HE Research Snippet 5 – UK universities and their Net Promoter Scores
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Net Promoter Scores (NPS) have been touted as the ‘Ultimate Question’ for business leaders because of their strong positive correlation with revenue growth. Bain & Co, the co-developers of the metric, claims that companies and organisations with the highest scores in a sector can expect to grow at over twice the rate of competitors1.With so much currently at stake for the HE sector, we wanted to find out which HEIs have the highest (and lowest) scores.
NPS is based around a short question which is used to determine whether customers are ‘promoters’ or ‘detractors’ of a brand or organisation2. The approach has its critics (and we do accept much of this as valid3). But, on balance, we believe it is a simple and useful addition to the armory of market research customer satisfaction tools. That’s why we set about collecting and comparing the Net Promoter Scores of nearly every HEI in the UK based on the views of new full-time undergraduate students in our Higher Expectations survey. In fact, we started doing this in 2010/11 so we now have ratings for almost 130 HEIs based on over 36,000 new starters, representing the views of the sector’s new generation of brand ambassadors.
So what did we find? Based on our 2011/12 data (our most up-to-date data is now available), we’ve been able to make two key observations:
UK HEIs yield a very wide range of Net Promoter Scores.
The top performing institution gets a score of +81 while the lowest performing gets a score of -24 (the theoretical range is from +100 to -100). Traditional universities generally score higher than Post ’92 universities. But among the elite ‘research intensives’ there are some surprisingly low scores.Within mission groups the range is narrower but is still surprisingly broad. Figure 1 (below) shows this range, including the sector and group averages.
Figure 1: Average NPS by institution within mission group
Base: Full-time undergraduate starters at UK HEIs – 13,050
Within each mission group there are typically one or two clear ‘stars’, one or two clear ‘laggards’ and a very wide range of scores in the middle, with a cluster towards the centre; in other words, a normal distribution. If Bain & Co is right, it’s important that HEIs know where they sit on this distribution. And almost more important is that HEIs know what it is that the stars and laggards are doing right – and wrong. Subscribers to Higher Expectations get access to this granular data.
Furthermore, starting this year, we have been able to collect the open-ended responses from the promoters and detractors for each HEI, asking them to describe, in their own words, why they give such positive or negative scores. This revealing testimony is now available to all ‘Module 3’ subscribers at a granular level via our ‘Word of Mouth Search Engine’4.
HE, as a whole, performs well in terms of Net Promoter scores.
The data we have collected across the sector shows that there are 3.6 advocates for every detractor. On average, the HE sector has a score of 40. To provide some context (and although it is difficult and perhaps inappropriate to compare NPS across sectors/industries), these scores compare favourably to scores in a number of industries included in Satmetrix’s 2012 European Net Promoter Industry Benchmarks, some examples of which are shown below in Figure 2.
Figure 2: Satmetrix’s 2012 European Net Promoter Industry Benchmarks
|Rank||Banking||Mobile phone handsets||Computer hardware||Internet service providers|
|1||First Direct – 62||Apple iPhone – 69||Apple – 59||Virgin Media – 16|
|2||Nationwide – 33||Samsung – 49||Sony – 44||Sky – 15|
|3||Natwest – 16||Acer – 33|
Higher Expectations 2012/13 presents views of the first cohort of students paying up to £9,000 per year for their degree. Make the most of this opportunity to discover the verdict on this ‘new order’ of HE – and how your institution fares.
To get your copy of Higher Expectations 2012/13 (as well as access to previous years of data either via aggregated reports, time series reports or SPSS data files) or to ask any questions about the study, just contact James MacGregor on 020 7374 0997 or at james.macgregor@YouthSight.com.
Please note, our ‘early bird offer’ of a 5% discount on all Higher Expectations purchases over £5,000 ends on 31st March.
HE DECISION-MAKING DASHBOARDS
3 interactive tools made for UK HEIs, for exploring and understanding undergraduate and post-graduate decision making, competitor analysis, and for refining marketing communications.
Or contact James MacGregor via email or on 020 7374 0997.
2The Net Promoter Score asks ‘customers’ (or other stakeholders) how likely they would be, on a scale of zero to ten, to recommend a company/organisation. Depending on the scores they give, respondents are divided into three categories: Promoters, Passives, and Detractors. Satmetrix, who co-developed the tool with Bain & Co, describes these three groups as: Promoters (who give recommendation scores of either 9 or 10) are loyal enthusiasts who will keep buying and refer others, fuelling growth. Passives (who give scores of 7 or 8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. Detractors (score 0-6) are generally unhappy and can damage a brand and impede growth through negative word-of-mouth. The NPS approach subtracts the percentage of Detractors from the percentage of Promoters, thereby creating a single score that provides a measure of customer satisfaction and allows for comparison with competitors and monitoring over time.
3Critics of the tool dispute the claim that NPS is more effective than other metrics at predicting growth, suggesting that a composite index based on multiple customer satisfaction questions can be more accurate. Another criticism argues that important information gets lost by simplifying customers into just three groups; ‘promoters’, ‘passives’ and ‘detractors’.
4The Higher Expectations ‘Word of Mouth Search Engine’ also offers access to verbatim responses to a range of other important open-ended questions including: ‘What’s the key reason you decided not to go to [university applied to but not attended]?’; ‘How could [university applied to but not attended] have made you more interested in attending?]; ‘If there was one key reason you chose your current university over your other choices, what was it?’.