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Net Promoter Score Programs 101

Net Promoter Score Programs 101

Net Promoter Score℠ programs are based on the research undertaken by Satmetrix to identify which single satisfaction measure was the best predictor of business growth. It turns out that the best measure is advocacy. NPS® surveys are therefore designed around the following question.

“How likely are you to recommend [insert brand] to your friend/colleagues?”

The answer is given on a sliding scale from 0-10 with 0 = Highly unlikely and 10 = Highly likely

NPS Simple Calculation

 

The people that select 0-6 are Detractors, 7-8 are Passives or Neutrals and 9-10 are Promoters.  The Net Promoter Score is calculated as the % of Promoters less the % of Detractors and is expressed as a % score. The higher the better.

You can ask this NPS question based on a particular event (e.g. a transaction, or call centre contact) or the overall relationship with the brand.  The event based NPS will fluctuate more than the relationship based NPS.

In addition to the NPS question, it is important to gather information about why the customer gave that score. This can be in the form of comment boxes where the customer can write as much as they like – positive and/or negative. Another option is to provide tick boxes or Agree-Disagree sliding scales based on the main business drivers (such as Price, Location, Service, Range etc).  You can even co-create with your customers to create the best survey design – see this white paper for more information

Text analytics technology can be used to understand the underlying themes and sentiment in the comments (without manual reading) – see the blog Text Analytics 101 for more information.

The time it will take to generate a reliable database of responses will depend on your type of business (B2C, B2B etc).  We generally recommend that you have a sample of at least 200 for any analysis you are performing – that means that if you are comparing a list of stores, or service agents, you will need at least 200 responses from each one to find the results reliable.

The most important (and definitely the most challenging) part of running an NPS program is the ability to turn the feedback into an action plan for your business. First, you need to understand the root causes for your problems. Maybe you need to restructure your business, open more locations, run more staff training etc. Whatever, the outcome you need to have a plan in place to close the loop with the customer and act on their feedback.

Finally, it is important to measure the ROI of your NPS program.  Consider what you are spending on the surveys, the database hosting, text analytics, analysts etc. Then calculate the real gains you have made as a result of the program by comparing to a control group. This could be a group of customers (e.g. customers in NSW) that have been excluded from any new initiatives that are a result of NPS insights – so you can know the true impact of your improvements in the other areas. If this is not possible, you can use the pre-NPS period to compare to the post-NPS period.  This is less accurate because many other factors that are influencing customer satisfaction simultaneously.

If the gain in customer value is greater than the cost of the program, you can rest easy that you are on the right track.

 

Net Promoter, NPS, and the NPS-related emoticons are registered service marks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld
Image credit: http://www.netpromotersystem.com/about/measuring-your-net-promoter-score.aspx

NPS Accredited Insights Consultant

Sue is an NPS Accredited Consultant, with 20+ years of experience in customer insights from marketing agencies and data consultancies including George Patterson, TBWA GGT/Tequila and Dunnhumby. Sue has experience in many industries including retail, telecommunications, financial services, and automotive. Sue shares her breadth of experience and wealth of knowledge in her blogs and as an Insights Consultant for Resonate Solutions.

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