How does social responsibility relate to the Net Promoter® Score?

Social responsibility is no longer a ‘niche’, instead it touches every industry around the world, including the software industry.  It is generally accepted that being socially responsible is increasingly important to customers within the software industry (Borderick et al. February 2021).  However, the link between Net Promoter® Score (NPS) and being socially responsible has not been fully confirmed.  Net Promoter® is a relationship metric that measures customer loyalty, and it is one of the best metrics for analysing the entire end-to-end Customer Experience.

Analysis

Indeed, in the latest competitive benchmark research, where we sample 15,420 respondents across the software industry, we trend every brand’s NPS and correlate this with their socially responsible top-two box satisfaction.  The results are quite clear, as figure 1 shows.

Figure 1: Double-Blind NPS and Top-Two Box Satisfaction with being socially responsible.  The scales are arbitrary.

Calculating the specific r2 between being socially responsible and NPS, we find a value of 0.29, which shows a good positive correlation.  From the data, software customers therefore ‘increasingly’ care about being socially responsible, and this is now proven to link to NPS.  Therefore, software vendors must ‘increasingly’ take this brand image attribute seriously.

What can we do about it and how is Micro Focus performing?

Environment considerations are extremely important to customers, and Micro Focus should therefore leverage the latest findings.

Figure 2: Ranking analysis for FY21’RQ4 customers across the whole software landscape comparing how socially responsible customers perceive the brand.

Figure 2 presents the latest socially responsible top-two box satisfaction for each brand* at the worldwide level in software.  This percentage shows the number of customers responding with the top scores.  To take the value of 50% as an example, a way of interpreting this would be that 1 in 2 customers liked how socially responsible the brand is, and, conversely, 1 in 2 did not.  Generally, then, on average, all software companies are not seen as socially responsible (average is 53% top-two box satisfaction) and Micro Focus ranking, or performing, above the industry average, with a score of 60%, is a great feat as we are placed within the top-quartile across all brands within the software industry.  However, we must remember that Micro Focus is ranked 7% higher than the average competitor.  To draw comparison against some of our competitors, we rank: 3% higher than IBM, 4% higher than Amazon, 4% higher than Microsoft,5% higher than Splunk, and 7% higher than BMC when it comes to social responsibility.

*Sample Size Worldwide: n=15,420. Micro Focus n=1,085, and all competitors n=14,335.

Conclusions

We know that being socially responsible is positively correlated with the relationship metric Net Promoter®, and organisations must share, and communicate, ‘how’ environmentally friendly and socially responsible they are.  This means we should think more about the broader vision behind software, and how we can engage customers with this vision.  To gain and maintain customer loyalty, it is critical that we accelerate and integrate social responsibility into every aspect of our company brand. We must give customers the visibility to make fair assessments of our technology, through consumer-level communication about product lifecycles, supply chains, and the environmental impact of our software.  Transparency and traceability not only enhance customer loyalty, feedback, and satisfaction, but equally these extend to the stock market where investors are looking for investible and sustainable projects with good long-term value and rates of return.  Clearly, stakeholders, asset owners, and customers value companies differently based on their commitment to social responsibility. We should continue to consider our impact on people, communities, and climate goals as we build and transform the company roadmap.

Authors: Dr. James D. Borderick, Rosalind Skillen and Kerry Barrett.

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