So often in today’s frenetic business environment, we are challenged to understand what customers think of our brand, our products and services, or both. And many times, in the absence of “doing what we’ve always done,” we search for methods to measure the overall customer experience, and land on…Net Promoter Score.
For the uninitiated, the Net Promoter Score (NPS) has been used for years in many industries as a de-facto standard, by asking one question of a paying customer (not a prospect) at some point in the customer’s engagement with your brand.
“By substituting a single question for the complex black box of the typical customer satisfaction survey, companies can actually put consumer survey results to use and focus employees on the task of stimulating growth.”
— Frederick F. Reichheld, The One Number You Need to Grow (Harvard Business Review, Dec 2003)
That one question is, “On a scale of 0-10, what is the likelihood of referring [brand] to a friend/family member/colleague?”
Since the goal of the entire customer experience, what we call the Customer BuyWay,™ is to convert buyers into brand advocates, some popular brands use the NPS to gauge customer loyalty. In fact, in the Temkin Group’s 2015 Net Promoter Score Benchmark Study, the brands that earned the highest NPS were USAA, followed by Lexus and Mercedes-Benz. Apple and Chick-fil-A, and Amazon also earned high marks, while Comcast, Time Warner Cable, and McDonalds received the three lowest scores. Probably not too surprising for current customers of those brands.
*Temkin Group’s 2015 Net Promoter Score Benchmark Study includes 291 companies across 20 industries based on a study of 10,000 U.S. consumers.
The REAL Value of Your Net Promoter Score
Our thoughts are that NPS (or some form of a referral question) is appropriate for any and every business. According to a 2014 survey, 71% of those who use NPS say it is “very valuable” to their company.
The real value of NPS is not the “number” from a single customer response or even an aggregated summary. Rather, it’s a fantastic starting point to take a deeper dive into understanding a variety of customer attitudes that will help you better manage your existing business, identifying customer and market needs and, more importantly, define opportunities for developing new and enhanced offerings.
5 Steps to Deriving Value from Your NPS
Here are five steps to derive true value out of NPS:
- Ask the question, and ask it consistently
Ask it consistently and at the same point of a pre-defined customer experience stage. An effective NPS strategy is deployed within a more involved customer interaction, and not within touchpoints that are brief and simple.
- Understand the responses and pick your focus points
Pick your focus points. The areas of concern may not always be at “0”, but rather in a bubble of responses at “6 or 7” that could easily be moved to delighted customers who would answer “8 or 9 or 10”.
- Dig deeper without being offensive
If a customer answers “0”, then you probably would want to know the “why.” But knowing why they answered “10” or “5” is also extremely important too. Find your focus points, and go deep.
- Inform your teams
Keep your product develop and customer service teams in the know. The underlying drivers of customer responses are a great, if not the best, source of direct guidance to understand what you’re doing right, what you’re doing wrong, and what you need to do to improve.
- Ask the question againSee how your work has impacted the customer experience by asking the question again. Remember to be patient. The process of improving NPS, and more importantly, improving customer satisfaction, is not always a quick one. There are many market forces always in play, and customer attitudes can — and likely will — change at any given point in time.
Measuring customer satisfaction is a critical component of an effective go-to-market strategy, and Net Promoter is a great method to use.
Remember, NPS should rarely be reported simply as a number. The real value of NPS is found by gaining that deeper understanding into the mind of the customer and how your business is addressing your customers’ needs.
Check out this infographic from Tom Schwab for a helpful explanation of NPS.
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