You are online, you have decided what to buy, struggled through the checkout process with card verification, delivery charges and a delivery address and then a pop up asks you ‘how likely you are to recommend our company to a friend?’ Your answer gives the company its Net Promoter Score (NPS).
The concept behind the NPS is that you are either a promoter for the business, a detractor or a neutral. The validation for the score suggests that the promoters will do more than just tell a friend about the business, they are likely to exhibit more loyalty to the company, buying more over a longer period. The detractors, on the other hand, have the potential to damage your business and are likely to move on to another business. So overall the NPS measures the health of the business through a combination of customer satisfaction and potential business growth.
Measuring your NPS is easy. It looks at how many of your clients are going to be active advocates for your business and compares that to the number of clients who, at best, are unlikely to return and, at worst, will actively detract from your business. The question ‘How likely are you to recommend the business to a friend’ is rated on a scale of zero to 10.
Promoters score nine to 10. This is a deliberately high threshold to ensure that it only picks up those clients who are exceptionally enthusiastic about your business.
Passives score seven to eight. These are the clients who, while satisfied with your business, are not the active advocates that the promoters are and they may lack some of the loyalty of the promoters and be swayed by offers from other businesses.
Detractors score zero to six. The detractors are those clients who are unhappy with your business and unlikely to return. They can be dangerous to the business and cause damage by spreading negative reviews and comments about the business.
Your NPS is simply the percentage of promoters minus percentage of detractors.
If we assume the response rate to your survey is 100 people, 35 are promoters (scoring nine or 10), 50 are passive (seven or eight) and 15 are detractors (scoring under six).
The NPS is 35% minus 15% = 20
As you can see it is possible to have a negative NPS. A positive score is considered to be good and over 50 to be excellent. However, there are some very strong arguments that dispute the value of an NPS.
As you can see from the example we looked at above, you could maintain an NPS of 20 with 21 promoters and one detractor or 60 promoters and 40 detractors. The NPS alone does not acknowledge the number of people who are satisfied without being active advocates. It is also unable to distinguish which factors have made your clients more or less likely to recommend your business.
Other arguments are that the scale is totally arbitrary, there is no proof that nines and 10s will go out and promote your business/product and that the zeroes to sixes will run your business/product down. It is not transferable. You cannot compare your NPS score with a business in a different sector in any meaningful way and it is not actually measuring behaviour. It does not ask if you have recommended our business to a friend, which would make the result more predictive.
However, despite these drawbacks it is still a very useful tool. It gives you a baseline of how you are doing and, by measuring it over time, you can compare how your business is doing, do your clients feel better or worse about your company than they did yesterday, last month or even last year?
Although initially a web tool, NPS surveys are now being used in store by some companies either in paper based surveys or asking people to go online when they return home, often with an incentive such as a prize draw or a future discount. Doing this will allow you to immediately see if changes and tweaks have affected your client base, for instance has the expensive refit made your clients feel better about the practice, or has the new member of staff changed attitudes?
If you do decide to do this it is worth considering adding one or two open questions to your NPS survey. This will allow you to discover why you were given the score that you were. Simply adding ‘How could we have improved your experience today?’ and ‘Would you like to make any other comments?’ increases the value of the NPS survey dramatically. It allows you the opportunity to change passives into promoters but, more importantly, change detractors into passives. The whole point of feedback is that it leads to change.
The main reason that this approach is rarely used online is that results that produce qualitative data cannot be automatically assessed. It is an important point that this type of data needs oversight and introduces the risk of observer bias during analysis and implementation.
As with all business tools there are drawbacks to the Net Promoter Score, but used with an awareness of these weaknesses it provides an invaluable tool to canvass feedback. It is quick and easy to use and analyse and, more importantly, it is quick and easy for your customers to complete. With the addition of open ended feedback questions, it can drive your business and monitor the results.
