Net Promoter Score (NPS) – All you need to know

Net Promoter Score (NPS) – All you need to know

First introduced in 2003, Net Promoter Score (NPS for short) has been a key way for brands to measure their consumer loyalty. Its use seems to know no industry bounds. Businesses as diverse as telecommunications, banking and food retail are all using NPS. So popular is it that an increasing number of organisations, enticed by its simplicity, are now extending its use beyond the consumer arena and using it to measure employee loyalty, by incorporating NPS into their employee engagement surveys.

For those not familiar with NPS, consumers or employees answer a simple question. How likely is it that you would recommend to a friend or colleague on a scale of 0 to 10, with 0 being not at all likely and 10 being extremely likely? Those who answer 9 or 10 are classed as promoters; those who answer 6 or less are classed as detractors. The NPS score is the percentage of promoters minus the percentage of detractors. As simple, straightforward metrics go, you can’t get much simpler than that.

But is NPS ready to play a viable role in companies’ talent attraction and retention strategies?

Many consumer brands have fallen into the trap of treating NPS as just a score: it’s become a number to track over time and a point of comparison with competitors. The reason people are promoters or detractors, although important, is not the focus of interest. But it should be. The value of NPS as a way of measuring employee loyalty depends on employers not making this mistake.

Only when and if employers can “fight the temptation to let it become just a score” (Reichheld and Markey) will NPS be ready to play a viable role in companies’ talent attraction and retention strategies.

NPS, net promoter score

But first the selling points of NPS. Aside from the obvious simplicity of NPS, numerous studies including those conducted by the Harvard Business Review, Satmetrix, and Bain & Company have found that there is a strong correlation between high Net Promoter Scores and revenue. Where companies have used NPS as a measure of consumer loyalty, there has tended to be a corresponding growth in business revenue. Businesses with the highest NPS scores have tended to outgrow competitors by at least two-to-one, and data shows that customers who have come from referrals have tended to be 18% more likely to stay with the business than other customers. The thought that adopting NPS as an employee loyalty metric could have a similarly positive impact on employee retention figures and cost to hire figures is extremely enticing.

NPS also focuses the mind. Companies who adopt NPS as a metric generally become more focused – more focused on increasing the number of promoters and decreasing the number of detractors.

The NPS trap

Unfortunately, NPS does not provide deep insights. In a way, its simplicity is both its strength and its flaw. NPS doesn’t specifically identify the reasons why your employees may be detractors. If you want deep insights you have to add additional questions to the NPS question. It’s the kind of metric that you have to follow up and seek to understand why people would recommend/would not recommend the employer.

Understanding why people would or wouldn’t advocate you as an employer is what’s critical to identifying practical steps to improving employee loyalty. Instead of obsessing about the NPS score itself, employers must obsess on what they learn from the follow-up questions. The temptation to compare with competitors, the industry NPS average or department X versus Y must be avoided.

There are other reasons why the focus ought to shift away from the NPS score and towards the more exploratory questions that accompany the likelihood to recommend question. The NPS score could unwittingly be asked right after a single negative experience and therefore may be skewed by that one recent experience. In other words, an NPS score may not be that accurate a reflection of the overall employee sentiment towards their employer.

Added to this, there’s the age-old problem of people saying they will recommend you and then not actually doing so. NPS is a measure of the desire to recommend but not a measure of the will to recommend – an important distinction to make. And some say only the latter really counts. In order to accurately measure how many customers who say they will recommend you should also be asking an additional question – have you recommended us in the last 12 months?

NPS 2.0

It’s no surprise that Net Promoter Score, once the preserve of consumer brands, is being embraced by ever more employers to measure employee loyalty. You would be hard pressed to find a more simple and straightforward metric. What could be simpler than asking, “How likely would you be to recommend your employer to a friend or family member on a scale of 0 to 10”. With research fatigue a genuine problem we need simple questions like this.

We need an employer-led next generation approach to NPS with a desire to understand why people would or wouldn’t advocate their employer.

Katharine Newton is Head of Insight at Talent Works International (TWI). TWI is a global talent communications firm that helps organisations around the world build effective and efficient talent strategies through our research, sourcing and creative teams. 

Creating an award-winning employer brand is simple…or is it?

You’re a winner. You’ve done it. You not only built the business case for developing your global employer brand and employer value proposition, you had the budget signed off and you’ve actually gone and delivered it. It has been a long slog but my goodness you’ve achieved. Kudos, credit and props to you.

Your journey possibly went a bit like this:

Let’s keep it simple…if only!

You gathered together all of those people who you just had an inkling would suddenly have a pernickety but limelight-stealing hand in the ‘project’ near its conclusion despite never showing a glimmer of interest previously. You even had the decency to include them as part of a steering group. And you made a pact that you wouldn’t mention the word ‘brand’ or the acronym ‘EVP’ from that point forwards in order to keep it simple and not confuse ‘your people’. You even rolled with the punches that for some inexplicable reason, Canada and Puerto Rico refused to be involved in your ‘global project’.

Research is key and so is segmentation

You researched inside and outside the business; you surveyed; you spoke to loads of people in focus groups and 1-2-1 interviews; you segmented your audiences to include HiPos, HiPers, new joiners, people who’ve been about for years, people who have left, people you didn’t know were about to leave, employee resource groups, people in far flung countries and in inconvenient time zones, Geeks, Wizards, Ninjas and Procurement.

Authenticity comes from within

You found out lots you already knew about your business: car parking is a nightmare; technology for new joiners doesn’t work; communication is poor; departments operate in silos. Some of the stuff you found, you could never share with the ‘leadership team’ unless it was dipped in a little coat of sugar and packaged in a wrapper with a disclaimer on every surface. But at least on the flip side, everyone recognises you’re like one big happy family sharing 3 of the 7 values they can actually remember – a family, albeit one that’s just a little dysfunctional at times. You discovered what people know or think they know it’s really like to work for your company. You achieved authenticity in abundance.

Dilute the proposition at your peril

After much analysis and reporting you derived a fabulously clever model that has pillars, values, reasons to believe, selling points, big ideas and links to your consumer brand and proposition. Better still, and in the interests of simplicity (remember everyone signed up to that at the beginning), you contrived a segmentation matrix with a hierarchy of messaging that covered all 16 segmented audiences in 18 different countries. You negotiated the peace settlement resulting from the circular debate of “that’s just not us – it’s too aspirational” to “if you take our name off it, aren’t we like everyone else?” and your slightly diluted model was excitedly gifted to the ‘activation magicians’ – the creative team – to bring the whole thing to life; to tell your story in a compelling and award-winning way.

Seamlessly, your toolkit of attraction, engagement and retention communication materials (see what happens if we can’t say employer brand) along with the launch collateral and playbook were delivered as you reached your final milestone on the project plan. Job done. Aced it.

The reality

Much of this journey may be an all too real experience for many of you. And it’s the last part that probably seems the most fictional. That’s because it just doesn’t happen like that. Turning all that has gone before into something tangible, meaningful and effective is a major hurdle and often a significant stumbling block to success.

Creativity is the connection to the candidate, to your employees and the world at large. It’s where the emotional engagement happens and the real sense of purpose is communicated. It’s where we open the consciousness to possibilities and opportunities. The process to create that activation that lies in the proposition or brand is challenging. For creativity to flourish, it needs time, information, license to explore and most of all it needs simplicity. Yet for many reasons that’s rarely the case:

  • The brief has become more and more complex as we’ve gone on
  • The expectation and anticipation of the final output has been built up during the course of the project – living up to that is hard
  • Creative is subjective and means different things to different people – one of the key reasons we segment audiences is to ensure relevance of message
  • Over-segmentation of our audiences adds multiple layers of complexity and scope for misunderstanding
  • Inclusion of a multi-discipline steering group to avoid hurdles later in the process is sensible but has the potential for decision by committee and watering down of key differentiators
  • The clamour to find and apply innovation is not necessarily sustainable in recruitment – although we’re trying hard to do so
  • The degree of creativity is frequently governed by the confines of the consumer brand

So, the next time you’re managing, implementing or even just involved in an Employer Brand or EVP initiative, think about the journey you’ve been on and how complicated it may have become. Keep it as simple as you can because landing it successfully is anything but simple. Particularly if you’re looking to pick up awards and recognition along the way.

Simon Thomas is Brand and Strategy Director at Talent Works International. TWI is a global talent communications firm that helps organisations around the world build effective and efficient talent strategies through our research, sourcing and creative teams.

Multi-gen workplaces: A blessing or a curse?

We were recently featured in Impact, the magazine for the largest community of research, insight, analytics and marketing sciences professionals. Our Gen Up research was spotted and we were contacted to share our findings and feature in the magazine. Below is an excerpt from the featured article. 

A workplace with employees ranging from 18-to 67-year-olds- and in some instances, older – creates challenges for managers. It’s a new workplace dynamic, but is each generation really as different as we think?

We specialise in helping clients to craft their employer brand, giving employers the insight, creativity and adaptability to engage, motivate and inspire different generations. As part of our research, we aimed to debunk some of the stereotypes gaining traction across professional social media platforms, including LinkedIn. We carried out research using 1,200 participants across different industries and locations. To give our research credibility and make it representative we used a large sample of 300 for each generation. All four generations were covered, from the youngest group, Generation Z, born 1995 to 2009; Generation Y, born 1982 to 1994; Generation X, born 1966 to 1981, right through to Baby Boomers, born postwar.

Our Head of Insight, Katharine Newton said ‘we’d seen research looking at one or two of the generations but struggled to find any looking at all four simultaneously – yet that is the reality; lots of workplaces have that.’ This is where the Gen Up project came to life. It is where we could uncover whether it is possible to have an employer brand that speaks to all four generations at once, or if separate strategies would be required for each group. We wanted to dispel the assumption that different generations equals different pages, and that multi-gen doesn’t translate into conflict and disconnect.

During the process we found there to be a lot of common ground between the generations, dispelling the idea that generations are on different pages. ‘There is scope for an over-arching employer brand and recruitment strategy, but there are key areas where employers would be advised to dial up their messaging and proposition appropriately’, Katharine said. Our research draws attention to the older generation, who felt they were being overlooked in terms of training and development opportunities. Where younger employees receive abundant opportunities to develop, older colleagues feel these opportunities were not in their reach. It all stems back to ‘that assumption that when you hit 50 you’ve nothing more to learn – that you know it all. But our research suggests over 50s don’t feel that way and there’s a strong appetite for training’, says Katharine. In order to successfully meet young generations’ requirements, our research revealed that employers increase the frequency of their reward and recognition programme. But this unfortunately wasn’t prevalent amongst older groups.

The importance of communication is one of the most important findings from the research. ‘All four generations are looking for more communication than they are receiving. The elder generation was receiving even less than the younger ones. It backs up the misconception that they are considered as not needing those updates; is that generation being seen as a waste of time?’ This needs to change in order for the elder generation to feel equally valued in the workplace.

Another stereotype explored through this research was the idea that younger generations don’t have a strong work ethic. However, when we asked younger respondents what it meant to add value and go the extra mile in the workplace, their answers demonstrated a lot of thought and they were well equipped to articulate their answer. This finding also indicated that employers do not always communicate their expectations of how going the extra mile translates to their business. Altering this and making it clear to all parties would ensure cohesion towards goals. Becky Grove, one of our Lead Consultants, considers the old-fashioned idea of what the workplace is as one of the biggest challenges for employers and their employees. Our attitudes about the workplace need to be a truer reflection of the current climate.

We need to adapt our views surrounding older generations in the workplace, providing the same opportunities for training and growth that younger employees have access to. ‘Even though state pension age is getting higher and higher, people are working longer but we’re still acting like they’re not – that they don’t need to learn past 50 because they are coming up to retirement age.’ The figures on this one speak a lot louder than words. Business in the Community did a report on age in the workplace and looked at how many people are receiving work-related training. ‘11% over the age of 60 received some form of training’, whereas the figure for ‘under 50s was 30%’, Becky reports. The gap here is far too wide and for a multi-gen workplace to thrive, this needs to change.

Moving forward there needs to be a re-levelling. The shortfall in training opportunities for the older generations need to be addressed – but this needs to be done without being at the younger generation’s expense. Striking a balance here is the biggest challenge. Katharine said one of the biggest positives that came out of this study was the level of willingness across all generations to work collaboratively and learn from each other.

The workplace is certainly changing; young grads are reaching managerial level positions and having older colleagues reporting into them. Years ago this would have proved an issue, but today our research found that people of all generations were actually very comfortable with this new hierarchy. This is a real positive for the future. The cohesion across generations shows that employers need to maximise on the similarities between generations, rather than trying to distinguish each group from one another.

Want to see more about our Gen-Up project? Click here.