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We are committed to help organisations drive improvement through the EFQM Excellence Model, a

comprehensive management framework used by over 30 000 organisations in Europe. To help you

implement our Model, we provide training and assessment tools as well as recognition for high performing

organisations. But our real talent comes from gathering good practices and integrating those within our

portfolio. We at EFQM, a not-for-profit membership Foundation, aim to share what works, through case

studies, online seminars, working groups, conferences and thematic events. Sharing our member’s

enthusiasm, their motivation and the results they achieve; that is what we work for.

The EFQM User Guides are designed to help member organisations by giving examples of common

approaches, techniques and methods which support the practical deployment of the EFQM Excellence

Model. We have developed them in response to feedback from a number of our members; using their

knowledge and experience to identify approaches commonly used within our member organisations.

The EFQM Excellence Model is non-prescriptive and there are many different approaches that can help you

on your journey towards excellence – the challenge is finding the one that works best within your

organisation. The aim of this guide is to give you a number of ideas to help inspire, based on the

experience of others.

This document is not intended to be a “definitive version” or to describe all the approaches possible within

this area. This document will be adapted and updated to incorporate new ideas and learning as EFQM

continues to share what works.

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Is the Net Promoter Score “the one number you need to grow”, or is it an equally important growth

measure than other loyalty questions? The answer is debatable. What is not up for debate is the fact that

an increasing number of organisations are using the Net Promoter Score today.

The Net Promoter Score is a customer loyalty metric developed by, and a registered trademark of, Fred

Reichheld, Bain & Company, and Satmetrix. It was introduced by Reichheld in his Harvard Business Review

article "One Number You Need to Grow" in 2003.

The popularity of the NPS is understandable; it is a simple metric that is easy to calculate & communicate.

It is used world-wide and based on logical reasoning: enthusiastic customers attract others. However, it is

one thing to calculate the Net Promoter Score, it is yet another to improve it.

In this User Guide, we explain the basic theory and give some guidance on how to implement it in your

organisation.

To calculate the Net Promoter Score (NPS), you need to ask one simple, fairly straightforward question:

“How likely are you to recommend our product/service/company to a friend or colleague?”

Based on the answer, a customer can be categorised in one of the three following groups:

People scoring either 9 or 10 are “Promoters” – they would actively recommend your products and

services to others.

People scoring below 6 are “detractors” – they would not recommend you and, in some cases, actively

voice their dissatisfaction.

People scoring 7 or 8 are considered as neutral.

The NPS is the percentage of promoters minus the percentage of detractors. This means it is possible to

get a negative result when there are more detractors than promoters.

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In the past, people used to talk about customer experiences with a small group of colleagues, friends and

family. It used to be said that people were more likely to talk about bad experiences than good

experiences, often summed up as “they will tell 3 people about a good experience but 10 people about a

bad experience”. So the concept of “promoters” and “detractors” is nothing new.

What has changed the landscape is the web. The ability of people to share their views and experiences,

both positive and negative, is now much larger. Many websites use feedback from real customers to rate

products and services, from CDs to holidays and hotels. Social Media enables people to share their views

with thousands of people within seconds.

Within this environment, understanding what your customers are saying about your products and services

is more important than ever.

As well as understanding the single NPS number, you also need to understand how polarised your customer

views are. For example, an NPS of 20% could mean you have 20% Promoters, 80% Neutral and 0%

Detractors OR 50% Promoters, 10% Neutral and 30% Detractors. Which result would you rather have?

One of the common criticisms of the NPS is it’s usability. However, this is a common issue with any

perception survey and is usually resolved by ensuring the questions are simple, clearly worded and can be

attributed to a specific approach, process, product or service. In the case of the NPS, you have to be clear

about what you are asking the respondents to recommend:

A specific product?

A specific service?

A group of products or services?

Your company?

Choosing a specific product or service tends to provide more meaningful results. It’s easier for someone to

decide whether they would recommend a specific product or service based on their experience, rather than

an entire organisation. Once you have the data, it’s easier to develop action and improvement plans if you

get a poor result for a specific product or service.

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A general “rule of thumb” is that scoring above +10% is considered “good”; scoring above +50% is

“excellent”. However, there are significant variations between countries and sectors. The website for

Satmetrix, one of the originators of the NPS methodology previously mentioned, includes some benchmark

data and case studies.

The average scores, segmented by country and industry, give a clear insight into the level of variation.

In Germany & France, the average NPS within the utilities sector is below -40%. Even the leading company only achieved a rating of -13%.

For mobile & smart phones, the average is nearly 20%, with the leading company scoring as high as 69%.

If we look at how an identical product is rated in different countries, we still see variations.

Apple’s iPhone achieves an NPS of 57% in France, compared to 68% in Germany and 69% in the UK.

Samsung televisions range from 26% in France to 35% in the UK.

Source: Satmetrix 2011 Net Promoter Benchmark Study

This variation means that comparing your results with relevant benchmarks is vital to understanding how

good, or how bad, your result actually is.

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Organisations come across different challenges when implementing the Net Promoter Score. Some

examples include:

The NPS is seen as another marketing tool

Customer loyalty is regarded as just a sales indicator

Nobody wants to take responsibility

Another common misuse of the Net Promoter Score at management level is its interpretation as “just

another result in an excel sheet”. The NPS is not a standalone measure. It’s correlations with other

measures, financial as well as non-financial, help organisations to understand what exactly drives customer

loyalty. For instance, some EFQM members look at the correlation between the NPS and market share to

confirm the effect of loyal customers on growth. Others look at the correlation with operational excellence

measures, such as “time taken to answer a request”. These relationships help them to understand which

customer needs and expectations strongly affect their purchase behaviour. In other words, it helps

organisations to determine how their way of working influences the opinion of their customers.

For the NPS to work, an organisation needs to develop an open culture. Leaders need to be connected to

the work floor, they need to inspire employees and involve them in the entire approach.

To instil a culture which embeds the Net Promoter Score, organisations have to empower employees. Each

employee must feel they can change the outcome. EFQM members employ different strategies to build

such a culture. For instance, some organisations in our network have developed individual NPS targets for

all employees. Others have defined employee bonuses that are linked to their contribution to the increase

in the Net Promoter Score. In some rare cases, we even find that a specific NPS Board has been set up to

manage the communication and interpretation of the Net Promoter Score.

One of the most effective ways of presenting the result of the NPS is depicting the score as an “audience”

for your organisation. Amongst the audience members will be promoters, neutrals and detractors. These

can be illustrated by an appropriate “smiley face”. This can also be used to show the evolution of scores

over time.

NPS = -22% NPS = 3% NPS = 40%

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Here’s a real example, taken from a real organisation, to demonstrate the difference between the NPS and

a traditional Customer Satisfaction figure in predicting customer behaviour.

The trend for “Overall Satisfaction” is increasing slightly but there isn’t much variation – it’s around 3 out of 5. But is that a good result?

What does “3 out of 5” really mean? Will they use the service again? Would they recommend this company to

someone else?

The total number of customers using the service is actually falling; around 10% over the period shown.

This trend is almost the exact opposite of the “Overall Satisfaction”.

Why is this when the customers seem reasonably satisfied?

If we look at the Net Promoter Score results, taken from the same survey data, the trend is very different.

Even though the overall satisfaction is increasing, the NPS is reducing.

Once the Management Team were shown this data, they began to rethink their approach to customer service.

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So, is this the greatest measure ever and something everyone should be doing? The NPS is not without its

critics, both from the academic and business communities. As with most approaches, what works for some

people doesn’t work for others.

The NPS was developed to provide insights into growth strategies. If you’re organisation is looking to

increase its customer base or is in a high-churn market, it could be useful. If you’re more concerned with

increasing the “share of wallet” from existing customers, loyalty and intention to repurchase measures

might give more meaningful insights.

Another example of this could be in the “Business to Business” environment. If the product or service in

question is giving the customer an advantage over their competitors, do you think they’d be vocal in

recommending it within the market place?

Finally, organisations should not forget the close the loop. As straightforward as it sounds, organisations

often skip that “assessment and refinement” part.

Feedback from customers should be turned into

concrete action and improvement plans. To give

another example, an EFQM Member from the service

sector industry has shown us two different Close Loop

Feedback mechanisms: one for the short-term and one

for the long term. In the short term, the company

defines the individual coaching needs of employees and

teams based the customer results. In the long term,

structural improvement plans are developed to solve re-

occurring problems.

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The following industry averages are published on the Satmetrix Net Promoter community website:

France Germany UK

Banking -14% 3% 0%

Car Insurance 6% 2% -6%

Computer Hardware 20% 19% 27%

Internet Service -4% -8% -6%

Mobile Phone Carriers -2% 3% 8%

Mobile Phone / Smart Phone 20% 19% 19%

TV / DVD Electronics 20% 16% 23%

Utilities -48% -48% -35%

N.B. Industry and regional specific reports are available to purchase from the Satmetrix website. See

www.satmetrix.com for more information.

The following data is published on the Satmetrix Net Promoter community website:

Minimum Average Maximum

Banking -34% -5% 61%

Car Insurance -38% 0% 38%

Computer Hardware -15% 22% 70%

Internet Service -30% -6% 17%

Mobile Phone Carriers -15% 4% 28%

Mobile Phone / Smart Phone -15% 19% 69%

TV / DVD Electronics -14% 20% 37%

Utilities -69% -42% -13%

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The following industry averages are published on the Satmetrix Net Promoter community website:

Average Maximum

Airlines 30% 66%

Auto Insurance 41% 76%

Banking 29% 78%

Brokerage / Investments 45% 56%

Cable / Satellite TV Service 15% 32%

Mobile Phone Service 25% 39%

Credit Cards 25% 46%

Department / Specialty Stores 62% 78%

Grocery / Supermarkets 36% 63%

Health Insurance 12% 35%

Home / Contents Insurance 41% 80%

Hotels 32% 62%

Internet Service 9% 29%

Laptop Computers 41% 76%

Life Insurance 23% 44%

On-line Entertainment 27% 50%

On-line Shopping 43% 69%

Smartphones 41% 70%

Software & Apps 24% 54%

Tablet Computers 45% 65%

Travel Websites 21% 36%

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The Net Promoter Score was developed by, and is a registered trademark of, Fred Reichheld, Bain &

Company, and Satmetrix. For more information, we recommend visiting their website:

www.netpromoter.com

www.satmetrix.com

EFQM is a membership organisation. We rely on input, ideas and suggestions from you to create a vibrant

community. Without the contributions of our members, the network would not work. These are some of

the ways you can contribute:

We created The EFQM Network for Sustainable Excellence to facilitate a dialogue between our peers and

the wider community. The group is open to anyone with an interest in this area. Over 4000 individuals

have already joined our group and shared their experiences. If you’ve got a question, it’s a great place to

start.

Organisations can join the EFQM member community and enjoy some exclusive benefits such as access to

free assessment and improvement tools, participation to events, themed webinars and good practice visits.

To learn more about our member community, feel free to contact us or to join one of the free introduction

meetings at our offices in Brussels. Member benefits include:

Expert advice to plan & support your organisation’s journey towards excellence. Access to the EFQM Knowledge Base with free-to-download assessment-, management- and

improvement tools; as well as Case Studies & Good Practices from award winning organisations. Learning from peers through webinars, conferences and visits. Extending your professional network. Gaining recognition for your organisation’s achievements. 20% discount on EFQM Products & Services, including Training, Events, Publications and Assessments. Regular newsletters, giving the latest information on what’s happening in and around the excellence

community.

For more information, please e-mail us at info@efqm.org

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