What is NPS? Do you want to be a Net Promoter?
Net Promoter Score is based on the fundamental perspective that an organization’s members and customers can be grouped into three categories: promoters, passives and detractors.
Sentiment/data is gathered by asking one simple question:
How likely are you to recommend my organization to a friend or colleague?
This is asked in the immediate when an education session ends, at the end of a seminar or meeting, when a service or interaction has completed. It is real time and active.
- Members/customers respond on a 0-to-10 point rating scale and are categorized as follows:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying membership and products and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic members/customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy members/customers who can damage your brand and impede growth through negative word-of-mouth.
To calculate NPS, take the percentage of members/customers who are Promoters and subtract the percentage who are Detractors.
That is how you get your score. The score can be used to represent how the entire organization is doing. You have an opportunity to share that score across your entire organization. Perhaps it might catalyze the staff to seek ways to improve that score.
What are the main goals and objectives of Net Promoter:
- Assess Member/customer Satisfaction, Retention, and Engagement in real time
- Recover Detractors
- Mobilize Promoters
- Drive Accountability
- Uncover Insights
Who are Promoters, Passives and Detractors?
Promoters (9 or 10)
- Promoters are loyal, enthusiastic fans.
- They sing the company’s praises to friends and colleagues.
- They are far more likely than others to remain members or customers and to increase their purchases over time.
- Moreover, they account for more than 80 percent of referrals in most businesses.
- They are, in general, pleasant for employees to deal with.
Passives (7 or 8)
- We call this group “passively satisfied” because this group is satisfied—for now.
- Their repurchase and referral rates are as much as 50 percent lower than those of promoters.
- Their referrals are likely to be qualified and less enthusiastic.
- Most telling: if a competitor’s ad catches their eye, they may defect.
Detractors (0 to 6)
- Detractors are unhappy members or customers.
- They account for more than 80 percent of negative word-of-mouth.
- They have high rates of churn and defection.
- Some may appear profitable from an accounting standpoint, but their criticisms and bad attitudes diminish a company’s reputation, discourage new members/customers and demotivate employees.
Are Your Members and Customers: Promoters, Detractors, or Passives? Based on their responses here is how you can learn even more:
➢ Action Step: Send out or provide in person one question to members and customers, “How likely are you to recommend my Organization to a friend of colleague?”
➢ Action Step: Pose diagnostic questions based on their response:
➢ Ask the Detractors, “What’s one thing we can do to improve?”
➢ Ask Promoters, “What do you like most?”
➢ Ask the Passives, “What could we do better?”
The results will provide genuine voice-of-the-customer feedback.
And reveal items that have the biggest impact on score in the categories.
Here are some activities and actions:
- Reach out, rescue and close the loop with at risk members and customers
- Identify those that are at risk of deflecting in time and pull them back into the fold
- Facilitate increased word of mouth from member and customer fans
- Identify the innovations members and customers value most
- Identify the trends behind the numbers – verbatim analysis of open-ended comments
Loyal clients can bring in 80-90% of positive referrals.
Here are some other action oriented ideas and opportunities to use the findings and looking at things differently:
- Measure and ensure you have good member and customer engagement
- Engage existing members and customers as sustainable engines for growth
- Identify most loyal members and customers and single them out for referrals, up-sells, and continued renewals
- Create brand advocates and activate promoters
Promoters are your friends, you are keeping them happy and they are satisfied with the organization and the services and value they receive. Status quo is important here. In concepting new ideas, services or directions, think in terms of what is making this group happy. You do NOT want to lose them. Passives are on the fence, they aren’t damaging you, your organization or your brand, you may consider maintaining what seemingly makes them satisfied. The Detractors is where you really need to spend your time but don’t focus on all of them. The detractors as I have said several times are possibly damaging your brand, they may be offering negative word of mouth to those the interact with. You must find out what areas to improve to change their minds and perceptions.
Recognize that those on the bottom of the scale may already be lost. It might take a tremendous amount of time and effort to bring them back into the fold. You want to spend your time first on those in the 5/6 range. They afford you the best opportunity to convert into either passives or promoters.
Set your sights realistically. You may have limited time, resources and offerings to convert. Spend your time wisely.
❖ Prioritize and take advantage of the 80/20 Rule
❖ Focus on high value: who responded 5’s and 6’s.
❖ Low Value 0’s are difficult to rescue and requires tremendous resources
❖ Set sights realistically
So how do you convert all of this input into action within the organization?
In addition to strategies to interact directly with promoters, passives and detractors, use the insight gained to look holistically across the organization. Are you hearing high quantities of feedback concerning the member/customer experience? Are you hearing about frustration points either digitally or physically? Are you hearing your meetings or products need to improve?
Take what you here and begin to make tweaks and small changes to the services, experiences or events you are offering. Ensure your thinking stays pro-active. Planning for a large replacement or change is hard and takes time. Time is a luxury that you may not have.
As an example: if you are hearing from many detractors or passives that the online purchase process is difficult, investigate ways to make the process easier. If wait times for phone contact are long, consider adding staff.
You don’t need to be revolutionary. You evolution should, however, involve constant and active listening and continued tweaks and adjustments. Ensure you are measuring the impact of your tweaks and adjustments. Adding to the number of promoters (your satisfied members and customers) will increase your bottom line and ensure positive word of mouth is the norm not the exception.
Other tools and approaches exist if you want to gain even deeper insight into your members and customers. The American Consumer Satisfaction Survey, developed at the University of Michigan is a methodology that defines satisfaction across various areas and then delivers an overall satisfaction rate. ACSI results are similar to NPS. The survey is longer, questions can be customized and the offering can be implemented across physical and digital channels. Like Net Promoter, the results can demonstrate where member and customer pain points exist. Customized questions can be asked along with the standard questions to dive deeper into the experience members and customers are having. The survey is automated and delivered to a sampling of your callers or digital visitors. It does not go to everyone, although you could have it set to do so.
There are organizations that use both. There are advantages and disadvantages to having too much data but sometimes the advantages outweigh the disadvantages.
❖ A Satisfaction Measurement tool across used all Industries
❖ Based on methodology created at U. Michigan
❖ Core and open ended questions
❖ Calculates “Most likely to recommend” and categorical/overall satisfaction rates
❖ 1 statistical sampling per month = (150+ respondents)
❖ Reporting is ad-hoc, monthly and quarterly
Utilizing multi-channel real time sentiment capture and predictive analytics in the measurement and analysis of the customer experience radically changes the way critical investment decisions are made and increases your satisfaction and revenue!!
Again, here are the benefits:
Deepen Relationships and Touch
Decrease cost of serving
And increase customer satisfaction and loyalty.