With the 2023 Liveability Census ramping up, we’re taking a look at the relationship between neighbourhood place experience (PX) and Net Promoter Score (NPS).
NPS is nice and simple and quite widely used in Australia. We have been asking respondents about both measurements for the last five years so we have enough data to be able to see whether the two are correlated. In this context, we’re looking at our neighbourhood data which measures liveability at a suburb or council level. An earlier article dealt with our town centre data and touched on its relationship to NPS.
How do you measure Net Promoter Score?
Firstly, a primer on Net Promoter Score in case it’s something you’re not familiar with. We ask respondents, “How likely are you to recommend your neighbourhood to a friend or colleague as a place to live or spend time in?”. The possible answers to this question range between 0 and 10 as shown here:
If the respondent answers the question with a rating of 10 or 9, we categorise them as a ‘Promoter’. If they answer the question with a rating of 8 or 7, we categorise them as a ‘Passive’. And if their rating is lower than 7, we categorise them as a ‘Detractor’. After collecting a sufficiently large number of responses, we calculate the Net Promoter Score for this neighbourhood by subtracting the percentage of Detractors from the percentage of Promoters. If it’s greater than zero we like to designate it with a plus sign.
For example, if we collect 100 responses, and 30 respondents are Promoters and 20 respondents are Detractors, the Net Promoter Score would be +10, because 30% – 20% = 10%, which is a positive number.
How do you measure place experience?
Place experience is measured by asking the respondent to rate a universal set of fifty place attributes on a scale between ‘Perfect’ and ‘Fail’ (with ‘not applicable’ as an option). For illustration, two of the place attributes are shown here along with the various possible answers:
Each of the answers translates to a number between 0 and 10 which when averaged out across all responses tells us the community’s rating for that place attribute. So, extending our example above, after averaging the 100 responses, Walking/jogging/bike paths that connect housing to communal amenity (shops, parks, etc.) might come out with a score of 6.8 while Spaces suitable for specific activities or special interests (entertainment, exercise, dog park, BBQs etc.) might come out with a score of 6.4.
How are place experience and Net Promoter Score related?
Looking back at the nationwide data we have collected between January 2019 and September 2022, we calculated the correlation between PX for each place attribute and NPS to understand whether one might increase when the other increases. If you have two related datasets, you can perform the same calculation yourself in Excel using the handy =CORREL() function. The results will range between -1 and +1 according to your data. The larger the number, the greater the correlation.
The summary results are shown here:
Correlation of place attributes and Net Promoter Score
Looking at the highlighted attributes, what can we learn?
Firstly, every place attribute has a positive correlation to NPS. This is somewhat expected as both questions ask respondents to express their positivity about (one aspect of) place. In practical terms, it tells us that PX can be used as a more granular, action-oriented complement or alternative to NPS.
Secondly, there is a distinct difference between the most and least correlated place attributes. The attribute with the strongest correlation of +0.54 is Sense of belonging in the community while the weakest (+0.20) is Child services (child care, early learning, after school care, medical).
Our sense of belonging is a completely intangible aspect of liveability but it speaks volumes about what we currently value when raving to our friends about our neighbourhoods. Other place attributes which measure human connections are also highly correlated.
The low correlation associated with child services might be attributable to the fact that those services are used by a minority of us at any point in time, that the perceived quality of these services is only loosely related to the perceived quality of our neighbourhood, and the fact that our selected child care service is sometimes outside our suburb of residence.
Thirdly, Ease of driving and parking has a low correlation to NPS (+0.25). This echoes what we saw in 2019 in our town centre data and adds to the current worldwide chorus — that more active transportation is expected while car-based town planning is passé.
A happy community will continue to attract residents away from places — whether they be towns, states or countries — with lower PX and NPS scores. Working on improving every aspect of liveability is commendable but infeasible. PX provides a handle on what is worth doing now.