The Net Promoter Score has swept across the business world faster than the most aggressive bushfire. Why is this? It is a simple concept. You don’t need to be a statistician or a numbers geek to understand it. It is a good benchmark for comparison against other companies. However, it doesn’t tell you what to do.
Two questions that you should be asking in addition to the NPS are:
- How would you rate (my company) on its prices, compared to the prices of other suppliers of similar products/services?
- How would you rate (my company) on the benefits received from its product/services, compared to the benefits offered by other suppliers of similar product/services?
Answers to these two questions will provide metrics that can be plotted on an X Y graph. On this graph we can hypothesize that there is a balance or trade-off between price and benefits. A line at 45° from the intersection of the X and Y axes represents perfect equilibrium between price and benefits. A company that is positioned to the left of the line would be considered a poor value supplier and one to the right would be seen as a good value supplier.
If the questions are repeated for a number of companies competing within a market, they could be plotted objectively relative to the value equivalence line. In the example shown in the chart, company number 5 can decide on two courses of action; it can stay where it is and enjoy an increase in market share or it can raise its prices and raise its profitability. Equally, company number 4 must improve the benefits that it offers, reduce its prices or go out of business.
So, in addition to measuring the Net Promoter Score, ask these two very simple questions that will point you in the right direction as to how you can grow your business.
To learn more about Customer Satisfaction and Loyalty Research, including the Net Promoter Score, click the link below.
