What Drives Net Promoter Scores (NPS) in IT?
July 17, 2012 5 Comments
A previous post examined Net Promoter Scores (NPS) for tech vendors and the relationship between NPS and market share based on feedback from IT decision makers within large firms. Since I’ve had questions about that post, I decided to examine a common question: What’s driving those NPS scores? It turns out that the answer (no surprise) is customer experience.
We examined a number of metrics and their relationship with NPS in two areas:
- Correlation (R). This looks at how connected one metric is to another, ranging from -1.0 to 1.0. A correlation above 0.5 is strongly positive and above 0.7 is very strongly positive.
- Slope. This looks at the change in NPS that relates to a one-point change in the metric. A higher slope means a change in the metric has a higher change in NPS.
Our first analysis examined NPS scores versus the Temkin Experience Ratings for Tech Vendors. It turns out that there was a very strong correlation (R= 0.77) and the slope is 1.13.
We then examined the correlation and slope between NPS and components of the Temkin Experience Ratings as well as with product and relationship satisfaction scores.
- Customer experience is critical. Temkin Experience Ratings has the highest impact on NPS, with the highest overall correlation and slope.
- You have to be easy to do business with. The highest individual correlation (.75) and slope (1.11) is with the accessible element of the Temkin Experience Ratings, which looks at how easy the company is to work with.
- Relationship trumps product. It turns out that the correlations are about the same for relationship satisfaction and product satisfaction, but the slope is much higher for relationship satisfaction.
- Cost of ownership stands out. When it comes to the slopes, cost of ownership (.99) stands out amongst the satisfaction items. Support of account team (.86) is also relatively high.
The bottom line: To improve NPS, improve customer experience.
You can purchase this data for $295. The Excel spreadsheet contains NPS, Temkin Experience Ratings, relationship satisfaction, and product satisfaction data for 60 tech vendors in the analysis as well as for 28 others with sample sizes of less than 60 respondents.