Measuring Donor Loyalty
Employing the NPS system also provides zero indication of why people score the way they do. There is no guidance — specific, general or otherwise — on how to do root cause analysis and understand the “why” of responses and determine the specific levers under the organization’s control to drive up NPS. By contrast, if one measures the different dimensions of the donor experience and, critically, how important they are to donors, then one begins to generate managerially useful data. Those aspects rated as high in terms of importance and low in terms of satisfaction are obvious candidates for management intervention.
4. Recommendation is not the primary goal. In response to the criticism above, the NPS creators have suggested conducting a key driver analysis with NPS as the dependent variable to identify the organizational activities that impact it – i.e., to look at what drives the ratings obtained. We see no rationale for adopting such an approach because it isn’t recommendation per se that is of interest to most fundraisers. Are we really interested in spending time and effort isolating the factors that cause people to recommend us, or are we more interested in isolating the factors that drive up donor satisfaction with experience and lifetime value to the organization?
NPS rose to prominence off the back of the assertion that it was a good predictor of loyalty. But what do we mean by loyalty? Continuing to be a donor is not the same thing as increasing (or decreasing) the amount of one’s giving, or spending a bigger (or smaller) proportion of one’s charitable pot on a focal organization. All of these behaviors, in turn, are quite different from being willing to recommend the organization to a friend. Each one of these dimensions is associated with loyalty, but loyal donors need not exhibit all these behaviors — and most don’t.