I read an article recently touting the power of a metric called “Net Promoter Score” or NPS. You can read all about NPS at Net Promoter. The metric is deceptively simple - and that’s the power. It’s easy to measure and managing to it has real results.
With NPS you ask one question: “Would you recommend us to a friend or colleague?” The answer on a scale of 0 to 10, where 9s and 10s are “Promoters,” 7s and 8s are “Passives” and any response in the 0-6 range indicates “Detractors.” To calculate your score, you take the percentage of Promoters and subtract the percentage of Detractors. That’s your score.
For example, if 20% of your donors are Promoters (9s or 10s), and 50% of your donors are Detractors (0-6s), your Net Promoter Score is minus 30%. For Promoters at 50% and Detractors at 25%, your NPS is +25%. Obviously, the higher your NPS, the better. The average for-profit business is only in the 5-10% NPS range.
If you are a nonprofit you can ask this question of all of your donors: “Would you recommend [insert NPO name here] to a friend, family member or colleague?” The first time you ask this question establishes a baseline. From then on your goal should be to work like hell to get the number higher. Why? Obviously if a donor recommends you to their friends you’ll have the chance to gain new donors and increase your revenues. If your number is low (or negative!) then you have to find new donors through very expensive marketing instead of the relatively free referral/word of mouth you’d get with a higher number.
You can modify this model a bit if it doesn’t quite fit, and I suspect that it would be useful in many cases to get the NPS for both your donors and those you are serving.
Here are some of the best NPS ratings, according to Net Promoter. What’s your score?
| USAA | 82% |
| HomeBanc* | 81% |
| Harley-Davidson | 81% |
| Costco | 79% |
| Amazon | 73% |
| Chick-Fil-A* | 72% |
| Ebay | 71% |
| Vanguard | 70% |
| SAS | 66% |
| Apple | 66% |
| Intuit | 58% |
| Cisco | 57% |
| Federal Express | 56% |
| Southwest Airlines | 51% |
| American Express | 50% |
| Commerce Bank | 50% |
| Dell | 50% |
| Adobe | 48% |
| Electronic Arts | 48% |
* All NPS statistics are based on Bain or Satmetrix surveys with the exceptions of Intuit, Chick-fil-A, and HomeBanc. For these firms, we used data that they provided. Their data was gathered in a reasonable (but not perfectly equivalent) fashion.
Source: The Ultimate Question, Reichheld, 2006
Filed under: Fundraising, Giving Patterns | Tagged: net promoter score, netpromoter, nps
