he Net Promoter Score (NPS) is a widely recognized tool used by businesses to gauge customer loyalty and predict growth. It’s a simple metric, based on one question: “On a scale of 0-10, how likely are you to recommend our company/product/service to a friend or colleague?” Respondents are categorized as Promoters (9-10), Passives (7-8), or Detractors (0-6). The NPS is then calculated by subtracting the percentage of Detractors from the percentage of Promoters.

The NPS is lauded for its simplicity and effectiveness. It provides a quick snapshot of customer sentiment and loyalty, which are key indicators of a company’s potential for growth. Businesses can use NPS to identify areas of improvement, track changes in customer satisfaction over time, and compare their performance against industry benchmarks.

Moreover, NPS can be a powerful driver of internal change. By focusing on a single, easy-to-understand metric, companies can align their teams around the goal of increasing customer loyalty. The NPS can also be used to incentivize employees and foster a customer-centric culture.

However, the NPS is not without controversy. Critics argue that it oversimplifies customer sentiment and fails to capture the complexity of customer experiences.

This following research was conducted by Mike Knight of MKLINK and gives a valuable insights into customer feedback for MSPs via the Net Promoter Score method.

https://mklink.net/NPS.pdf

Given this research is quite in-depth, the main points can be summarised here :

The NPS is a widely adopted tool used to predict company growth and is seen as a useful management index. However, it has faced significant controversy from academics.

The study begins by acknowledging the rapid growth of the managed IT services industry and the widespread adoption of the NPS by businesses worldwide. Despite this, there is a lack of empirical evidence supporting the merit of NPS in this sector. The research aims to fill this gap by conducting a small-scale empirical study to determine whether the NPS is a valid predictor of company growth.

The study introduces an alternative metric, the Net Satisfaction Score (NSS), and contrasts it with the NPS. The NSS is proposed as a way to homogenise its measurement in-line with that of NPS, to see whether Reicheld’s rationale for NPS applies to a service-level question. The research objective aims to ascertain how effective the NPS is in predicting company growth for Managed Service Providers (by reviewing revenue, gross and net profits), as part of a Net Promoter Survey (conducted via interviews), and how this compares against the proposed NSS metric.

The study also emphasises the importance of online reviews and referrals for managed service providers. Most MSPs grow primarily by word of mouth, yet relatively few have any process of organised referral system in place, leaving them completely to chance. The same can be said for their online reviews, despite significant literature outlining the impact reviews have on sales. This means much business-development is left unrealised.

The document further explores the criticisms of the NPS, including the argument that it oversimplifies customer sentiment and fails to capture the complexity of customer experiences. Critics also argue that the NPS alone yields no feedback or insights about the client’s reasons for their score.

The study concludes with suggestions for future research in this area. It recommends improving the overall review percentage and exploring the effectiveness of extending the NPS with supporting questions, including the NSS metric. The study also acknowledges the limitations of the research, including the accuracy of the data and the resources available for the study.

In essence, the document provides a detailed investigation into the application of the NPS in the managed IT services industry, introduces an alternative metric (NSS), and offers valuable insights for managed service providers looking to increase reviews, referrals, and revenues.