What The Creator of NPS Says Your Score Is Really Measuring

3f8a746More businesses are beginning to recognize one of their most underrated assets: their customer promoters. These loyal advocates are valuable because they have higher retention and up-sell rates, and they tend to refer more high-quality leads.

So, how do you identify these uber fans and encourage them to bring their friends to the party?

One way is a Net Promoter Score (NPS) survey, which asks a single question: How likely is it that you would recommend our company/product/service to a friend or colleague?

Fred Reichheld, creator of the NPS system, a Fellow at Bain & Company, and author of The Ultimate Question 2.0, learned that a customer’s eagerness to recommend your brand to a peer is a powerful indicator of your company’s potential to grow. “A recommendation is a sacred thing,” says Fred. “Most people consider their reputation to be their legacy. If they feel so good about an organization that they are willing to stake their reputation on it, that company has touched their life.”

However, he has found that many companies misuse the NPS system or misinterpret results. At its core, NPS doesn’t just measure customer satisfaction. Fred recently wrote that NPS indicates your employees’ ability to “help enrich the lives of their fellow human beings.” This means the key to increasing customer satisfaction is by fostering employee advocacy first.

Fred discussed how to identify and empower your brand’s promoters at Advocamp 2015, the first-ever event focused on how companies can build relationships with their advocates to reach business goals.

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Here are some of his insights and best practices for using the NPS system.

Best practices for increasing NPS survey participation

A one to two percent response rate to your survey is too low to have statistical accuracy. “Horrible response rates are the soft underbelly of the customer satisfaction movement,” says Fred. “The best companies can get 60 to 80 percent response rates. It’s not cheap, or easy, but it’s meaningful.”

Fred suggests asking customers if they’re willing to respond to two questionnaires at the start of a new customer relationship, or at the beginning of the year for existing customers. Then, ask them what format they’d like to receive them in (email, phone, etc.). Make sure it’s clear that you value their feedback and offer an incentive for participating. He recommends rewarding customers with a bonus service or upgrade for a period of time.

Also, keep the survey as short as possible. The two vital questions you should ask are “Would you recommend us?” and “Why, or why not?

You’ve got your score. Now what?

If you receive a score between 0 and 6, get in touch with the customer within 24 hours. “There’s nothing worse than asking someone for feedback and giving them no response,” says Fred. “It feels like a waste of time, and like the brand doesn’t care.” In most industries, detractors can cause a negative net value to your brand, so fixing the issue while it’s still fresh in the customer’s mind is important.

Don’t expect your survey results to give you enough insights to solve the problem. “Have a conversation to dig in the root cause of your customer’s score,” says Fred. Only the most obvious answers will come through in the survey data.

It’s also a good idea to speak with your happiest customers to find out why they gave you a high score. This will help you recognize who or what is creating customer advocacy. Advocates will promote your brand to their peers, share positive reviews, and moreif they’re motivated properly. This means going beyond creating traditional loyalty programs for your best customers. “Most loyalty programs are marketing schemes that pay customers for information that is used to sell stuff back to those same customers. I don’t see much loyalty in that,” says Fred. “There’s enormous potential to do better.”

Once you have discovered the reasons your advocates love you, share those findings with your entire organization. Fred says this is a better method than letting the survey findings inform your company’s strategy from the top down. “There aren’t a lot of successful big strategic moves that come down from HQ at most companies,” says Fred. “It should be thousands of little lessons learned through the branches of your organization.”

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Boost your NPS score through employee engagement

“It’s hard to imagine a company creating customer promoters unless its frontline teams are enthusiastic advocates of the company,” says Fred. Instead of focusing on perks like ping-pong tables or free beer, find more ways to make employees feel like valued members of your team. “Employees are happiest when they can create a great experience for customers.”

Recent Bain & Netsurvey search has revealed that employee engagement decreases as you move down the org chart. This means engaging frontline sales and service staff—who interact with customers the most—is imperative. Fred says the best leaders give their staff the chance to provide meaningful service and earn standing ovations from customers.

An important first step is to ask employees what they need to help them delight more customers. “Treat this information as seriously as you do customer feedback. Employees will answer if they think you’ll take action,” says Fred. Making employee surveys a part of your organizational learning and accountability will boost engagement.

Fred also recommends you do not link your employees’ bonuses to NPS scores. Doing so may cause them to ask only happy customers to take part, or they may attempt to manipulate scores—which destroys the purpose of getting honest feedback.

To join in the Advocamp 2015 conversation, check out our VIP Community.  

Beyond NPS®: Identifying Advocates And Inviting Them To Take Action

BeyongNPS_WebsiteTake an active role in inviting your Promoters to help you increase leads, generate more revenue and reduce churn through advocate marketing.

This eBook features best practices for identifying and inviting your advocates into an advocate marketing program.

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