Meet & Engage

What is Net Promoter Score and How Can It Be Used By Recruiters?

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You’ve probably heard about it, but what even is it?

Net Promoter Score (or NPS) is a management tool that can be used to measure the loyalty of an organisation’s customer relationships – or in our case, candidate relationships.

This means that if your organisation’s NPS is higher than those of your competitors, you will likely outperform the market. So by improving your NPS, you’ll also improve your business performance.

NPS started with a team from the management consulting firm, Bain & Co, after they launched a research project to determine whether a different approach to the conventional customer satisfaction surveys would prove more fruitful.

They tested a variety of questions to see how well the answers correlated with customer behaviour and one question worked best for most mature, competitive industries – the ‘likelihood to recommend’ question.

High scores in this question equated strongly with repurchases, referrals and other actions that contribute to a company’s growth.

A Net Promoter Score is calculated using the answer to a single question: ‘How likely is it that you would recommend [brand] to a friend or colleague?’. Answers are gathered using a 0-10 scale.

Respondents are grouped as follows;

  • Promoters(score 9-10) are loyal enthusiasts who will keep buying and refer others, fuelling growth
  • Passives(score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings
  • Detractors(score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

Subtracting the percentage of Detractors from the percentage of Promoters gives us the Net Promoter Score, which can range from a low of -100 to a high of +100.

An NPS that is above zero is good, 50 is excellent and 70 is world class.

Most organisations also ask customers the reasons for their rating through an unstructured, open-ended question. These responses can then be provided to front-line employees and management teams for follow-up action.

Whether it generates positive or negative results, a NPS for candidate experience is something all recruiters would benefit from.

Previously, NPS has been predominantly used by marketing departments to understand customer loyalty, but now it’s providing recruiters and Employer Brand managers a detailed overview of its relationships with its candidates.

Whilst an NPS won’t explain why some candidates are loyal to your brand, and others aren’t, it will give your candidate experience a much-needed benchmark from which to grow.

Being able to measure performance is the first step to improving it.

Those candidates who are promoters are effectively free ambassadors for your brand and will likely recommend friends and colleagues to apply for roles with the organisation.

On the flip side, detractors are just as likely (if not more) to spread the word about the bad experience they had.

This negative review creates much more work recruiters who will have to try even harder re-engage job seekers with the company. Whether it generates positive or negative results, a NPS for candidate experience is something all recruiters would benefit from.

But it doesn’t stop there, considering NPS to measure levels of candidate experience can have a direct impact on business growth as a whole. Particularly if the organisation is in a competitive market.

Virgin Media analysed their 2014 Rejected Candidate Survey results and found that many rejected candidates were existing customers. It lead to 6% disconnecting their services with Virgin Media within a month of rejection as a direct consequence of the bad candidate experience they had received.

Virgin Media estimated this was around 7,500 customers over the course of the year and the total revenue loss to the business was calculated at £4.4 Million.

Equally, rejected candidates who aren’t existing customers could potentially become customers after going through a positive candidate experience. Either way, it shows that there is a direct correlation between candidate experience and business revenue.

If you haven’t already, have a read of our other blog post, 6 Reasons Why Recruiters Are Using NPS to discover more of the fantastic benefits behind using Net Promoter Score to measure candidate experience.

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