NPS (Net Promoter Score)?
The Net Promoter concept was created by Fred Reichheld as a lead predictive indicator of a brand’s future sales performance. It is based on one simple question: ‘How likely are you to recommend Brand X to a friend or colleague?’ It asks respondents to put themselves on a 10-point scale where 10 is ‘highly likely’ and 0 is ‘not at all likely’. The NPS is then calculated by counting the percentage scoring 9 or 10 out of 10 (these being called Promoters) and subtracting the percentage who give a score of 0-6 (Detractors). Those sitting in the 7-8 category (Passives) are excluded from the calculation.
What are the aims of NPS?
It provides a single metric that the company can rally around. As such it is particularly liked by senior stakeholders. Brands such as Apple, First Direct and John Lewis are recognised as advocates of the NPS approach, with their scores often being cited as targets for other brands to aspire to. Critics of NPS point to the fact there is little evidence that higher scores lead to sales growth, nor that it is any more effective than traditional satisfaction-gauging methods.
How is NPS research undertaken?
Whilst the theory of NPS is easy, using the technique to drive positive change within organisation can prove difficult. Here’s some top tips for setting up a programme:
Find ways of obtaining feedback as soon after a consumer touchpoint experience as possible
Gain statistically robust sample sizes – which is usually easy for most touchpoints except for those at an individual store level (especially for brands with lots of small stores)
Keep questionnaires short – so that customers are willing to fill them in on multiple occasions
Make sure the survey is mobile-friendly – at least half of consumers are likely to complete it this way
Ask the NPS question at the start of the survey so that ratings are not influenced by any other questions
Make sure that a ‘why did you give that score?’ open-ended question is asked immediately after the NPS one
Ask for a maximum of 8-10 attribute ratings – so that the dimensions which are the principal influencers of NPS can be tracked
For those giving low scores, include a callback component that provides a service-recovery opportunity
Try to drive improvement by adopting a ‘bottom up’ and ‘top down’ approach i.e. encourage everyone to do their bit to achieve incremental gains while also implementing joined-up actions, across multi-functional teams, to make step-change progress
What’s an example of NPS in action?
ABA operates many NPS programmes for leading retailers – click here to learn more about our work with Camelot and John Lewis.
What is NPS?