January 23, 2015 /
Comments Off on Be careful with Net Promoter Score

Be careful with Net Promoter Score

Are you customers loyal? Do they drive business? Most organisations fret over this question.

Companies obtain their Net Promoter Score by asking customers a single question on a 0 to 10 rating scale: “How likely is it that you would recommend our company to a friend or colleague?”

Based on their responses, customers can be categorized into one of three groups: Promoters (9-10 rating), Passives (7-8 rating), and Detractors (0-6 rating). The percentage of Detractors is then subtracted from the percentage of Promoters to obtain a Net Promoter score. A score of 75% or above is considered quite high.

There is a reasonable definition of Net Promoter Score (NPS) in Wikipedia at http://en.wikipedia.org/wiki/Net_Promoter (On which the above definition was based).

So it’s simple, easy to collate, and even easier to communicate to staff. But let’s look further. I am a Qantas frequent flyer with high status and rarely buy my own ticket (because most of my travel is business). Would I recommend?

Well, first ask yourself some questions.

Who would I be recommending to? My budget conscious parents or my CEO peer group?

Would I be treated the same as others? I know I’m treated better because I fly more often.

Would you recommend you favourite nightclub to your family? Although you love the nightclub, you might not want your family there.

If you are a Bank Manager, is it fair that your NPS is largely driven by Head Office policies which affect your customers? You might have given awesome service deserving of a 10 score, but your customer’s loan may have been unceremoniously declined by a computer program over a minor technicality.

It’s all about context. The moment you need to clarify context, the simplicity is lost. By all means, use NPS as part of your service matrix but not as the sole tool. And keep the salt handy, you may need a grain.

(The video below is from a few years ago, still relevant)

Should You Use a Net Promoter Score? from Steven Di Pietro on Vimeo.