Over the past decade, there have been substantial shifts in tourism that have resulted in the growing importance of the delivery of outstanding travel experiences. High satisfaction with travel experiences is critical to achieving increased visitor spending, longer stays, repeat visits and positive word-of-mouth referrals. Destination advocacy, either face-to-face or through electronic media, is critical in attracting first time visitors to British Columbia.
To address these shifts, a key goal of Destination BC’s corporate strategy is for British Columbia to become the most highly recommended destination in North America. The Net Promoter Score® (NPS®)2, developed by Frederick Reichheld and Bain & Company in 2002, is a simple metric that can be used to measure the intention to recommend/refer a travel destination, organization or sector and is also an indicator of overall satisfaction with the travel or customer experience. Therefore, Destination BC actively encourages its tourism partners (e.g. businesses, communities, sectors) to measure and increase their NPS. This document provides an introduction to what the NPS is and how it is currently being used in the tourism industry.
More than a decade ago, Frederick Reichheld and his research team set out to determine a simple and practical indicator of what customers where thinking and feeling about organizations they did business with. The research, published in a 2003 Harvard Business Review article3, identified that one question was most effective in determining loyalty and predicting growth. The question is:
How likely is it that you would recommend [Company X/destination X] to a friend or colleague?
Research also found that an 11-point response scale, with anchors of 0 (not at all likely) and 10 (extremely likely), is most effective for this question. Responses are then categorized into three groups:
NPS is calculated by subtracting the percentage of detractors from the percentage of promoters.
Since 2003, several books have been published about the NPS. The authors point out that hundreds of businesses in a variety of industries have adopted NPS, illustrating that customer service is at the core of business operations. The NPS helps organizations measure customer loyalty and engagement, and utilize consumer feedback (via NPS customer surveys) to drive operational decisions to improve consumer experiences.
Since the development of the NPS, published reports outside of the tourism and travel industry have summarized the following key findings:
The intention to recommend a travel destination, reported by the NPS, is a proxy measure of overall satisfaction with the travel experience. Satisfaction with the travel experience and the intention to recommend greatly increase the likelihood of a return visit to British Columbia. Word of mouth advocacy, either face-to-face (or other one-to-one means e.g. telephone, or email) or various electronic and social media platforms (sometimes referred to as e-word of mouth), is critical for attracting first time visitors to BC. NPS is regarded by researchers as the question that best predicts the future growth of customer centric businesses, like those in the tourism industry.
Overall, the advantages of tracking NPS for the tourism industry include:
For these reasons, adoption of the NPS as a key performance indicator is becoming more and more common for tourism organizations. In BC, tourism organizations that measure and track NPS include:
In addition, numerous ski resorts and destination communities across the United States have been tracking NPS over the past several years.
Published NPSs for tourism destinations include:
Research has shown that NPS in the tourism industry can vary by:
Destination BC has developed a guide, “Measuring NPS in BC Communities.” The guide provides details on recommended approaches for measuring NPS at a community level, which can be adapted to regions, sectors or business level. A summary of this guide has also been developed which is available on Destination BC’s corporate website.
For more information: TourismResearch@DestinationBC.ca
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