only easy to understand, but easy to apply. When it comes to growth, it is quickly becoming the metric marketers and analysts use before all others. Underperformance in this key data set will not only expose marketing inefficiencies, but business-wide operational problems. It doesn’t just define growth, but also helps to put a label on the problems that could impact the entirety of a business if they aren’t dealt with right away.
What is the Best Business Performance Metric: NPS or Share of Search?
NPS certainly proves to be an adequate measurement of growth in consumer sentiment, but it does nothing to accurately portray the growth in a company’s operations. Especially when it comes to growth and effectiveness of marketing strategies, Share of Search takes the cake.
For organizations who want to get their operations aligned, it is crucial to start building a measurement framework for ad spend and brand health via Share of Search analysis.
Share of Search is easy to understand and easy to implement – it’s all about finding the equilibrium: more searches correlates to a growing market. In other words, an increased Share of Search equals increased market share.
Finding the right metric to act as the framework to your business’s operational strategy and forecasting can be difficult. The data-rich world we operate in continues to expand and evolve – because of this, more metrics will surely arise. With that being said, as of now, there is no better metric for measuring growth and marketing efficiencies than Share of Search.