1

Net Promoter Score Case Study

The Net Promoter Score (NPS) is an extremely valuable tool for companies who want to

analyze customer opinions in order to make financial, marketing, and operational decisions. The

NPS scores 0-10 on the question, “How likely is it that you would recommend us to a friend or

colleague? (Reichheld)” The percentage of promoters minus the percentage of detractors finds

the final score. Although it would seem that a singular question isn’t efficient at fully

understanding where customers stand, it is the quantification of these answers that do provide

efficiency and accuracy in looking at customer satisfaction. Promoters (those who answer 9-10)

account for 80% of positive word of mouth, whereas detractors (those who answer 0-6) account

for 80% of negative word of mouth. Word of mouth is one of the most effective ways of

reaching customers, although it is hard to control, and at the same time, hard to analyze. With

NPS score analysis though, members of a firm can look at the dollar worth of promoters and

detractors, and decide whether it is more important to allocate spending towards decreasing

negative word of mouth, or keeping promoters happy, and positive word of mouth flowing.

Retention rate can be estimated using the NPS. Looking at the average time that promoters,

passives (those who score 7-8), and detractors are customers of a company can help find this

factor. Prices can also be found based on the net promoter score. Members of the company can

look at price sensitivity among the groups, the net promoter score, and the value associated with

promoters versus detractors to see how price will affect their profitability and customer

satisfaction.

A net promoter score can have different connotations depending on the industry of the

company. A score of 40 could be at the top of their game for a company in the parcel delivery

service, but be completely average in the computers and tablets industry. The range of net
 2

promoter scores can also vary wildly depending on industry. Factors such as customer taste,

product differentiation, and competitors can cause these differences. For example, the fast food

industry has a range of 54 percentage points, with the lowest being -1, highest being 53, and the

average at 30. Whereas, the parcel delivery service has a range of 14 percentage points, with the

lowest being 28, the highest being 42, and the average at 34 (NPS-benchmarks). The large

difference in the range of NPS scores can be attributed largely to the demands of the customers

in these industries. With fast food, customers have very different opinions of the foods they eat.

Things such as spice, saltiness, shake thickness, and sauces, can wildly change the opinions of

their customers. People who get fast food tend to have varying tastes with every product. On the

other hand, in the parcel delivery service, customers have a very specific and common

expectation of their services. Customers want their packages to be delivered on time, without

damage to the package. There isn’t much customization that has to be done in this industry to

stand out from competitors, because differentiation isn’t a priority of customers.

To give a closer examination of net promoter scores in companies, Dunkin Donuts has an

NPS of seventeen. It is ranked 43rd among its competitors for net promoter scores. The

breakdown of demographics can also show who consists of their promoters and detractors. The

company’s score could be attributed to their allocation of budget. For example, Dunkin Donuts

spent $442 million on advertising in 2020. Dunkin Donuts had been in the works creating a

loyalty program that gave the ability for frequent and loyal customers to get free coffee and

attractive deals the more they spend. Dunkin Donuts, customer service, on the other hand, hasn’t

had any major recent projects in the works. Dunkin Donuts focuses on retaining their loyal

customers, then they do on making detractors into passives. Often, in the fast food- coffee

industry, consumers have their preferences, and passives of one brand, are already loyal
 3

promoters of another brand. Thus, the Dunkin Donuts versus Starbucks rivalry. Dunkin Donuts

net promoter score reflects its values and spending allocations.

 4

Bonilla, B. (2021, November 18). Dunkin' picks anomaly as its creative agency. Ad Age.

Retrieved May 7, 2023, from

https://adage.com/article/marketing-news-strategy/dunkin-picks-anomaly-its-

creative-agency/2380996#:~:text=In%202020%2C%20Dunkin's%20U.S.%20ad,to

%20Ad%20Age%20Datacenter%20estimates.

NPS-Benchmarks. Delighted. (2022, April 28). Retrieved May 7, 2023, from

https://delighted.com/nps-benchmarks

Reichheld, F. (n.d.). The Microeconomics of Customer Relations. Harvard Business

Publishing Education. Retrieved May 7, 2023, from

https://hbsp.harvard.edu/download?url=%2Fcourses%2F1015128%2Fitems

%2FSMR197-PDF-ENG%2Fcontent&metadata=e30%3D