Net Promoter Score
Potential for future growth is measured using the NPS (Net Promoter Score) methodology. This is a well-recognized indicator for member loyalty and the potential for future organic growth, and is often used within the financial industry. It is calculated by subtracting detractors (those who answer with a 0 – 6) from the promoters (those who answer 9 or 10) to the following question:
“How likely are you to recommend the credit union to a friend, family member or co-worker?”
We take this a step further to better understand the "why" behind your organization's NPS score. How do we do that? By asking, of course! Simply knowing your score and comparing to similar credit unions won't provide actionable information. And, it's important to understand inherent differences between your credit union and others that may naturally effect your NPS score.
For example, a SEG-based credit union that serves a large, single sponsor employee with naturally high turnover may find that their NPS score is lower than peer averages. When analyzing the reasons members give behind their score, they find that 20% of detractors (those stating they are not very likely to recommend) indicate the reason is related to discontinuation of employment. If I no longer work there, I can't refer coworkers. And due to membership eligibility requirements, I'm unable to refer friends. For these detractors, their answer doesn't indicate a displeasure with the credit union. This is important to understand for realistic NPS expectations and goals that are unique to your organization's situation. Digging into the underlying reasons behind willingness, or lack thereof, to promote your credit union will bring light to prioritization of enhancement and improvement opportunities.