Written by Vivek Jaiswal | Co-founder, Customer Guru
Measuring NPS by asking the ‘Ultimate question’ is a good start, however, when an organisation sets out to implement it as a measure of customer loyalty, it should be especially wary of considering it as just another question in the feedback survey. This is a sure fire way of how NOT to be successful with NPS.
In itself, the Net Promoter Score is a powerful indicator of customer behavior, and it helps identify the promoters and detractors along with the reasons behind both. Armed with such insights, companies could act on the feedback to recover some detractors as well as upsell promoters. Of course, this requires a fundamental shift in how customer feedback is viewed. Especially when NPS is clubbed with several other rating question. The thing with rating question is that it offers a great way to rate internal departments and place them against each other. But it fails to correlate with customer behavior and that is where it falls short of giving cues on what could be done to improve customer loyalty, and therefore retention revenue.
I am confident that organisations that have successfully implemented NPS did not approach it as just another question in the customer satisfaction survey. There are countless case studies and testimonials on why implementing NPS was taken as a strategic decision by some of the market leaders around the world. Here are a few more reasons why NPS shouldn’t be looked as just another question:
Here’s what Rob Markey, the co-founder of NPS, explained how the Net Promoter System® works in one of my earlier blogs:
At Bain & Company, Fred and I have concluded (and actually written in the book you cite) that there are at least three core requirements for a healthy Net Promoter SYSTEM:
1. That you have a reliable way to sort customers into Promoters, Passives and Detractors (though the exact method you use might or might not include the likelihood to recommend question)
2. That you use a high-velocity closed-loop feedback, learning and action mechanism — that you connect feedback directly and immediately to the employees who need to hear it, and that you follow up with customers whose feedback merits it
3. That the focus and strategy be grounded in growing the business profitably and sustainably by earning customer (and employee) loyalty
Bain’s approach to customer loyalty focuses on developing a company’s capability to deliver on these three requirements. Importantly, as you point out, the exact method of determining whether customers are promoters, passives or detractors is less crucial than that there be a reliable way to do it and that it reflect customer behavior and economics. Importantly, in our experience working with dozens and dozens of client companies, the Net Promoter Score (based on likelihood to recommend measured on the 0-10 scale) has most often turned out to provide the best balance of simplicity, employee inspiration, and statistical validity. We’ve experimented with many other questions and indexes based on multiple questions. While not the best for every single situation, NPS is far and away the methodology that turns out to be best in the vast majority.
If the point of your post is that it’s the SYSTEM that generates business impact, then we’re fully aligned. You can read more at http://netpromotersystem.com.
When implementing NPS as a metric, follow the 3 M’s to succeed with it: measure, monitor, and manage. Without closely monitoring the fluctuations in NPS and constantly taking action on detractor issues, it will be impossible to track the benefits of using the metric. Additionally, if you could slice and dice the NPS score across customer segments and geographies, you would get insights which were completely hidden from your view. It phenomenally expands your ability to resolve customer issues at granular level while also identify drivers that may be affecting only a segment of your customer base and causing them to switch. Wouldn’t you like to have an opportunity to recover them?
The Net Promoter Score inherently focuses on going beyond “satisfying” the customers. On an NPS scale, Passives are satisfied customers. A metric that encourages an organisation to delight its customers and offers the insights to act on that motivation cannot be just another question in the customer satisfaction scale. It is already asking for more from your customer feedback!
Have you been struggling to sell the value of implementing NPS as a system in your organisation? Or have you heard others refer to it as ‘just about adding another question’ in the survey? I would love to hear how you’ve overcome such objections. Please do share your feedback and comments below.
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