Marketing, customer satisfaction and loyalty
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Is the Net Promoter Score a reliable measure of customer satisfaction ?

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This article is also available in French

The Net Promoter Score (NPS) is a 1-question scale introduced by Reichheld in 2003 that aims at measuring the propensity of customers to recommend a company (the famous word-of-mouth, also called WOM).

This scale has encountered a fantastic success … because it’s extremely simple and quick to apply. Imagine how wonderful this customer satisfaction measurement instrument is: you ask just one question and you know directly whether your customers are satisfied or not. Too good to be true ? Well, that’s what a study by Haans and Roossens (respectively University of Tilburg and University of Eindhoven, The Netherlands) wanted to find out.

The results were presented at the EMAC 2014 conference and I must say that this presentation was among the most inspiring I attended and will clearly contribute to how we handle customer satisfaction surveys at IntoTheMinds.

A 11-point scale that segment promoters, detractors and passive customers

The scale is very easy to apply. We actually embed it every time we do a customer satisfaction survey and recently applied with success to measure the satisfaction of an IT company present in more than 10 countries.

It works like this. The question asked is the following: “How likely are you to recommend firm X” and the answer is measured on a scale from 0 to 10 (0 corresponding to “I’ll never recommend this company” and 10 to “I’ll always recommend this company”).

Customers having answered between 0 and 6 are called detractors because it’s thought that they are likely to propagate negative word-of-mouth about the company.

Customers having answered 9 or 10 are called “promoters” because it’s thought they are likely to propagate positive word-of-mouth.

Finally, customers having answered 7 or 8 are called passive because it’s thought that they won’t undertake any action against or in favor of the firm.

The big question mark is the following : is it true that scores below 6 will generate negative word-of-mouth while scores above 9 will lead to positive WOM ?

Do NPS scores correspond to actual consumers’ behaviors in terms of word-of-mouth?

The study by Haans and Roossens aimed at verifying the link between NPS scores and promotion behaviors.

What they did (in a nutshell) is the following : first they got the NPS scores and email addresses of customers of two large companies in The Netherlands. Second they looked systematically for online comments posted by these customers. Third, they rated those customers (positive, neutral, negative). Finally they assessed the correlations between original NPS scores and the comments posted online.

The Net Promoter Score is a good proxy of customers’ promotion behaviors

What they find is highly interesting :

  • Detractors do NOT differ from each other
  • Promoters do differ from the other groups but are similar to each other
  • Passive customers display heterogeneous behaviors

It means basically that the groups of detractors and promoters are made of homogeneous behaviors (negative vs. positive). For instance 70% of detractors did indeed give negative comments and propagated negative word-of-mouth.

Advice for your customer satisfaction strategy: should you use Net Promoter Score or not ?

Finally there is a good news coming from the research field : NPS is indeed a good proxy in most cases. It accurately describes negative and positive promotion behaviors.

However it fails to predict the behaviors of passive customers because the group of passive customers is too heterogeneous.

Our recommendation is therefore to be cautious when you analyze your customer satisfaction results: keep in mind that passive customers may also propagate negative WOM. Logically you should therefore focus first on those customers having scored your company badly (0 to 6) and then check personally the results with the passive customers. This will enable you to make sure you don’t forget anyone when trying to enhance the customer satisfaction of your customer base.

If you want to improve your customer satisfaction, talk to one of your experts. Just drop us an email and we’ll respond within 60 minutes.

This article is also available in French

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Author: Pierre-Nicolas Schwab

Dr. Pierre-Nicolas Schwab is the founder of IntoTheMinds. He specializes in e-commerce, retail and logistics. He is also a research fellow in the marketing department of the Free University of Brussels and acts as a coach for several startups and public organizations. He holds a PhD in Marketing, a MBA in Finance, and a MSc in Chemistry. He can be contacted by email, Linkedin or by phone (+32 486 42 79 42)

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