Customer Satisfaction/Net Promoter Scales - 4,5 or 10 point?

I’d like to share an excerpt from the white paper “American Customer Satisfaction Index (ACSI) Methodology” written by Russ Merz, Ph.D.
Research Director at ForeSee Results.
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"A common basis for recommending 5-point scales often rests on the assumed inability of people to reliably discriminate more than 5 levels on a scale, where offering more than 5 levels would introduce error into the measurement and offer weaker correlations and lower explanatory power. Research has clearly shown that people can handle more than 5 pieces of information at one time, particularly depending on their experience in a given area and ability.

A 10-point scale is within capabilities of most people with little experience, and in areas of professional expertise people are able to and will make much finer distinctions.

Because customer satisfaction data is positively skewed (where customers less frequently use the lower ends of scales), a 5-point scale is really closer to a 3-point scale, and a 10-point scale behaves more like a 7-point scale.
Since most customers don’t really use the lower ends of scales (values 1 and 2 on a 5-point scale) and mostly use values 3, 4, and 5, a 5-point scale offers little opportunity to differentiate positive responses. This negative skewness
introduces error into the measurement process and loss of critical, meaningful information compared with a 10-pointscale.

Societal norms and the fact that customers typically “like” companies they do business with tend to limit the number of customers who use the very lower ends of response scales. In most cases, if a customer is so completely
dissatisfied as to have the need to use the lower ends of the scale, they will leave and stop doing business with the company. As a result, the 5-point scale effectively turns into a 2- or 3-point scale due to limited response at values 1 and 2.

This “compression effect” also militates against the common assumption that 5-point scales offer a mid-point that can be considered as the “average response”, a characteristic not present in 10-point scales. The mid-point argument is only valid if respondents use, or at least contemplate, all points of the scale, and as discussed above, they do not, and responses are consequently negatively skewed.

The use of 10-point scales significantly enhances the information that is transmitted in the surveying process.

There is one area in which 10-point scales are not appropriate relative to 5-point scales – that is when there is a desire to label each response point within the scale (e.g. 1=poor, 2=not so good, 3=satisfactory, 4=good,
5=outstanding). There are several arguments for not attaching labels to response categories, most notably
1) added error due to violation of the interval/ratio data assumption, where it can no longer be assumed that the distance between 1 and 2 is the same as the distance between 2 and 3, and so forth, and
2) respondent burden and increased questionnaire length."

The four point index's strongest selling point is that if there is no "middle ground" (#3 in a five point scale), you force your customers into telling you if you were good or bad. The five point scale's strength, on the other hand, is that if someone is feeling complacent about the service they received, they can let you know with that #3 (or "neither satisfied nor dissatisfied"). The ten point scale allows your customers to give you a wider distribution, and thus you could perhaps see the needle move in more subtle ways over time, but I've heard some analysts do not like it because it is so broad that some customers start picking one extreme or the other just to get through your survey. Another possible criticism is that while two customers might tell you they were "mostly satisfied" in a four point scale, one might give you a six and the other an eight on a ten point scale, and that by broadening the choices, you actually have less opportunity to predict consumer behavior or build effective models using multiple regression techniques.

One of the drawbacks of a four or five-point scale is that some customers will never give the highest score, thus adding a bias and an inability to distinguish on a great customer experience. Those customers may give you a "9" on a ten-point scale and you can take away that you delivered a valuable customer experience.

For other white papers from ForeSee Results, please visit http://www.foreseeresults.com/White_Papers.html