Why Net Promoter Score Doesnt Work for Suppliers
Author: Alan Day, Chairman and Founder
Procurement leaders increasingly speak of strategic partnerships, mutual value creation, and becoming the “customer of choice.” Yet many continue to use tools designed for measuring consumer satisfaction to assess these complex business-to-business relationships. Chief among these is the Net Promoter Score (NPS) a metric whose simplicity is its strength in customer markets but a flaw when applied to supplier relationships.
Originally developed in 2003 by Fred Reichheld, the Net Promoter Score was intended to offer a simple, intuitive way to measure customer loyalty. Its core premise is deceptively straightforward: ask customers one question “On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?”
Based on their answers, respondents are grouped into:
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Promoters (9–10): Loyal enthusiasts likely to repurchase and refer others.
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Passives (7–8): Satisfied but unenthusiastic customers vulnerable to competitive offerings.
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Detractors (0–6): Unhappy customers who may churn and damage the brand through negative word of mouth.
The Net Promoter Score is calculated by subtracting the percentage of Detractors from the percentage of Promoters. The resulting score a number between -100 and +100 is used by organisations as a proxy for customer loyalty and, in theory, long-term business growth.
Why Organisations Use NPS
The appeal of NPS lies in its simplicity and scalability. It allows executives to track sentiment over time, benchmark performance across business units, and set targets. In consumer-facing sectors like retail, telecommunications, and banking, where customer volume is high and interactions are relatively transactional, NPS has proven to be a useful bellwether of customer experience.
The business logic is straightforward: high NPS equals loyal customers, which in turn drives retention, repurchase, and positive word-of-mouth, ultimately leading to increased profitability. As such, NPS is not only monitored but often baked into executive KPIs, marketing campaigns, and annual reports. So why not use it in procurement, to measure how suppliers feel about working with your organisation?
Because supplier relationships are fundamentally different from customer relationships. And because the power dynamics, incentives, and commercial realities involved in procurement make NPS not just ineffective, but actively misleading.
The Power Imbalance in Supplier Feedback
When a company uses NPS to ask its suppliers how likely they are to recommend it, the underlying assumption is that the supplier will answer honestly and without fear of repercussion. This assumption does not hold.
In the supplier relationship, it is the buyer who controls the purse strings. It is the buyer who usually determines contract length, commercial terms, and future business opportunities. For many suppliers, (especially in markets with few large buyers) their livelihood may depend on maintaining that relationship. A low score, even if submitted anonymously, could be interpreted as criticism. In small supply bases or categories where there only one or two suppliers, identities are easily inferred.
This creates a powerful disincentive to provide honest feedback. Suppliers, fearing the loss of business or the souring of a relationship, are likely to inflate their scores. In doing so, they turn the exercise into a ritual of appeasement, a tick-box task that fails to surface the real issues affecting performance, collaboration, or risk.
The result? Artificially high scores that provide a false sense of security. Buyers may believe they are seen as strategic partners when, in reality, they are viewed as difficult, slow, or transactional.
Why NPS Fails in Supplier Management
Beyond the power imbalance, there are several reasons why NPS is ill-suited to assessing supplier relationships:
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It’s one-dimensional. Reducing a multifaceted, strategic relationship to a single score or even just a few scores strips out context, nuance, and actionable insight.
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It lacks specificity. NPS doesn’t identify why a supplier might recommend or not recommend the buyer, or what the buyer can do to improve.
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It reinforces the transactional. Asking if a supplier would “recommend” a buyer mis-frames the relationship. The goal is not popularity, it’s partnership.
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It encourages gaming. When NPS scores are tied to procurement performance metrics or executive dashboards, internal teams may pressure suppliers to respond positively.
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It misses what matters. NPS fails to measure behaviours that drive supplier performance, innovation, and loyalty, the core of any customer-of-choice ambition.
In short, NPS is built for buyers measuring sellers NOT the other way around. Supplier relationships require deeper listening, better diagnostics, and a fundamentally different approach to feedback.
Better Alternatives: Voice of the Supplier, 360-Degree Reviews, and Supplier-Led KPIs
To understand how suppliers truly perceive their relationship with the organisation — and to act on that insight — procurement needs a different set of tools. Three techniques offer a more robust alternative to NPS: Voice of the Supplier, Supplier 360-degree reviews, and Customer KPIs.
Voice of the Supplier (Customer of Choice)
At State of Flux, Voice of the Supplier and Customer of Choice are two sides of the same coin. Together, they provide a structured and strategic method for understanding how suppliers view your organisation across the dimensions that matter.
Rather than asking for a single score, Voice of the Supplier gathers qualitative and quantitative feedback from stakeholders across representative sample of supplier’s from Direct to indirect, from highly risky to transactional. It covers areas such as:
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Create Value
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Protect value
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Key to this is the Customer of Choice ranking: so not just how you score, but how you score relative to the suppliers’ other customers. Through this you are determining why would the supplier prioritise you in a crisis? Invest in new solutions for you? Allocate their best talent to your account? Give you scarce resources or bring you their latest innovations first.
Crucially, this process must be facilitated by a third party to ensure anonymity, encourage honesty, and provide comparative benchmarks.
Unlike NPS, the Voice of the Supplier is not a vanity metric. It highlights real gaps in perception, identifies opportunities for improvement, and builds trust. It is not about “being liked”, it is about being chosen.
Supplier 360-Degree Review
While the Voice of the Supplier focuses on the supplier’s view of the buyer at a strategic level, the 360-degree review evaluates the perception of the relationship from both sides at a single supplier relationship level. It is recommended that these are only run for either the most strategic relationships, very complex relationships (where the supplier may also be a customer, a competitor or a partner as well) or where a relationship is going wrong. It is built on two core dimensions:
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Trust attributes openness, honesty, mutual respect, responsiveness
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Control attributes clarity of roles, alignment of goals, governance, performance management
This dual-lens approach reveals not just how each party feels, but how well they understand each other. Misalignments are common: buyers may believe they are collaborative, while suppliers perceive control-heavy behaviour. Or suppliers may think they are high-performing, while buyers disagree.
By examining both perspectives, the 360-degree review promotes dialogue, resets expectations, and strengthens the foundation for joint success. Typically, this is used as a key input into Joint account planning with the supplier.
Customer KPIs (Supplier-Led Feedback)
A third approach flips the traditional performance model. Instead of only evaluating suppliers, the organisation invites suppliers to measure it against agreed customer performance indicators, such as:
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Accuracy and timeliness of forecasts
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Speed and clarity of approvals
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Payment reliability
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Quality of briefs or specifications
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Responsiveness to issues
These KPIs are specific, measurable, and tied to day-to-day interactions. They are less subjective than NPS and more actionable. A supplier that consistently flags late payments or shifting forecasts highlights a clear area for improvement, with direct implications for cost, service, and risk.
By embracing supplier-led KPIs, procurement teams show a willingness to be held accountable, a hallmark of mature, strategic relationships.
Move Beyond the Score
Net Promoter Score may have its place in customer marketing, but it has no meaningful role in supplier management. It oversimplifies, misrepresents, and, too often, misleads.
If procurement teams truly want to be seen as strategic partners, if they wish to build trust, unlock innovation, and create long-term value, they must ask better questions. That means moving beyond “Would you recommend us?” to “How are we doing and how can we do better?”
Voice of the Supplier, 360-degree reviews, and supplier-led KPIs provide the tools to ask those questions, and to act on the answers. They are more complex than NPS. But so are the relationships they are designed to serve.