The Net Promoter Score goes back to Brain & Company’s article “The One Number You Need to Grow.” This article introduced the NPS as the tool to explain customer satisfaction and loyalty. Since then, the NPS has been used in a variety of industries and businesses.
What is the Net Promoter Score?
A Net Promoter Score (NPS) is based on the question “To what degree would you recommend Company X to your friends and acquaintances?” This question is answered on a scale from zero to ten. The NPS is then defined as the difference between the proportion of so-called “promoters” (replies 9 and 10) and the “non-promoters” or “detractors” (replies 0 to 6).
Single customer contact or general customer relationship?
The Net Promoter Score is often portrayed as the only value that is important to describe the customer experience. In reality, however, the NPS represents a general assessment. It describes your customer relationships and the general impression that customers have of your business, as opposed to their impressions of individual processes. We often see that the NPS is used on the basis of individual customer contacts, which leads to a distortion and / or misinterpretation of the general rating.
Another difficulty that we often experience in connection with the Net Promoter Score is its implementation across large hierarchies. The NPS is a so-called net measurement and requires over 10 times as much data as a simple satisfaction index. This means that when small samples are used, large measurement fluctuations occur, without necessarily reflecting the true image. That’s why we often implement the NPS as the overarching goal for the entire enterprise, while using methods like the customer or employee satisfaction index further down the hierarchy.
The right balance
If you want to tie the NPS to customer relationships, loyalties, and profits, it’s important to use it with care. At maix analytics we have extensive experience in designing KPIs (key performance indicators) that are both feasible and relevant. In general, we report the NPS at overall level, while lower hierarchies and interactions require different indicators.