Tracking Net Promoter Scores
By now just about everyone in the worlds of marketing, advertising, branding, research, consulting, and probably a handful of other industries and businesses have at least heard of the ‘Net Promoter Score.’ Anyone who hasn’t heard of it is certain to ask, in an upcoming meeting with the ad agency or marketing department, “What does NPS mean on this chart?”
The answer is pretty simple. There was a growing recognition that measuring satisfaction on its own wasn’t enough of a sign of client loyalty. NPS was developed to attempt to show that loyalty. It was first developed in 1993 by Fred Reichheld and later gained more widespread recognition from Bain and Co and Satmetrix in the early 2000s.
The theory behind NPS comes from the belief that a customer’s likelihood to recommend a company to colleague or friend is the best way to determine how loyal they are. So it is asked simply… On a scale of 0 to 10, how likely are you to recommend a company.
Anyone who answers 9 to 10 are “promoters.” Anyone answering 7 or 8 are “neutrals.” Finally anyone answering 6 or lower are “detractors.” The score is then calculated by getting rid of the neutrals, then taking the percentage promoters and subtracting the percentage of detractors. This creates a score ranging from -100 to 100. That is the Net Promoter Score.
There's been a lot of hype and perhaps some undue optimism behind the Net Promoter Score. It has been hailed as a sort of holy grail for consumer satisfaction. It’s also been maligned as a complete waste of time by skeptics. While both sides are being be hyperbolic, we think that NPS does have a lot going for it.
First, it’s easy to calculate. We don’t value that because it makes our work easy (we actually like doing the hard calculations!), rather it makes the work of presenting findings to folks outside the marketing and advertising worlds easier. It’s easy for outsiders to grasp the concept, the question, and the results. This makes them more likely to trust the findings.
It’s also a good top-line encapsulation of all the elements of a customer’s experience with a brand or company. We know there are many facets to what makes the best customer experience and NPS doesn’t have anything to say on individual parts of the experience. But in this single step we can see a metric that covers the complete client experience - both physical and emotional.
Which is why the third reason we like it is most important. It’s a metric that is most valuable over time. Tracking NPS and seeing the changes as new initiatives and improvements are made in a company matters.
We believe that the best CX and Brand Planning projects are approached through a series of incremental changes - Learning, developing, implementing, and studying changes, then repeating that cycle to create continual improvement. When that approach is taken, it’s sometimes easy to get lost in the details and ignore the big picture.
Many claim the biggest single drawback of the NPS approach is the lack of insight into the details. We think that by tracking the big picture, we can see detailed causes and effects better.