How to be one of the 10% that have Net Promoter successby
Did your company check the Net Promoter box last year? Many did, which isn’t surprising; Net Promoter, and the Net Promoter Score (NPS) has become the de facto standard for measuring and transforming the customer experience. Did you have to fight to bring a Net Promoter program on board at your company? Did you have to make a case for it internally? My guess is that many of you who checked the box this past year will answer that question with a “no.”
You might think that, as the CEO of the company that co-created Net Promoter, I would be happy that it’s getting easier to convince company leaders to launch programs, but it’s a mixed blessing in my opinion. It used to take real leadership (and no small amount of courage) to promote the idea of Net Promoter, so those early adopters did some careful, detailed thinking about the discipline. They had to win a few battles. Today, speed of adoption often comes at the expense of the quality of thinking companies have to do.
The problem is that Net Promoter is more than a box you check. Success with Net Promoter can improve the bottom line, but our data tells us that only 10% of companies that take it on do so successfully.
The good news is that succeeding with Net Promoter isn’t magic. What are those 10 percent doing? What characterises the winners, the customer experience champions? Looking back at 2013, I see five key success factors. Learn from the 10 percent.
Get the basics right
It can be hard to get excited about the basics. But champions are executing well because they’re doing the basics really well. For instance, the champions know how to:
- Segment their customers.
- Get the right data at the right touchpoint from the right people at the right time.
- Drive through to the root cause.
- Get executives to look at the big picture analytics.
- Engage employees in closing the loop.
If you’re doing NPS, are you doing those things well?
I was recently talking to an executive whose company publicises its Net Promoter scores to Wall Street but still gets the basics wrong – segmentation, survey design, and follow through – so that their score is nothing more than a limited research exercise. Then they say, “We’re doing Net Promoter,” but have only succeeded in hostaging themselves to an indefensible score.
Too many companies are neglecting the basics. Don’t fall into that trap. Take a cue from companies that get it right:
- Experian, the global information services company, has been using the Net Promoter discipline as a way of doing business for 10 years. Although Experian uses Net Promoter globally, its Credit Services and Decision Analytics group has had the best showing, with a 66.3% increase in its NPS since the program began, and 15% revenue growth since 2010.
- Aggreko, the leading supplier of temporary power and temperature control solution, takes the number one spot in our global B2B benchmarking. Aggreko’s NPS is over 60, three times the global B2B average of 20. The company keeps executives focused by reporting NPS alongside financial metrics.
One of 2013’s surprise elements has been the incredible power of getting customers to advocate for you, especially on social media, a tactic that has proved much more successful for companies than they anticipated. Your promoters can become powerful stories for you.
- Housemaster Home Inspections, a North American home- and building-inspection franchise system, saw an 11-fold increase in Facebook likes and a 40-fold increase in engagement in a six-month period. Over the same period, Housemaster identified 12,300+ Promoters and prompted more than 650 of them to share their experiences. Even more telling, total revenue was up 15% a year after the program began, and franchisees mobilising promoters doubled their business as compared to counterparts using traditional marketing only.
Make bold moves
Customer experience champions were also willing to make bold, economic tradeoffs or investments in 2013 to create a serious inflection around the way their companies think about customers. For instance, major telecom companies have been willing to put money behind their understanding that the ability to differentiate on customer experience creates promoters. These guys have a clear economic model that understands the higher value of promoters when compared to detractors.
- Elion, the largest telecommunications and IT services provider in Estonia, has made many business decisions and operational improvements based on loyalty, and seen revenue follow. For example, based on customer feedback Elion unbundled its services and enabled customer self service on service changes, defying industry wisdom. They’re outgrowing the competition by 50% - besting 40% market share only seven years after entering the market - and seeing big increases in their NPS over many categories.
Differentiate on service
Pricing has ceased to be a competitive weapon. Companies know that they have to be in price position. I’m seeing service coming back as a huge differentiator because there’s nothing left in the toolkit; champions make service innovation investments to propel themselves in the market.
- At tw telecom, a leading North American provider of managed data, internet, and voice networking solutions, any employee can register customer complaints, as well as comments about unrelated areas of the business. The company’s Net Promoter work resulted in a 70% NPS improvement, and an astounding 32 consecutive quarters of revenue growth and year-over-year revenue growth of more than 7%.
- KPN, the Dutch telecom, increased its NPS significantly by fixing some basic issues, and has introduced new ways to provide great service. The company uses an iPhone app that lets employees register and properly route problems right away, whether they hear a complaint while at a cocktail party or while in the field, and then track the status from there.
People became much more interested in employee engagement in 2013 than they had been in the past. There’s an acute sense that winning with Net Promoter is first a battle for the hearts and minds of employees.
- Dell, has done some of the best work in this area. Employees rate products, and the company uses the Employee Net Promoter Score (eNPS) to understand the levers of employee loyalty. Dell has discovered that its eNPS closely links with customer NPS, providing a powerful tool for improving employee loyalty that increases customer loyalty, and eventually growth.
- Safelite, the leading US provider of vehicle glass repair and replacement, connected the dots between soft skills and technical skills, and provided employees with training and recognition in delivering superior customer experience. After the first year of employee-focused NPS programs, revenue increased by $74M. After the second year, revenue was up by another $109M.
NPS Is only a tool
Think about Net Promoter this way; imagine that you’re interviewing Jimmy Carter about Habitat for Humanity but asking him only about his choice of screwdriver. The point of Habitat for Humanity is to build houses -- the correct choice of tools is an enabler for success but no guarantee. In 2013, this focus on the end game is what separated the champions from the average companies. The average companies buy a great bunch of tools but don’t build any houses.
Kronos, the workforce management company, has increased its NPS an average of 10 points year after year. They’re capable of meeting the data requirements of a complex business, and educating management about how to use that data. But the real key is that the CEO is an advocate of the end game - creating customer success - not just of Net Promoter. He uses the discipline as a tool that helps the company to make customer-centric choices that grow the business.
Don’t use Net Promoter to check a box – do it right, and use it to grow your company and revenue.
Richard Owen is CEO of Satmetrix.