Net Promoter System Quiz – Answers
Here are the answers to the Net Promoter System quiz questions that you can find on our blog pages. Some of the answers may not be exactly what you expected. Each quiz follows a chapter in our book Net Promoter – Implement the System. Feel free to disagree and debate answers in the comments section below.
Part 1 – Introductory questions
- The answers to “How likely are you to recommend [Company] to a friend were found to be the best predictors of future revenue trends among all the questions tested by Fred Reichheld in his 2003 Harvard Business Review article The One Number You Need to Grow. Answer: True.
- The answers to the “How likely are you to recommend [Company] to a friend were found to be the best growth predictors for all industries tested, in the same HBR article. Answer: False. Other questions finished at the top of the list for a few industries. The recommendation question finished just behind in those cases.
- The Net Promoter Score scale must start at zero and go to ten. All other scales are invalid. Answer: False. The scale can also go from ten to zero, or indeed one to five. It is important to be consistent, using a single scale for your company and keeping it the same from survey to survey.
- Reichheld’s research showed that customer behaviors really do change depending on their classification as Promoters, Passives or Detractors. Answer: True.
- The definitive reference source for the Net Promoter System is The Ultimate Question 2.0, and no other information on the design and implementation is available from Reichheld and Markey. Answer: False. While The Ultimate Question 2.0 is a reference source, it has been updated extensively. The Bain updates to the system are covered in the Net Promoter System Podcasts. Satmetrix has independently developed what it calls NPS2.
Reliable, trusted currency / metric
- If your competitive benchmark NPS number is better than that of your main competitor, you will take market share from them moving forward. Answer: False. What matters is the trend relative to competition. If your number is higher and has stayed flat, but your competitor’s number has improved, they will take share from you in the future.
- Good NPS scores start at 30, great scores at 40, and you are world-class at 50. Answer: False. A good NPS score is one whose trend is better than the trend of your main competitor. A world-class score is one that is better than the competition and improving faster. The absolute number has no importance.
- Consistent trends in numbers that are based on small sample sizes are always useful. You do not need sample sizes for all competitors to be the same, for example. Answer: True. You may want to treat a single outlier result as suspicious if the sample size is smaller than for your other competitors or countries, for example. However, if you see similar numbers in sequential sampling periods, you should trust the trend.
- All customers are considered equal by benchmark survey suppliers, so customers who spend a lot have the same weight as those who do not spend much. Answer: True, though the survey vendors also supply demographic data so you can do your own weighting if you so wish. However, when vendors such as Temkin publish tables on their websites, there is no weighting.
- Even the font you use in an email asking customers to take a survey can make a big difference. Answer: True. Using a serif font like Times New Roman in emails improves response rates compared to using a non-serif font like Arial. As explained, Drayton Bird and other direct marketing practitioners have done extensive a/b testing that proves this.
- To make sure you are doing a good job, you should always send a survey request to every customer who phones your service center. Answer: False. You should only survey if you have the people, funding and plans to act on the input.
- Embedding at least the rating question in a survey request email improves response rates by about 2.5 times. Answer: True, at least in the author’s experiments. There are software vendors who say that it triples response rates.
- Culture makes no difference to survey responses, so it is always fair to compare countries’ NPS performance with each other. Answer: False. Do your best to make all competitive comparisons local. Comparing NPS scores between countries is not helpful.
- Low survey response rates tend to give overly optimistic NPS scores. Answer: True, and the effect is substantial. You can only consider an NPS survey to be truly representative of the customer population when you have response rates above about 50%. Such numbers are rare for transactional / episode surveys, another reason to be selective when using them.
- The more questions there are in your survey, the more likely people are to complete the survey, as it is clearer that you value their opinions. Answer: False. The longer your survey questionnaire, the more people will drop out before completing it. Compared to a 3-question survey, about 6% of the people who start a 20-question survey will not complete it, rising to 10% for a 40-question survey. There is no available scientific data about people who open a survey request but do not answer any questions.
- The cost of renewing an existing annuity contract is typically one-tenth the cost of acquiring a new customer. True. Renewing a contract is mainly an administrative effort and costs far less than hunting for and acquiring a new customer.
- If your overall brand NPS trend is better than that of your competitors, it is safe to assume that all parts of your business will benefit in the same way. False. You need to do the analysis for each part of your business for which you produce a P&L.
- Bain experience suggests that the average time lag between a relative NPS improvement and new product revenue improvement is 18 months. True. This is to do with the average purchase cycle. Even if they love you, people are relatively unlikely to buy the same thing again right away. This varies widely by type of product.
- Since contra-revenue is not in a standard P&L statement, it should not be considered when calculating the lifetime value of a customer. (Contra-revenue includes things like discounts from standard list prices, and rebates given to resellers.) False. Promoters tend to get lower discounts than less happy customers and discounts from list prices are not in your P&L in most accounting systems.
- To avoid bias, all customers should be considered equal in your research, no matter how much they spend with you or your competition. False. You need to distinguish between customers who spend a lot and those who don’t spend much on your type of product or service when calculating lifetime value. Large spenders tend to be more demanding than small spenders, and therefore tend to give lower NPS scores.
Feedback, learning and improvement
- The Inner Loop is where you follow up with customers on individual feedback items. The Outer Loop is where you work across departments on feedback that has come from many customers. True, and the Huddle is a place where you can work on the intersection between the two, for example when an item comes up frequently in the Inner Loop and needs to be addressed more systematically.
- All common customer improvement suggestions are equally important. You should staff up to work on as many as you can afford to. False. You need to prioritize. Come up with your own prioritization criteria. For example, you could decide that items that come up more frequently from your largest, or perhaps your newest customers should have a higher priority.
Robust operational and analytic infrastructure
- Customer Experience is clearly a part of brand marketing and the customer experience leader should always report to the Marketing leader. False. It does not matter much where the customer experience leader reports, within reason. Ideally the Chief Customer Officer should report to the CEO. If they report more than one layer down, they are unlikely to be effective. In the specific case of Marketing, Marketing oversees a small subset of the many touchpoints that affect a customer, and is one potential choice for a reporting line. The author recommends reporting to the corporate Chief of Staff, if there is one, and you need to have the person report a layer down.
- Humans are currently the best single solution for evaluating and prioritizing verbatim responses to surveys. True. Humans are the best single solution, but cannot deal with high volumes. They also need to be trained to minimize bias and ensure consistency. The best results come from combining software screening with final human analysis.
Employee / team environment focused on loyalty
- Happy employees are the single most important customer satisfaction predictor in most businesses. False. Surprisingly, it does not matter much for the average business. There are high-touch businesses like restaurants where it seems to matter a lot. Note that ’employee happiness’ and ’employee engagement’ are quite different concepts. Employees can be happy with their pay, the food in the company restaurant, and the child care arrangements without doing anything for customers.
- The Net Promoter System work just as well as an employee experience improvement process as it does for customers. True. The principles and methodology are almost identical for internal use.
- Satmetrix is the only official provider of Net Promoter professional certification. True, as of August 2017
Sustained leadership commitment
- To be most persuasive, customer experience leaders should usually start their presentations with a story about a single customer, a quote from a customer executive, or a single emotionally-charged statement. True. Unfortunately, human brains don’t work as rationally as we may like to think, so starting with numbers tends to be ineffective. You need to lead with something that addresses emotional and intuitive thinking. Engage rational thought afterwards.
- Senior leaders who participate in a company’s Executive Sponsor program should have no experience in the client’s industry. Customers will welcome their outside views. False. Executive Sponsors should understand their customer’s industry and have a personal interest in the area.
July 20, 2017 @ 1:05 am
I believe what you’ve said here is true:
You can only consider an NPS survey to be truly representative of the customer population when you have response rates above about 50%.
But what’s your source or justification? I deal with some people who publish NPS results based on less than a 10% response rate. I started researching this and don’t find consensus. Some authors claim a response rate of 80% is needed, but others can go as low as 25%.
July 20, 2017 @ 6:06 am
Thanks for your comment Joseph. Of course it is tricky to understand each answer completely without the context of the corresponding book chapter. The statement is based on research by Bain. In ‘The Ultimate Question 2.0’ Fred and Rob provide an illustration based on their years of experience across a large number of clients. (This is on page 111 of the print version of their book.) They show an example where there is an NPS of 50, based on a 20% response rate. Their analysis suggests that the NPS would be -22 had all the customers responded.
My co-author and brother has a doctorate in cognitive psychology. He has been unable to design an experiment that would prove this definitively, as it is hard to prove what people who don’t respond actually think.
My own experience is of course anecdotal. Where we used face-to-face interviews with large customers and had response rates close to 100%, the scores were much lower than the average across all research methods.
Of course the score does not actually matter all that much. At a constant response rate, its trend will be a reliable indicator of loyalty, and what really matters is the answers to the open text questions and what you do with them.