Is Your Net Promoter Score Biased?
Is your Net Promoter Score a reliable metric for judging what customers think of your business, or is it biased? This is a common question that can be particularly worrying for small businesses that maintain a close relationship with their customers and clients.
For example, can you trust Net Promoter Score data if the customer that left it happens to be a personal friend or acquaintance? Can you trust your Net Promoter Score as a whole if you keep in close contact with a large number of your customers and clients?
Biases are common in surveys and sampling, and while it’s impossible to remove them entirely, there are ways to improve the quality of your data. In this post, we’ll look at the effects personal relationships can have on the accuracy, value and “bias” of your Net Promoter Score.
Every business has a relationship with its customers
It can be easy to write off NPS data as biased or distorted if you maintain a close professional or friendly relationship with your customers. After all, it’s easy to visualize yourself leaving a review for a friend or family member’s business that’s overly supportive and positive.
With this in mind, it’s important to consider that every business has a relationship, of some type, with its customers:
- Any agency or service business that keeps in contact with its clients through account managers or other staff has a relationship with its clients that could potentially affect its ability to collect unbiased NPS data.
- Any product-based business that’s impressed its customers through great service or an excellent product has an indirect relationship with its customers through its products that could potentially affect its ability to collect unbiased NPS data.
- Any business built around a public figure has a relationship with its customers through publicity that could potentially affect its ability to collect unbiased NPS data.
Do you see a pattern forming? Relationships are a natural part of business, and certainly not an undesirable one. Every business with satisfied or dissatisfied customers has a “bias” that could affect its data, either positively or negatively.
Positive NPS “bias” isn’t necessarily a bad thing
Another important point to note is that positive “bias,” in the sense of customers and clients with whom you have a personal relationship increasing your Net Promoter Score, isn’t necessarily a bad thing.
The reason for this is simple: if you have a positive relationship with a client or customer, they’re far more likely to remain a client or customer than if they were a stranger. Businesses will have relationships with their customers by default, and a positive one is very much a good thing.
If you manage to get closer to a certain customer, it’s likely to result in some level of positivity for your NPS. The positivity isn’t a result of inaccuracy or sampling errors — it’s a result of the strong relationship you have with that particular customer (and potentially, with others).
As long as you have a large enough audience to generate reliable, accurate data, the biases in your Net Promoter Score aren’t a bad thing. Instead, they’re an honest reflection of your client and customer relationships and the level of satisfaction customers feel from your product.
Selection bias, on the other hand, can be a real problem
Here’s a surprisingly common situation:
Your small business surveys its clients and earns a very high Net Promoter Score. After digging into the data, you realize that the high score is a result of most customers ignoring your survey and only the customers with whom you have a friendship responding.
A situation like this gives you all of the “biased” data that can inflate your NPS without any of the data from customers that aren’t connected to you. The end result is a score that’s artificially high — one that can give you an overly optimistic view of your business’s retention-related health.
Net Promoter Score is designed for accuracy. The greater the response rate of your survey, the greater the accuracy. Most authoritative NPS experts recommend a minimum response rate of 40% for business-to-consumer businesses and 60% for business-to-business enterprises.
Anything below this is far more likely to be affected by selection bias and could paint an overly positive picture of your business’s ability to satisfy and retain its customers.
This means that if your business deals with a small number of customers or clients with whom you have a personal connection, you’ll need to aim for a higher-than-average response rate to make sure your data isn’t affected by bias.
How to reduce bias in Net Promoter Score
If you’re concerned about biased results affecting the accuracy of your Net Promoter Score, you can take several steps to reduce the effects of overly friendly survey answers and feedback:
- Reach out directly to clients and customers with whom you’re close and ask them to be as honest and objective as possible with their score and feedback. Explain to them that you won’t feel offended or upset by a low score or negative feedback, as long as it’s an honest summary of their feelings about your product or service.
- Sample a large number of customers and clients, so that “biased” results from friends and acquaintances are balanced out by the greater amount of results from non-friendly customers.
- Instead of focusing on static NPS data, such as your score at any point in time, focus on the progress your business makes by measuring improvements in NPS. These are much less likely to be affected by biased results.
Simplify your NPS process with Retently
Retently makes if easier than ever before to survey your customer base and calculate your Net Promoter Score. Instead of managing your NPS process manually, you can automate your NPS emails to generate helpful, regular feedback from your most important clients and customers.
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