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Calculating your Net Promoter Score - Are You Doing it Correctly?

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When it comes to calculating Net Promoter Score, companies often employ different methodologies to arrive at a score. Before calculating your “company level” Net Promoter Score, you’ll want to carefully consider how each approach may impact your results.

For additional Net Promoter Score best practices, download our EBook: http://www.satrixsolutions.com/ebook-steps-for-designing-effective-net-promoter-score-survey-program/

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Calculating your Net Promoter Score - Are You Doing it Correctly?

  1. 1. www.SatrixSolutions.com 1 Calculating Your Net Promoter Score®: Are You Doing it Correctly?
  2. 2. How likely are you to recommend [Company Name] to a friend or colleague? Not at all likely Extremely likely 0 1 2 3 4 5 6 7 8 9 10 Detractors (0-6) Promoters (9-10) Passives (7-8) 2 The Net Promoter Question www.SatrixSolutions.com
  3. 3. Net Promoter Score (NPS) = % of Promoters − % of Detractors How likely are you to recommend [Company Name] to a friend or colleague? Not at all likely Extremely likely 0 1 2 3 4 5 6 7 8 9 10 Detractors (0-6) Promoters (9-10) Passives (7-8) Range: -100% to +100% 3 A Simple Calculation www.SatrixSolutions.com
  4. 4. 4 But…which respondent “scores” count towards your company-level Net Promoter Score? www.SatrixSolutions.com
  5. 5. 5 But…which respondent “scores” count towards your company-level Net Promoter Score? www.SatrixSolutions.com
  6. 6. 6 3 Commonly Adopted Methodologies www.SatrixSolutions.com 1. Counting All Responses 2. Averaging Responses 3. The Waterfall Method
  7. 7. 7 Counting All Responses www.SatrixSolutions.com
  8. 8. 1. Counting All Responses • This is likely the right approach for B2C companies. • For B2B businesses, it has its drawbacks and should be employed with caution. 8 www.SatrixSolutions.com
  9. 9. Counting All Responses - Drawbacks • The score can be skewed toward the larger population of End Users -deemphasizing Decision Makers • The Score can also be disproportionately influenced by customers with more respondents (5 responses from company A versus 1 response from company B) 9 www.SatrixSolutions.com
  10. 10. www.SatrixSolutions.com 10 Of course, the responses from every respondent are important!
  11. 11. 11 All feedback should be considered when evaluating improvements, such as: - product roadmap - features / functionality - resource allocation - service delivery model www.SatrixSolutions.com
  12. 12. 12 Averaging Responses (multiple responses from each customer) www.SatrixSolutions.com
  13. 13. 2. Averaging Responses • This approach gathers responses from Decision Makers, Influencers, and End Users to derive an average score per customer. • It also partially mitigates over-weighting your users and skewing the score toward customers with more respondents. 13 www.SatrixSolutions.com
  14. 14. www.SatrixSolutions.com 14 However, while each customer engagement only counts once, End Users may still heavily influence the score if their population size is significantly larger than the rest.
  15. 15. 15 This approach also requires “rules” of whether an average of 8.5 rounds to 8 (Passive) or 9 (Promoter). www.SatrixSolutions.com
  16. 16. 16 The Waterfall Method www.SatrixSolutions.com
  17. 17. 3. The Waterfall Method • A good approach for calculating company level Net Promoter Score within B2B companies. • It avoids the various over-weighting drawbacks by counting only one response from each unique customer engagement. 17 www.SatrixSolutions.com
  18. 18. The Waterfall Method- Whose score counts? • The person who has the most influence over whether the customer continues its engagement with your company – usually the Decision Maker. • If they don’t respond, the score from the next most “important” person is counted - usually the Influencer. 18 www.SatrixSolutions.com
  19. 19. www.SatrixSolutions.com 19 It’s important to have contact roles clearly identified (Decision Maker, Influencer, End User, etc.) before fielding your survey.
  20. 20. 20 This will prevent “cherry- picking” the most favorable responses to derive your score and also enable you to evaluate loyalty among the different customer groups. www.SatrixSolutions.com
  21. 21. 21 Final Considerations www.SatrixSolutions.com
  22. 22. Establishing the right calculation method is important. 22 www.SatrixSolutions.com
  23. 23. 23 www.SatrixSolutions.com So is drilling down, segmenting, and identifying actionable insights from slicing and dicing your data.
  24. 24. 24 www.SatrixSolutions.com Just pick an approach and stick with it - consistency is critical when analyzing trending data.
  25. 25. 25 www.SatrixSolutions.com Lastly, Net Promoter is more than a metric; it’s a culture-shaping endeavor that, when adopted, keeps your company focused on: - listening to customers - acting on feedback - educating employees on the key drivers of customer satisfaction
  26. 26. 26 www.SatrixSolutions.com Download our Ebook: Steps for Designing an Effective Net Promoter Score Survey http://www.satrixsolutions.com/ebook-steps-for-designing-effective-net-promoter-score-survey-program/
  27. 27. • Customer Satisfaction Survey • Net Promoter Score® Survey • Customer Advisory Board • Sales Win Loss Analysis About Satrix Solutions • Employee Engagement Survey • Employee Net Promoter Score • Employee Customer Service Training • And other customized programs Benefitting from a range of feedback programs and a consultative approach, companies that partner with Satrix Solutions realize Net Promoter Scores® twice the B2B average and experience increased retention, referrals, and sales win rates. The objective insights and recommendations delivered empower business leaders to outperform the competition and achieve higher valuations in the public and private markets. Learn more by visiting: www.SatrixSolutions.com Customer and Employee Feedback Programs ®Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld 27

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