Measuring Donor Loyalty
The measure is called the “net promoter” score because detractors are subtracted from promoters. Detractors are defined as respondents rating their likelihood to recommend 6 or less, with promoters only those who rated their likelihood a 9 or 10. Respondents who selected 7 or 8 are considered neutral. The NPS measure can run from 0 (0 percent promoters, 100 percent detractors) to 100 (0 percent detractors, 100 percent promoters), with typical measures in the 30 percent to 40 percent range.
What is wrong with NPS?
As we have indicated above, the approach is beautifully straightforward. You only need to concern yourself with a single key metric and maximizing the net number of recommends garnered. Superior performance in fundraising then is linked to the size of the number obtained.
Unfortunately, there is increasing evidence that the approach is flawed and doesn’t deliver the silver bullet necessary for managing retention in our sector. Here’s why.
1. NPS assumes low scores are active “detractors” of brand. Reichheld and other proponents of NPS have taken what is clearly a unipolar question of willingness to do something or not (i.e., will or will not recommend) and turned it into a bipolar one with willingness to recommend on one end and willingness to detract on the low end. In other words, we are to accept or believe that those who give a low score on the “willingness to recommend” question are not going to recommend your brand and also will actively say bad things about it — hence the “detractor” term.
From a management standpoint, if nonprofits are to treat low NPS scores as mission-critical, it is likely they will devote more effort and resources to improving the scores of the detractor segment. They would be mistaken to do so since low scores are in themselves indicative of nothing. Critically, a low score may not be an indicator of a negative sentiment, merely that the individual in question does not engage in offering recommendations. He may well have a favorable view of the organization and may indeed be passionate about the work undertaken, but he just doesn’t like talking about his experiences to others.