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Mon Oct 5 2009 00:46:29

Pain from Bain? eBay Introduces Net Promoter Score

By: Ina Steiner

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eBay revealed in May that it was testing a new feedback system based on Bain & Company's Net Promoter Score (NPS). That might explain why eBay recently changed the way it looks at DSRs. eBay's system had sellers focusing on getting 4.9s and 5.0s on their Detailed Seller Rating criteria, which are ratings on scale of 1 - 5 left by buyers to indicate their satisfaction with transactions. High scores meant discounts on fees and greater exposure in search results.

With last week's rollout of the Fall Release, it's no longer necessary for sellers to focus on getting high scores - instead, they must avoid getting ratings of 1s and 2s in order to qualify for eBay's new Top Rated Seller program. eBay's current thinking on customer satisfaction may be why.

First, some new vocabulary: Net Promoter Score, Detractors, Passives and Promoters.

eBay CEO John Donahoe's former colleague at Bain & Company, Fred Reichheld, developed something called the Net Promoter Score to measure buyer satisfaction and predict buying behavior. The higher the score, the better. Customers who say they would recommend a company by rating them 9 or 10 on a 10 point scale are "Promoters." Those who give a score of 7 or 8 are "Passives," and those who give a score of 0 to 6 are "Detractors." 

The Net Promoter Score is calculated by subtracting Detractors from Promoters.

Here's what eBay had to say about Promoters and Detractors, from NetPromoter's blog summarizing eBay's presentation at its conference:
Using predictive modeling - these analytics let you predict the score someone would give you based on others like them. They look at core data like dollars spent each month, churn rate, etc. in each case Promoters had better numbers. In some cases while you may not see spend increase with top promoters, you may see churn reduce. The largest lifts come from moving Detractors towards Promoters, for eBay it means moving Detractors to Passive will bring the greatest results. The critical thing is to look at customers that are detracting and really focus on why

Thus, eBay seems to be saying that avoiding low scores is more beneficial than trying to garner high scores.

The DSR's current 1 to 5 rating system does not translate exactly into NPS, but eBay has been testing a new feedback system that asks buyers if they would recommend a seller using a scale of 1 - 10. Monday's Newsflash newsletter has more information about the Net Promoter Score and eBay's testing of feedback.




Comments (80) | Permalink

Readers Comments

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: Simon

Mon Oct 5 01:15:18 2009

LOL completely idiotic...now you have a 60% failure rate..

eBay why don't you just close down if you have so little faith in the sellers that generate BILLIONS of dollars in your profits; it's time to go…your view of your customers is plainly sick

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: Kip

Mon Oct 5 01:21:51 2009

The question "How likely are you to recommend the seller to a colleague or friend" scares the heck out of me. I know what eBay's trying to get at with that question, but suppose I buy an X-rated video. I might have gotten great service from the seller but wouldn't recommend the seller to anyone. Or maybe I buy some scrapbooking supplies but I don't know anyone else who does that. Basically, buyers might not be likely to recommend a seller for many reasons that have nothing to do with whether a seller's performance.

Many buyers respond to questions literally - that's why many buyers rate free shipping as a "3" on the 5-point dsr scale. eBay asks buyers to rate the reasonableness of the shipping charge - since there is no charge, some buyers rate it a 3(neutral).

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: Patricia

Mon Oct 5 01:34:03 2009

Just another Ebay employee looking for some job security at the expense of the good old seller pool.  Hey, just kick em around the sellers are a desperate group feel they have no place else to go so they'll take it and come back for more!  I really have to laugh because now its very evident that its the sellers who perpetrate nonsense like this...they kick, scream and complain but they KEEP ON LISTING! In the end, so much blame has to be settled right on the sellers' shoulders.  Sorry, but that's how I'm seeing it all.  Ebay has employed so many useless individuals who are trying to make themselves important by leveling ridiculous policy and baloney like this on the seller pool...because they know the sellers will take it!  None of this garbage is necessary and any logical thinking adult just has to laugh at the foolishness of it all!

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: eBuyer Feedback

Mon Oct 5 02:09:21 2009

The problem with the ''How likely are you to recommend the seller to a colleague or friend'' question is that I don't have any colleagues or friends that would want what I just bought.  Therefore it would be pointless for me to recommend the seller as I'd only be wasting their time.  Definitely not something I'd want to stress a friendship or job over.  Plus anytime I do recommend something to someone they always seem to be under the impression I'm trying to benefit somehow.

Also if you are a competitor why on Earth would you recommend them to a friend?  But does answering that question honestly break ethics?

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: matza

Mon Oct 5 02:50:10 2009

John Donohoe has promoted more negative word of mouth on the street and damage to the ebay name more than any seller could ever dream of causing.

Not even if the entire population of China were selling their poison lead laden, child labor produced trinkets on the site.

A lot of the population of China is already selling poison junk yet still Donohoe outranks them when it comes to pure hatred spewing out wherever you may be.

9 out of 10 people hate ebay now and it has nothing to do with any sellers.

I wouldn't be at all surprised to turn on CNN one day and hear a tragic story about Donohoe being ambushed by an angry mob of ex-ebay sellers.

His disruption is well past the point of pure absurdity now.
The site was making billions of dollars the way it was so I can't understand what was so stupendously wrong they had to go and bulldoze it into the piece of utter garbage it is today ????

Sellers have had it and are not going to hang on any longer. The site is a nightmare for buyers too. Always changing it's tiresome and I'm glad I'm out. I had all I could take in 2008 I'm not going through the sheer stupidity any longer.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: Anne

Mon Oct 5 03:15:44 2009

Most buyers are not going to take the time to fill out this form.  If a buyer has bought lots of items don't think they are going to take the time to fill this out for every purchase. I do sell on ebay from time to time, however, most of my efforts are now on other sites. No emotion left for ebay, it is just a business decision, if it sells fine, if not I know it will sell on one of the other sites.

I have sold on Tias and GoAntiques for almost two years now with very good results.  I am in the process of adding all my inventory to ECrater and Bonanzle and will also be listing some of my inventory on Etsy.

ECrater is now receiving very high placement on Google as are GoAntiques and Tias, also am seeing some Bonanzle items when I do a spot check search for my items.  I know a lot of people complain about lack of traffic on other sites but it takes sellers to build a site. Granted things may not sell as fast but I get full price with very little expense.

I have not heard one good thing about Ebay from anyone in the last two years and I am not talking about sellers, I am talking about buyers.  Just last week my neighbor said she had paid and never received her purchase.

I think if this new feedback system is added, customers will just stop leaving feedback, a lot of them don't anyway as it is.  But then again that may be just want Duh Ho wants, sellers don't get discounts if buyers don't leave feedback.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: nora

Mon Oct 5 04:47:27 2009

The question reads;
''How likely are you to recommend to a colleague or friend?''

'WHAT' you are grading the recommendation on? This question is not clear.

Is it the eBay site itself (such as the easy of use, check out or the multitude new changes).  Is it solely the experience with the Seller? Or is it the item you just bought?

The question is not specific, open-ended and vague.

I don't see where it says to grade 'the seller; it could be anything, so it is meaningless in its present form.

If it’s a one time item you bought, why would you recommend the Seller? Some sellers sell a variety of things and if a Buyer is shopping for something specific then they would buy from anyone who has it.

If it’s the eBay site, the Seller shouldn’t be held responsible.

If it’s the cool new ear buds, you can get them from anyone in China cheap.

This question could lend itself to misinterpretation and would not be accurate in scoring a Seller.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: Marvin

Mon Oct 5 06:41:35 2009

Net Promter should do a survey on ebay to determine their score before getting involved with them. Send out questions to all ebay users. Bet they wouldn't like the results. Every company that associates itself with ebay ends up with their reputation in the sewer. If Bain & Company knew what they were doing they wouldn't be tying their name to ebay.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: speckles

Mon Oct 5 07:45:13 2009

'Net Promter should do a survey on ebay to determine their score before getting involved with them.'

Seriously. eBay is the kiss of death to anyone who links with them.

I guess I'm no longer 'noise' but a proud eBay 'detractor'.

Too bad instead of 'How likely are you to recommend to a colleague or friend?' is doesn't ask How likely are you to recommend eBay to a colleague or friend?'

That way, eBay would know that even though I found a great seller and gave them high marks, I still won't recommend anyone shop on eBay. Ever.





Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: nice info

Mon Oct 5 07:46:08 2009


Nice info, now I can become an eBay net promoter buyer and still leave a negative and ding DSR's with all one's and in eBay eyes be a great welcomed buyer and eBay net promoter...just friggin terrific.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: NYM Arts

Mon Oct 5 07:47:16 2009

That's IT.
Que the EMBALMER.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: ozgood

Mon Oct 5 07:49:02 2009

Posted: February 26, 1996,
To: eBay Community

I launched eBay's AuctionWeb on Labor Day, 1995. Since then, the site has become more popular than I ever expected, and I began to realize that this was indeed a grand experiment in Internet commerce. By creating an open market that encourages honest dealings, I hope to make it easier to conduct business with strangers over the net.

Most people are honest. And they mean well. Some people go out of their way to make things right. I've heard great stories about the honesty of people here. But some people are dishonest. Or deceptive. This is true here, in the newsgroups, in the classifieds, and right next door. It's a fact of life. But here, those people can't hide. We'll drive them away. Protect others from them. This grand hope depends on your active participation. Become a registered user. Use our feedback forum. Give praise where it is due; make complaints where appropriate. For the past six months, I've been developing this system single-handedly, in my spare time. Along the way, I've dealt with complaints among participants. But those complaints have amounted to only a handful. We've had close to 10,000 auctions since opening. And only a few dozen complaints.

Now, we have an open forum. Use it. Make your complaints in the open. Better yet, give your praise in the open. Let everyone know what a joy it was to deal with someone. Above all, conduct yourself in a professional manner. Deal with others the way you would have them deal with you. Remember that you are usually dealing with individuals, just like yourself. Subject to making mistakes. Well-meaning, but wrong on occasion. That's just human. We can live with that. We can deal with that. We can still make deals with that. Thanks for participating. Good luck, and good business!

Regards,
Pierre Omidyar

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: matza

Mon Oct 5 08:04:49 2009

I just purchased a very nice colon cleanser I would like to recommend the seller to all my friends. I'm giving a presentation at a brunch later today I will surely announce it to all in attendance.

quite an incredible collection of complete idiots that work at ebay. I'm stunned these morons get paid.

Meanwhile both bonanzle and ecrater's traffic ranks are climbing up the charts.
Amazon is going to have a banner holiday shopping season and ebay is in the usual constant state of change for the worse.

Donohoe is frustratingly STUPID.

If he is married can you imagine what his wife has to put up with?

GOOD LORD!!!

You'd think ebay was Nasa or something with all this scientific experimentation constantly going on!

Who knew selling a simple widget online had to be so convoluted and complicated?

There is no way in hell any sellers are going to survive in 2010 and the ones that stay for holiday 2009 sales are going to be very disappointed they did.

Donohoe has handed all ebays loyal customers both buyers and sellers over to Amazon and others on a disrupted silver platter.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: matza

Mon Oct 5 08:11:07 2009

we all do need to start blaming mr. Pierre Omidyar  too. Now that we all made him rich he has shown his true colors. He never cared about anything but the money. For him to sit back and watch this TYRANT Donohoe stomp on everyone's years of hard work makes him just as bad.

ODY AND HOE ARE ONE THE SAME!

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: kimbers

Mon Oct 5 08:16:01 2009

Perhaps a Net Promoter Score needs to be used to determine the compensation that JD and the rest of the braintrust at eBay receive?

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: Karma

Mon Oct 5 08:19:00 2009

AHA - still trying to turn a neutral into a negative!

I am for one always click on neutral - 'cause who am I recommend the site to? I do not discuss with my friends what I by where. It simply never comes up in a conversation. It does not mean that the place I chopped at is "bad", it just means that its neither here nor there where I by it. "It" can be found all over the net.

I bet another mayor feedback change will happen next year....

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: Pat

Mon Oct 5 09:39:23 2009

@kimbers said:
Perhaps a Net Promoter Score needs to be used to determine the compensation that JD and the rest of the braintrust at eBay receive?  

They do - employee compensation is tied to this NPS. Where do you think this brainstorm came from? They're simply going to apply it to sellers now.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: Rich

Mon Oct 5 10:21:04 2009

KISS (Keep it simple stupid) is always best. Remember the good ole days of buggy whips and ''positive, neutral and negative?

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: dazed&confused

Mon Oct 5 10:46:51 2009

It amazes me how much trouble those at Ebay are doing to get rid of sellers. This past year I have changed all listings to BIN with Immediate Payment Required. It's the only way I could get paid since I was filing way too many NPB's. Today I had a buyer purchase an item and then after she paid she wanted me to refund her the difference in shipping-I ship everything Priority with DC confirmation-I told her she should have read my terms before buying-I don't give refunds on shipping-I'm sure I'll get a negative for no reason other than she didn't read my terms. This is what Ebay has come to-the sellers have no rights. It's a shame it has come to this.

Pain from Bain? eBay Introduces Net Promoter Score   Pain from Bain? eBay Introduces Net Promoter Score

by: RicRoe

Mon Oct 5 11:24:51 2009

John Donahoe is apparently oblivious to the fact that eBay would receive  1's from their buyers and sellers given the changes brought under his so called leadership.

Donaho'e & Co's seller extermination plan was not proceeding as quickly as JD desired thus the change in the way they look at DSR's.

Sellers would be wise to continue making sure they receive high average DSR ratings, given that Donahoe & Co are unable to remain focused or consistent.

Changing seller focus by driving them to avoid 1's & 2's  instead of maintaining higher average DSR scores is intended to encourage sellers to let their averages slip.

Once sufficient numbers of sellers have allowed their averages to decline, Donahoe & Co will again change focus and look at average DSR scores so they can beat up more sellers.

This management team is unable to remain focused on any one concept or any one goal.

Their haphazard management style is interpreting statistics one way today, another way tomorrow, and will likely change back and forth as they see fit.

There is no logic or coherency to their plan.

This is what eBay gets for hiring a neophyte CEO who has no concept of the basic fundamentals upon which eBay was built or those which drove eBay to once be the most successful online marketplace.

The constant tinkering by Donahoe & Co have supposedly been implemented as part of a plan which would bring back buyers to eBay.

Thus far, all I see is continually declining sales, business models changed to hide the lack of success, and continued alienation of the class of sellers that bring the merchandise buyers once flocked to eBay in search of.

eBay's declining sales can be attributed to one factor... incompetence of current management.




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