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Mindshare 1.0

What influences your NPS result?

By Richard Gibbs

The NPS score is touted as being the ‘one number’ that a company needs to determine how well it is performing. Rootsquared have determined there is a direct link between a firm’s NPS performance and a customer’s intention to purchase more or less from them.

So, the logical question to ask is what drives your NPS result?

It’s actually a big question, in the sense of where do you start looking?

Some time ago we were researching relationships among channel partners and one of the measures that we used was NPS. It was among several metrics that we deployed to understand the health of the partner relationship and the level of mindshare between the firm and its channel.

The answer revealed what goes on inside the head of a customer in terms of what influences their intention to purchase or indeed to repurchase.

From a selection of variables including Communication and Pricing, it was the big four fundamentals of the marketing offer which play the biggest (highest correlation) part in determining a customer’s propensity to recommend a product or service:

It is as if the customer is taking a long hard look at the fundamentals, the benefits, and disadvantages, and weighing them up before making a decision. The Brand, Service, Product and Business Case. Notice that it’s the notion of the overall Business Case (relative cost/price) that it’s important. Also, note that a customer won’t recommend your firm unless they see a real strength in the Brand, that is the company’s integrity and reputation.

This is all about getting the basics right. Attractive promotions, smart adverts, and good communications all have a role to play but don’t expect to see you NPS score improve if you let the fundamentals slip.

The chart above shows the simple line regression equation for the four fundamentals of the offer against a customer’s likelihood to recommend. The importance of the Brand and Business Case for Promoters clearly stands out.

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