When times are tough, people look for advice and reference. Are your customers recommending YOUR services when they are consulted? How do you measure its likelihood and direct your organisation’s efforts to achieve this specific goal? An approach described by Fred Reichheld, called Net Promoter® Score or NPS® has been effectively converted to a program that could drive this focus.
An NPS program can energise your organisation to focus on what is most important for your business – happy customers who become your best salesmen. NPS begins with a survey question – “On a scale of 0 – 10, what is the likelihood that you will recommend Company XXX(us) to your friend or colleague”. The basis is simple, a satisfied customer is more likely to recommend your product or service to their colleagues. Customers that actually recommend you drive faster adoption through their reference and directly influence new customer acquisition. The NPS approach puts a skew on the results by calling customers that respond with scores of 9 and 10 as the Promoters and those with scores of 6 and below as the Detractors. Your NPS score is %Promoters minus %Detractors, with scores of 7 and 8 simply being ignored as Passives.
Reichheld goes on to present data that shows the NPS score is directly correlating to organic growth of businesses, citing examples from the US business history. However, there is also much controversy about this approach with traditionalists berating the obvious simplicity of the program and the arguing that the converse relationship is untrue. Yet, from our experience, the learning has been quite the contrary. While the NPS approach is simplistic, it is a great platform to re-energise the organisation if applied within a system that drives ownership and action. Here are some lessons from our experience:
Asking the key question is only the first step. However, before this is done, it is important to understand the touch points of interaction with the customers. What are the points of interface, both from transactional level of payment or delivery and from a relationship level of advise or assistance. Then, after starting a dialogue with your customer, it is imperative to take the logical next step to understand the reason for the score. Carefully crafted questions can help identify that one bone of contention that troubles the Detractors, or the one aspect of your service that gets Promoters so excited. The design of the questionnaire needs to mirror the operational infrastructure of the business. A thorough analysis of responses needs to be carried out and translated into action applied at various levels ensuring accountability for successful completion. Of course, senior management sponsorship is critical to ensure the program’s success.
Enria’s experience in NPS has helped unearth subtle but critical elements of customer pain within organisations that has helped design corrective measures. Our methodology has also helped reveal services that are perceived higher by customers than what was internally understood.
® Net Promoter, Net Promoter Score and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld. Visit their site.
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