The Net Promoter website describes the Net Promoter Score (NPS) as providing “the single most reliable indicator of a company’s ability to grow.” There has been an on-going debate about how true this statement is and the real value of NPS, particularly for senior executives. To better understand some of what the debate is about, check out this post at Marketing ROI and the posted comments.
I have been using NPS with clients for a couple of years now, and I’m not convinced yet that it is the best indicator of a company’s ability to grow. The real work is figuring out what drives the likelihood to recommend for each business, and then measuring the actual recommendation behavior and corresponding purchase behavior of customers. That is more than a blog post, so on to what you can do right now to get more value out of your NPS work…
As a quick review, NPS is calculated by first asking the following question with a 0 to 10 point answer scale:
“How likely is it that you would recommend (Company X) to a friend or colleague?”
Then you take the percentage of customers who are promoters (10’s & 9’s) and subtract the percentage who are detractors (6’s – 0’s):
% of Promoters – % of Detractors = Net Promoter Score (NPS)
To get additional customer insight, I also pair it with the following question:
“What was the most important factor that influenced your score above?”
What I like to present to senior executives is a summary of the answers to this question from the detractors. Yes, they also get to see the comments from promoters, but they are already aware of this perspective. There is often more value found in reading the detractors’ comments. This tells executives what customers don’t like about their business or products and services. This feedback contains the real voice of the customer, and often they are pretty blunt comments. We all like to know what we do well, and we need to keep doing those things; but real insight, and real growth often comes from improving what is really wrong with a business.