Three reasons to be excited about the potential of the Net Promoter Score for the nonprofit sector
Every 90 days, I get an email in my inbox with the subject line “Continuous Improvement.” In the email, I’m asked how likely I would be to recommend my gym to my friends and family on a 0-10 scale with the option to comment about why I gave my particular score. It only takes me about ten seconds to answer this question, and I quickly see my feedback integrated into how the gym operates.
Chances are you’ve been asked a similar question by some company in the past – Apple, AT&T, U.S. Airways, Zappos, and hundreds of other companies around the world are using these questions to determine their Net Promoter Score (NPS), a simple score that can help predict customer loyalty and future growth.
Created by Bain & Company a dozen years ago, NPS is a tool that allows companies to divide their customers into three categories (“promoters,” “detractors,” and “passives”) by asking variations of the question: “How likely are you to recommend [company X] to your friends or colleagues?” The score is then determined by the percentage of customers who are detractors (those who give a score between 0-6) subtracted from the percentage of customers who are promoters (those who give a score of 9 or 10). Passives (those who give a score of 7 or 8) are ignored in this equation.
While NPS is now an industry standard for measuring customer loyalty in the for-profit sector, it is still being explored as a potentially useful tool in the nonprofit sector. At GlobalGiving we have been asking our stakeholders the NPS question since 2010, and we are excited about the potential value that a tool like this can add to the nonprofit sector.
Three key characteristics of the Net Promoter Score are especially important in adding value to a nonprofit’s efforts to collect feedback about its work:
1. Simplicity in Feedback Collection
At GlobalGiving, we work with close to 3,000 nonprofits in more than 160 countries. One thing that we hear consistently across the board from our nonprofit partners is that while collecting community feedback is desirable, it is also expensive, time-consuming, and difficult. With so many competing commitments, collecting community feedback often falls to the bottom of the list of priorities.
The Net Promoter Score, however, is a quick, easy, and inexpensive way to collect rapid feedback from stakeholders. GlobalGiving has collected NPS responses in person, via SMS, by email, and directly through our website, making it easy to adjust to different types of communities and environments. Indeed, the versatility of NPS only bolsters its success.
Agreeing on a standard question and methodology for analyzing the results of that question across the for-profit sector helps companies compare their own performance to that of their competitors and helps investors make decisions. Many companies make their Net Promoter Score public, and entire databases exist that allow companies to benchmark their performance across others in their industry.
Benchmarking could be of huge benefit to the nonprofit sector as donors decide which groups to fund and nonprofits try to improve the services they provide in the communities where they work.
3. Improvement over time
While the 0-10 score that respondents provide is an important data point, the feedback that customers can provide about why they gave a particular score is even more crucial. Companies can use these data to improve their products and services, thus moving customers from detractors to promoters. For example, by asking the “Why?” follow-up question, my gym might find out that their customers would be more likely to continue their membership if there were more lunchtime yoga classes on the schedule or nicer locker rooms.
Also exciting is the possibility of using NPS to get real and actionable feedback from constituents on the ground about topics like local schools or health interventions in their communities.
Now an M&E officer doesn’t have to sift through every single survey collected, but rather can simply segment the responses to target just detractors or just those who provide written feedback with more than 100 words. A nonprofit worker doesn’t have to wait a full year until the next annual survey is sent to see if the changes made have an effect on his or her stakeholders - the effects those changes can immediately be reflected in the Net Promoter Score.
This blog by GlobalGiving Director of Programs Britt Lake is part of a special blogging series for InterAction Forum 2015. The blogs, authored by Forum 2015 speakers, will be published June 10-24. Lake is speaking at How Analytics on Feedback Data Can Drive Performance Improvement: Net Promoter Analysis on Tuesday, June 23 at InterAction's Forum 2015. Feedback Labs - of which GlobalGiving is a member - is exploring the potential of what using NPS could meet for the nonprofit sector as a whole, and on June 23, Lake will join Keystone Accountability, Ashoka Changemakers, and LIFT to talk about their experiences using NPS to collect quick and actionable feedback from donors, staff, and direct constituents. Check back for more blogs in the series, and join the conversation with #InterActionForum.