Understanding the NPS Scale

The Net Promoter Score (NPS) has long been a staple metric for gauging customer satisfaction and loyalty. Its simplicity—a single question asking how likely customers are to recommend a company's products or services on a scale from 0 to 10—belies the complexity and impact of its application. Yet, within this straightforward metric lie nuances that spark debate among practitioners and analysts. Two such points of contention are the color coding of the NPS scale and the classification of a score of 8 as a passive response, both of which we often get a lot of questions about at Loopon.

Let's delve into these aspects, supported by real-world data and insights.

The NPS scale and its color coding

The NPS scale is divided into three categories: Promoters (9-10), Passives (7-8), and Detractors (0-6). These categories are often color-coded to visually represent customer sentiment: green for Promoters, yellow for Passives, and red for Detractors. The color coding aims to provide a quick visual summary of customer loyalty levels, but it can also influence perception and decision-making.

Color coding, while helpful, can oversimplify customer feedback. For example, treating all Detractors (0-6) the same can obscure the differences between someone who rates a 6 and someone who rates a 0. According to a study by Bain & Company, the creators of NPS, the behavior and feedback of a customer who rates a 0 can be vastly different from one who rates a 6, yet both fall into the same category and color.

Real-world application of nuanced color coding shows its potential benefits. Some companies have adopted a more granular color scale, distinguishing between "soft detractors" (4-6) and "hard detractors" (0-3). This allows for more targeted follow-up actions and can lead to better customer retention strategies.

The controversial "Passive 8"

A particularly contentious aspect of the NPS scale is the classification of a score of 8 as a Passive response. Critics argue that an 8 is a relatively high score and should not be grouped with a 7, which feels more neutral. However, proponents maintain that Passives, regardless of scoring 7 or 8, are less likely to exhibit the enthusiastic loyalty seen in Promoters.

Data from the Temkin Group provides insight into customer behavior by NPS score. Customers who rate 9-10 are five times more likely to repurchase and eight times more likely to refer others than those who rate 7-8. This significant behavioral difference justifies the current classification system, as Passives are less predictable in their future behavior compared to Promoters.

Further, a study published by the Journal of Marketing Research found that customers who score an 8 are more likely to be swayed by competitors' offerings compared to those who score 9 or 10. This indicates that an 8, while seemingly positive, does not equate to unwavering loyalty.

Conclusion

The debate over the NPS scale’s color coding and the classification of a score of 8 as passive highlights the challenges of balancing simplicity with the need for nuanced insights. While the current system offers a straightforward approach to categorizing customer loyalty, the reality is more complex. Companies that delve deeper into the data, perhaps adopting more granular color coding and exploring the behaviors behind each score, can gain more actionable insights.

At Loopon, we believe in the power of data-driven decision-making. As we continue to explore and debate these nuances, we encourage the community to share their experiences and insights.

By examining the NPS scale through the lens of real-world data, we can appreciate its strengths and limitations. This ongoing discussion is crucial for refining our approaches and ultimately improving customer satisfaction and loyalty. Join the conversation on Loopon's LinkedIn page, and let's shape the future of customer experience together.

By the pen,

Mathias Sabel

CEO, Loopon