If your customers don't talk, NPS is a vanity metric.

Word of mouth is a hell of a growth lever, but only when it works. It’s now become almost universal to send your customers an NPS survey and—hopefully—use your scores in the high 80s to show how well you’ll grow organically. Truth is, this only works if your customers actually talk to one another and if the problem you solve is something they’d discuss.

Sometimes, your users just don’t interact. There are plenty of B2B tools for which two users are very unlikely to know each other. They might be small teams in big companies or the kind of customers that leave for the day and don’t think about work things until the next morning. In cases like these you’re going to have a hard time running a referral program and risk wasting time and money trying to incentivize one. Customers may love your product but if they don’t know anyone worth telling NPS is a vanity metric.

In a similar vein, sometimes products just aren’t the kind of thing you recommend. I’ve used my fair share of sales CRM tools but unless someone I know was very specifically looking for one there’s no way I’d bring it up. Here I think it’s important to be realistic about what I’d call prompted referral and unprompted referral.

If someone goes out of their way to tell you about a product based one a weak thread in the conversation, you’ve got a good chance at rapid organic growth. It is also a lot more valuable than prompted referral.

For a promoted referral you might get asked for recommendations and shoot back whatever product comes to mind. This is still a good outcome for your product, but in this situation your growth factor has a bottleneck based on how often a potential customer is seeking a new solution.

Take the sales CRM example. You may ask for recommendations when you first pick one or when a renewal is coming up. Beyond that you probably aren’t out in the market seeking alternatives.

There’s a lot of similarities here to search and display ads. Search ads work well if your customers are out looking. The customer has high intent and conversion should be better. This comes at the cost of top level numbers. Unless your customers seek out your niche, they won’t see your search ads. Display ads are the opposite, you can show them to a lot of people but they need to be much more compelling to generate a click because you need to both communicate the problem and hint that you can solve it.

Working out if your customers talk to each other isn’t all that difficult. The easiest approach I’ve taken is to just ask them. Send out your NPS, ask anyone who gave a 9 or 10 to make an introduction. Don’t be a pest about it. If nobody does then your NPS is probably better thought of as a customer satisfaction score than an indication of actual organic promotion.

This works best when you talk to your customers somewhat regularly and directly. If they’ve only ever engaged with your product individually and then you, as a person, ask them to hand over details of a potential relationship that can be jarring. If you’ve got a sales team or account manager this is a little easier.

If it turns out your customers don’t talk to each other or wouldn’t bring up the problem you solve then save your resources. There are plenty of ways to grow a product. Investing in referral programs that don’t pay back is time and money better spent on other growth levers. There are many well run businesses that don’t have referrals as a major driver of growth.