Yes, that’s right, a negative NPS can be good! There are many considerations when interpreting an NPS, and you simply cannot take the absolute score at face value*.
One of the challenges with NPS is communicating negative scores to senior management. By their nature, negative scores are not desirable and are perceived to represent inferior performance. However, a negative score does not necessarily mean that your business is not positioned for growth and profitability.
Obviously higher is better, it means you have more promoters and/or less detractors, so naturally we are all rightly striving to increase our NPS. However, to understand the strength of your score one needs to consider the relative positioning to competitors as well as the absolute value. Absolute values in isolation can be misleading. For example, you may improve your NPS, but find that you were in a better position when your score was -10 compared to when it is +10. Why, because of your position relative to the competition.
Relative Positioning
Your competitors have the potential to inhibit your future growth and profitability regardless of how high or positive your NPS is. If all your competitors are on -20 and you are on -10, then you are better placed for growth than if you were on +10 and the competition was on +20, despite having a ‘visually’ better absolute score.
Similarly, a declining score is not necessarily all bad news. If your competitors have fallen further, then your relative position will have improved, putting you in a stronger place. We have seen this happen when regulatory or consumer confidence causes a sector downturn. In essence, it does not matter so much if your score comes down if competitors come down further. However, one does also need to consider momentum when interpreting NPS.
Momentum
Another of the challenges of NPS is its volatility. How many time have we seen NPS drop one month then recover the next. Interpreting these point to point shifts can be dangerous. Significance testing aside, this can often just be noise. One needs to look at long-term trends to understand your momentum, and this needs to be considered alongside your relative positioning.
You may have the market leading NPS, even a positive score, but if you have been trending down while your competitors are improving then you are not necessarily in the position for growth that a spot score would indicate.
Get into the detail
Don’t feel constrained to just look at the score and the segment proportions, get into the detail. You have 11 points on the scale, use this and start thinking laterally. 0-6 can cover a lot of people, and there can be positive momentum within this band that is not evident at the segment level. We often see that those who give a 4 or 5 are ‘true’ passives, and if there has been a shift from 0-4 to 5-6, then you are improving your position albeit without shifting your NPS.
In summary, there are many ways to interpret your NPS and while none are necessarily wrong, a true understanding of your position can only come from fusing them all; absolute score, relative position, momentum and getting into the detail.
* Please note that this article is focused on relationship not transactional NPS.