Written by: Vivek Jaiswal | Co-founder, Customer Guru
SPIN selling methodology applied to NPS
I read SPIN Selling by Neil Rackham last summer and it’s been nothing short of life changing. Written almost three decades ago, the teachings of Neil Rackham still applies and is widely practiced by sales people in every industry. I feel it applies to more than just sales; it can be used to break down and solve any problem! Recently, I used SPIN to explain NPS to a sales executive. It was a chance discovery and made a lot of sense. I think it’s worth sharing and would love to hear your opinion on the same.
For those who are new to SPIN, it stands for Situation, Problem, Implication, Need-payoff. It is a widely used sales methodology that focusses on first identifying a problem, unearthing its business implications and finally establishing the payoff or value of solving that problem. Here’s how it applies to Net Promoter System:
Understand the Situation
The overall Net Promoter Score (NPS) gives a high level view of the situation. NPS can be broken down into number of promoters, passives, and detractors which gives a deeper understanding of the situation. By slicing and dicing the NPS data across customer and market segments, businesses are able to analyse the spread of promoters, passives, and detractors across their business segments. It gives a thorough view of where they stand in their customers’ eye.
Uncover the Problem
Once the situation is analysed by looking at NPS from all sides, the next step is to identify problems that are causing detractors and passives. This is achieved by going through customer comments to learn about the drivers of dissatisfaction. While going through the comments, it is possible to categorise customer pain points into groups so that similar problems are tackled together. There are intelligent NPS solutions in the market that could do this easily for you. Categorising customer pain points gives an easy way to do a root cause analysis too. The number of detractors associated with a particular problem gives an indication of how big the problem may be.
Decipher the Implication
Just like in sales, it is easy to lay out the situation and identify the problems in NPS too. However, interpreting the implication is as tough a job for an NPS expert as it is for a sales person. Experienced sales people do not jump to offering solution once they have identified the problem, instead they help the client work out the implications of the problems. This motivates the client to take corrective action.
Similarly, in NPS, it becomes important to identify the implications of customer issues that are creating detractors and passives. This can be done by formulating the economic value of detractors that shows how much business would a detractor take away if it was to leave. On the other hand, too many detractors bring up the service cost too. Detractors complain more frequently, thereby consuming more customer service resources. Detractors could also increase customer acquisition cost because of the bad reviews they might put on social media and other review websites thereby increasing the marketing spend.
Establish the Need-Payoff
Once the implications are ascertained, Neil Rackham points out that clients should be guided to focus on solving the problem. Through the need-payoff step, a sales person helps identify the positives of solving the problem, apart from just avoiding the implications of the problem. In NPS this could be achieved by showing how much value could a company retain by resolving customer issues and converting detractors into promoters. While this is easier said than done, it is enough motivation to take action on customer issues and helps create a good business case for taking certain long term strategic decisions.