Metric of the Month. Net Promoter Score. By Jeff Rumburg Managing Partner at:

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1 Metric of the Month By Jeff Rumburg Managing Partner at: Every month Industry Insider highlights one Key Performance Indicator for the Service Desk or Desktop Support. We define the KPI, provide recent benchmarking data for the metric, and discuss key correlations and cause/effect relationships for the metric. The purpose of the column is to familiarize you with the Key Performance Indicators that really matter to your support organization, and to provide actionable insight on how to leverage these KPI s to improve your performance. This Month s Metric:, or NPS, is based on the idea that every organization s customers can be divided into three categories: Promoters, Passives, and Detractors. By asking one question How likely is it that you would recommend our service to a friend or colleague? you can track these groups and get a clear measure of your support organization s performance from the customer s perspective. Customers respond on a 0- to-10 point rating scale and are categorized as follows: Promoters (score 9-10) are loyal enthusiasts who will refer others to your support organization. Passives (score 7-8) are satisfied but unenthusiastic customers who may choose another source of support if given the chance.. Detractors (score 0-6) are unhappy customers who can damage your reputation through negative word-of-mouth. To calculate your support group s NPS, simply take the percentage of customers who are Promoters and subtract the percentage who are Detractors. Your Net Promoter score can be as low as 100% (everybody is a detractor) or as high as +100% (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is thought to be good, and an NPS of +50% or greater is excellent.

2 IT support groups that track NPS will typically follow the initial question with an openended request for elaboration, soliciting the reasons for a customer's rating of their IT support. These reasons can then be provided to front-line employees and management teams for follow-up action and improvement initiatives. Benchmark Data for NPS NPS is a relatively new metric, and is currently tracked by approximately 20% of all service desks and desktop support groups. However, the vast majority of organizations that track NPS are providing support to external businesses or consumers, where NPS is considered to be a leading indicator of customer loyalty and follow-on business. MetricNet s benchmarking data for Customer Satisfaction and s is shown in Figure 1 for 68 IT support organizations that track both metrics. As you can see, the Customer Satisfaction score for this particular data set is always higher than the Net Promoter score. This is generally the case, as it is extremely rare for an organization to have a higher NPS than Customer Satisfaction score. Put another way, it is much easier to create a satisfied customer than it is to create a customer who is willing to put their credibility on the line by recommending your service. MetricNet, LLC, All rights reserved Page 2

3 Number of Support Organizations Figure 1: Customer Satisfaction and Customer Scores Net Promoter Customer Satisfaction Average -14.4% 73.0% Max 41.2% 97.1% Min -69.1% 45.6% Median -14.2% 73.9% % -90% -80% -70% -60% -50% -40% Customer Satisfaction -30% -20% -10% 0% 10% 20% 30% Customer Satisfaction and 40% 50% 60% 70% 80% 90% 100% Since NPS is both a quality and a loyalty metric, one would expect there to be a correlation between NPS and Customer Satisfaction. There is, in fact, a correlation between these two metrics, but it is not as strong as one might expect. Figure 2 shows the strength of this correlation for the same 68 support organizations referenced in Figure 1. This reinforces the notion that NPS measures something different than customer satisfaction (i.e., customer loyalty), and that customer loyalty and satisfaction are two very distinct metrics. MetricNet, LLC, All rights reserved Page 3

4 Customer Satisfaction Figure 2: Net Promoter vs. Customer Satisfaction 100% 90% 80% 70% 60% 50% 40% -80% -60% -40% -20% 0% 20% 40% 60% The key question with any IT service and support metric is whether it helps the organization operate more efficiently and effectively. Does it provide useful feedback that helps agents and technicians deliver exceptional customer service? Does it provide a tracking mechanism that enables week-over-week, and month-over-month comparisons? Those who track this metric believe that it does. But it is worth noting once again that NPS is used primarily by IT service and support organizations that are supporting an external customer base. Please join us for next month s Metric of the Month: The Service Desk Balanced Scorecard, a straightforward approach for measuring overall service desk performance. About the Author Jeff Rumburg is a co-founder and Managing Partner at MetricNet, LLC. Jeff is responsible for global strategy, product development, and financial operations for the company. As a leading expert in benchmarking and re-engineering, Mr. Rumburg authored a best selling book on benchmarking, and has been retained as a benchmarking expert by such well-known companies as American Express, GM, Hewlett-Packard, and Bayer. Prior to co-founding MetricNet, Mr. Rumburg was president and founder of The Verity Group, an international management consulting firm specializing in IT benchmarking. While at Verity, Mr. Rumburg launched a number of syndicated benchmarking services that provided low cost benchmarks to more than 1,000 corporations worldwide. Mr. Rumburg has also held a number of senior management positions at META Group, and Gartner, Inc. As a vice president at Gartner, Mr. Rumburg led a project team that reengineered Gartner's global benchmarking product suite. And as vice president at META Group, Mr. Rumburg's career was focused on business and product development for IT benchmarking. MetricNet, LLC, All rights reserved Page 4

5 Mr. Rumburg's education includes an M.B.A. from the Harvard Business School, an M.S. magna cum laude in Operations Research from Stanford University, and a B.S. magna cum laude in Mechanical Engineering. He is author of A Hands-On Guide to Competitive Benchmarking: The Path to Continuous Quality and Productivity Improvement, and has taught graduate-level engineering and business courses. Mr. Rumburg currently serves on the Strategic Advisory Board for HDI, formerly the Help Desk Institute. Mr. Rumburg s contact information is as follows: Jeff Rumburg Managing Partner MetricNet, LLC 1431 Mayhurst Blvd McLean, VA United States Telephone: Facsimile: jeffr@metricnet.com About MetricNet MetricNet is the leading source of on-line benchmarks, scorecards, and performance metrics for corporate managers worldwide. MetricNet benchmarks encompass virtually every industry and government sector, and address all major business areas including Information Technology, customer service, and technical support. Our mission is to provide our clients with the benchmarks they need to run their businesses more effectively. MetricNet is committed to making the benchmarking process quick and easy for its customers. We have pioneered a number of innovative techniques to ensure that our clients receive fast, accurate benchmarks, with a minimum of time and effort. MetricNet offers a number of competitive differentiators vs. other industry consulting firms. These include: Credibility and Experience The principals of MetricNet have collectively completed more than 1,400 benchmarks since Each of them has extensively researched, written, and published on the topic of Service Desk Best Practices. Prior to joining MetricNet, the founders of the company held senior management positions at a number of companies including Gartner, META Group, MicroStrategy, the Stanford Research Institute, and the Verity Group. Benchmarking Database MetricNet s Service Desk Benchmarking database is the most comprehensive in the industry. The database contains information on more than 30 Key Performance Indicators (KPI s), salary data for key service desk positions, technology profiles, and more than 70 best practices from hundreds of service desks worldwide. Methodology Expertise Through decades of Service Desk consulting experience, MetricNet has perfected its methodology for Service Desk Benchmarking. MetricNet s approach to peer group selection, data normalization, gap analysis, and action planning yields consistently positive results for its service desk clients. One of MetricNet s cofounders, Jeff Rumburg, authored the first ever book on benchmarking in 1989, and MetricNet, LLC, All rights reserved Page 5

6 MetricNet has authored and published numerous articles on the topic of Service Desk Benchmarking. Objectivity -- MetricNet s recommendations are independent and unbiased. We have no relationships with hardware manufacturers, software vendors or systems integrators, and we do not perform downstream hardware or software implementation work. As a result, our clients receive objective recommendations that are free from any vendor bias. MetricNet, LLC serves a global client base from its headquarters in the United States, in McLean, Virginia. The principle location of MetricNet, LLC is: 1431 Mayhurst Blvd. McLean, VA United States Telephone: Facsimile: info@metricnet.com For More Information For more information about MetricNet, please go to us at info@metricnet.com, or call us at MetricNet, LLC, All rights reserved Page 6