Net Promoter Score for Franchises
Should Net Promoter Score be used to capture feedback in franchising? When NPS works and alternatives to NPS when it doesn’t.
The Net Promoter Score (NPS) is often touted as the gold standard in benchmarking customer satisfaction. Most people are familiar with NPS, in fact most of us have been asked to take an NPS survey at one time or another, but with more companies administering surveys than ever before it can be confusing to understand how and when to use the NPS.
So should NPS be used to capture feedback in franchising? The answer is yes, sometimes. Before we dig into when and where to use NPS, let’s start with a basic definition of what NPS is and how to calculate Net Promoter Score.
Net Promoter Score Definition
NPS is a metric created by Bain & Company to measure customer loyalty and predict overall company growth. The Net Promoter Score system is based on asking ONE “ultimate question”: How likely are you to recommend our product or service to others?
Respondents give a rating on a scale of 0 – 10, with zero being not at all likely, and 10 being extremely likely. Depending on the rating, respondents fall into one of three Net Promoter Score benchmarks:
- Promoters: responded with a 9 or 10
- Passives: responded with a 7 or 8
- Detractors: responded with 0 -6
To calculate Net Promoter Score, simply subtract the percent of detractors from the percent of promoters.
Although Net Promoter Score is determined based on a single question, some NPS surveys ask additional demographic questions and may also include open response questions, like: What is the reason for your score? What can we do better? Do we have permission to follow up with you?
Does Net Promoter Score work for customer surveys?
Yes! NPS was created specifically to help companies measure customer loyalty. It’s a valuable tool to use at the unit level to gather feedback from franchise customers who don’t have a lot of incentive to spend time talking about their experience with your brand. It gives your team a number to focus on improving, and gives you a number to benchmark against competitors in your space to understand if you’re delivering a superior experience, and/or if there’s an opportunity to increase loyalty.
Does Net Promoter Score work for employee surveys?
While it’s a great question to include in your employee survey, the answer is no if you want to actually understand which employees are at risk of leaving or are unengaged. The purpose and value of an employee survey is to uncover any blind spots you might have about your culture and your team, and that requires more than a single question. It’s hard to get real insights into something as important as employee engagement and retention with one data point.
We’ve all heard some version of the saying, “people quit managers, not companies.” But your manager is YOUR company, and so is that employee, so when they leave, it’s best to make sure you did all you could to support them while they were on your payroll.
If you are in a large franchise system, your managers may be the only leadership your employees have. Using detailed employee feedback is one way to know how layers of the organization outside of your direct reports are feeling, and implement or adjust hiring and retention strategies to attract and keep great employees. The data can be used to benchmark managers and as a coaching opportunity to help them become better leaders.
Does Net Promoter Score work for franchisee surveys?
This is a hard no! Franchisees have made a significant investment of time and money into your brand, so you need to dig into a lot more than just would they recommend you to others (although this question is included as one of the 33 benchmark questions on the FBR franchisee satisfaction survey).
The franchisee/franchisor relationship is a complex one. It’s long-term, 5-10 years in most franchise systems, and like most long-term relationships it will ebb and flow. Perception is reality, and an annual survey enables you to measure the perceptions of franchisees in all the areas where they rely on you—training and support, marketing, innovation—and work to align expectations if needed. As with managers and employees above, your Franchise Business Consultant (or the person responsible for field operations) knows your franchisees well, but do you? If your franchisees are outside your direct weekly communication, how can you be sure they’re engaged and happy with the brand?
Feedback of any kind, including NPS, is great. But if you truly want useful insights on the perspectives of the key stakeholders in your system who have more invested in your brand than just a transaction, you should be asking more.
Franchise Business Review can help you dig deeper. Not only can we provide detailed data around how your customers, employees and franchisees are feeling about your brand, but we benchmark your brand against other franchises in the industry so you can see how you compare, and even celebrate brands that have high franchisee satisfaction and employee engagement. If you aren’t ready to engage with a third party partner yet and want to tackle this on your own, we’re happy to share the questions on our standard franchisee and employee engagement surveys with you. Schedule a free 10-minute demo and to see the questions we ask and what the results can tell you.
Six Strategies for Turning Low Satisfaction Scores into a Win
Surveying franchisee satisfaction is a giant step forward in becoming a high-performing brand. But what if your scores aren’t what you hoped? This free eBook outlines six key strategies to effectively use your survey results to strengthen personal connections with your franchisees, build a culture of transparency, and get franchisees excited about their future with the brand.