Why NCS is More Valuable to Businesses Today than NPSBy Evan Snively, Senior Client Engagement Associate
For decades, Net Promoter Score has been a standard catch-all brand sentiment score. Part of the NPS appeal is its simplicity, promoters minus detractors. For example, if 70% of people are neutral on a brand, 25% are promoters, and 5% are detractors, then the brand’s NPS is 20.
But someone may be a promoter for multiple competitive brands, say Nike and Adidas for instance. Simply measuring NPS in that scenario doesn’t dive deep enough for sophisticated marketers looking for their competitive advantage. They don’t just want to know who supports their brand at a high level, they need to know if a potential customer is forced to choose one brand over the other, what would tip the scales?
In today’s world, we are seeing one answer appear with increasing frequency: the scales are tipping because of a brand’s POV – their Portfolio of Values.
Brands who harness the power of their Portfolio of Values (POV) are more likely to establish a customer base of permanent, passionate brand advocates.
It’s a scary proposition, I know. For years companies have been taught to “stay in their lane” and “stick to what you do.” Outwardly supporting a cause or social movement runs the risk of turning off a portion of your addressable audience and losing customers simply isn’t good business…or is it?
The truth is consumers use brand values as a mental heuristic – a short cut for the brain. When a brand shares their values, customers don’t need to weigh all the variables, which allows them to save time and feel good about their purchase. Decision paralysis melts away and is replaced by brand loyalty.
Therefore, it is essential to measure two related, but distinct factors:
#1 What is your Real POV? (where do customers perceive your brand stands on a given issue or cause?)
#2 Where do your customers themselves stand on that same issue or cause?
Enter the Net Cause Score – or NCS. Net Cause Score is a tweaked NPS; instead of measuring a brand’s sentiment, it measures the risk and reward of supporting a cause.
This is important because without quantitative measurement defining the upside and downside of a cause, brands would be flying blind and run the risk of isolating customers that they rely on to support their business. But we are living in the era of The Values Economy and there is an upside that comes in the form of loyalty and increased wallet share when companies can successfully navigate the tricky waters of brand values. (shameless plug: Chapman & Co. helps companies do exactly that through our “Return on Values Roadmapping” service)
Here are the basics of NCS: instead of promoters and detractors, NCS uses values-aligners minus values-repellers. Given a choice between two equal brands, one that supports a cause and one that does not, values-aligners are the people who would strongly pick the cause-supporting brand. Values-repellers are people who would pick the competing brand.
The best way to see how this works is through an actual example.
Vrity, a data company specializing in brand values measurement (and C&Co.’s partner for our Return on Values Roadmapping service), asked 1,000 US consumers a hypothetical about two unnamed brands — one that supports Black Lives Matter and one that does not. Then, they asked those consumers, all else equal, which brand they would purchase and if they would be willing to pay more for it?
- 40.1% of the audience said they would pick the BLM brand and would be willing to pay more for it. These are the values-aligners. The implication is not that brands should raise their prices, but that willingness to pay is a fantastic indicator of brand preference, and a higher bar than just choosing between two equals.
- 10.3% said they would pick the non-BLM brand, even at the same price. These are the values-repellers.
A little subtraction gets us a Net Cause Score of 29.8 for the topic of Black Lives Matter. Supporting racial equality can be polarizing, but overall, it is a net positive for the brand.
Let’s take NCS a level deeper. People’s values vary wildly depending on the audience. For example, if a brand is targeting a younger demographic, people between 18-35 years old, the numbers in the example change. Now, 49.5% would pay more, and 8.0% would leave, for a Net Cause Score of 41.5. Nearly a 12-point increase. And this score goes even higher for high income households. But not all NCS scores are positive. If the brand’s target demographic was 60+, for example, the NCS for Black Lives Matter would drop to -6.7 — a net negative for a brand.
Of course, having a strong Portfolio of Values is not just about following what is popular. Even if a cause has a negative NCS, some values-driven brands will still act.
Either way, it is paramount for brands to have data in hand that will allow them to quantify the potential impact of their actions and adjust for risks.
Utilizing the simple NCS equation can help brands make informed decisions about the values and causes they want to promote. Brands are often risk averse. A decision that turns 10% of the population against you takes confidence, and in today’s business world, confidence means having data. The Net Cause Score is an easy-to-understand metric that organizations should utilize as they move towards more data-driven decision making in the emerging field of values marketing.