Is It Time to Retire NPS?
Even its inventor thinks it is widely abused by practitioners.
Good morning!
Here are today’s highlights:
The labor shortage continues unabated.
Gas prices are forcing gig-economy companies to pay more for labor.
The Supreme Court’s abortion decision could be a nightmare for businesses.
HUMAN RESOURCES
Want to know what your younger employees are thinking? “They have political views but aren’t interested in talking politics at the office. Some like working from home and others prefer the office, but most agree that they communicate better with colleagues when at the office. They want bosses who give constructive criticism, but some think their bosses are scared of them. ‘They don’t want to hurt feelings,’ a 30-year-old who works in auto sales said.”
“Most of all, they have power, perhaps more than any previous generation their age — and they know it.”
“‘Prior to the pandemic, I think employers thought that employees were expendable and worked for their benefit. And now with the Great Resignation, I feel like it’s kind of turned the tables,’ said a 26-year-old credit analyst.” READ MORE
That labor shortage isn’t going anywhere: “U.S. employers posted a record 11.5 million job openings in March, and some 4.5 million Americans quit or changed positions, matching previous highs, reflecting continued strength in the rapidly growing labor market, where workers continue to have the upper hand. Meanwhile, the number of new hires — 6.7 million — remained steady, according to a report released Tuesday by the Bureau of Labor Statistics.”
“‘Demand for workers remains white-hot,’ said Julia Pollak, chief economist at ZipRecruiter. ‘This is very broad, enormous growth. Even though we’ve almost recovered all of the jobs lost in the pandemic, the labor market just keeps getting tighter and tighter.’” READ MORE
THE ECONOMY
Rising gas prices are crushing the supply of gig economy drivers, forcing companies to pay more: “During a conference call with analysts, Lyft executives cited gas prices and a lingering pandemic as a headwind for driver supply and laid out plans to invest more to increase supply. CFO Elaine Paul referred to the second quarter as a ‘kick-start quarter’ in terms of investments in driver supply.”
“In March, Uber, Lyft, and Instacart added surcharges to customer orders and passed that extra money on to drivers. DoorDash is giving drivers extra cash at the end of each week if they drive 100 miles or more.”
“Another DoorDash program offers 10 percent cash back for drivers who use a DoorDash-issued debit card to buy gas.” READ MORE
MARKETING
Meta (aka Facebook) is offering a new service that gives businesses access to more first-party data: “Meta, today, is announcing the launch of a new suite of digital tools through its free Meta Business Suite platform, aimed at helping small businesses better connect with new and existing customers online and convert them. The tools include a quote-request option on Instagram, filtering of Instant Forms (on-site paid ads that prompt viewers to input their contact information) that may help businesses to pursue leads that are the best fit for their business, and the ability for businesses to send exclusive content via Messenger to customers who opt in via Instant Forms.”
“Businesses will also be able to download leads from Meta Business Suite into their own CRM system.”
“Over the past year, reduced access to user data due to iOS 14.5 has made it more challenging and expensive for businesses to target customers through paid social media advertising.”
“This change has been especially hard on small businesses that don't exactly have the big budgets to spend on broadly targeted social advertising.” READ MORE
It may be time to retire NPS: “Over the last couple decades, [Net Promoter Score] went from a budding idea with some value to an overgrown weed. It's crept its way into every nook and cranny of marketing strategy (and more recently people/HR strategy). Take a look at the Google trends for NPS search terms to see its growth, especially in the last five to seven years.”
“NPS is difficult to understand because it comes with no additional context. The best thing we have is some benchmarking. ‘Hey, at least I'm better than these guys!’ It's the ‘what’ without the ‘why.’”
“If the score stays mostly stagnant over a period of time, it's near impossible to see the impact of your efforts, or conversely, to notice when problems are creeping into your business.”
“Even the inventor of it recently remarked in a Harvard Business Review article that practitioners abuse it ‘by doing things like linking NPS to bonuses ... caring more about their scores than about learning to better serve customers.’” READ MORE
PRICING
Will subscription pricing work for travel? “Music, movies, meals, and even shaving supplies have all successfully been sold by subscription. But should you subscribe to your next vacation? New subscription travel services are on the rise, with offers of discounts, special access and streamlined planning. There are different ways to pay for a subscription plan, though they often involve an annual or monthly fee. The plans themselves may be called memberships, clubs or subscriptions.”
“Scott’s Cheap Flights, for example, sends flight deals of 40 to 90 percent off to subscribers who pay $49 a year, a fee that is often made up in one booking, and, fans say, saves substantial search time.”
“Alaska Airlines’ new Flight Pass charges $49 a month at the entry level, entitling subscribers to six round-trip flights a year. Those $98 trips reflect discounts of 20 to 30 percent on average, according to the company.”
“In 2020, Selina, which offers affordable lodgings — most with co-working spaces — in more than 145 global locations, started CoLive, a $450-a-month plan allowing subscribers to stay for 30 days at up to three locations.” READ MORE
POLICY
Amazon has announced a travel benefit for employees seeking out-of-state abortions: “The $4,000 benefit could potentially allow Amazon’s hundreds of thousands of workers to circumvent those bans by covering the cost of travel to states that protect and allow abortions. The precise details of how that benefit will work, how workers can access it and how the company will go about protecting the privacy of the workers who use it remain unknown because Amazon did not respond to requests for comment and additional information about the plan.”
“While tech companies like Yelp and Bumble will also provide similar travel benefits for abortion access, they employ far fewer workers.”
“More than 1 million people work for Amazon in the U.S., and the majority of those employees work in blue-collar, lower-wage positions inside the company’s massive fulfillment and logistics network.” READ MORE
Tech companies could face a legal nightmare if Roe v. Wade is overturned: “They’re all but certain to uphold state laws that would bring down lawsuits and investigations on people seeking to terminate pregnancies, and in some cases even on those who might transport them to clinics or advertise to them about health care options. That could mean tech companies, which generally comply with legal information demands, could suddenly be helping states investigate and punish people who seek or facilitate abortions, and even those who help them unwittingly.”
“There’s little doubt that consumers will turn to tech they carry in their pockets when they’re seeking abortions. Tech, in other words, will snitch on its users thanks to the data-driven business models it’s spent decades building.”
“After all, once the procedure is outlawed or curtailed in roughly half of U.S. states, law enforcement will take a keen interest in precise data revealing intentions and locations — and not just by those who seek abortions.”
“Facebook may have to decide how it will respond to a subpoena seeking the IP address of an abortion rights group administrator who fundraises. Google might face demands about the identities of advertisers trying to get out information on how to obtain an abortion in states where it’s illegal.” READ MORE
THE 21 HATS PODCAST
21 Hats Will Remain 21 Hats: This week, in episode 106, we start with an update of how 21 Hats has been doing since its sale brought new resources and new ambitions (Spoiler alert: The deal isn’t going great!). Then, Dana White tells Shawn Busse and Jay Goltz about the progress she’s made on multiple fronts: attempting to sell franchises to revive her struggling Midtown Detroit location, to open new salons at Fort Bragg and in Dallas, and to secure financing. The owners discuss Dana’s financing options—venture capital, private equity, bank loan—assessing, in Shawn’s words, their “degrees of evil.” Plus: Shawn explains how his views on remote work have been evolving, and Jay explains why he’s tired of being called a tyrant (even though no one’s actually called him that).
You can subscribe to the 21 Hats Podcast wherever you get podcasts.
If you see a story that business owners should know about, hit reply and send me the link. If you got something out of this email, you can click the heart symbol, you can click the comment icon below, and you can share it with a friend. Thanks for reading, everyone. — Loren