Check out why this Bain fellow said the Net Promoter System is not simply about the SCORE!
The Net Promoter Score (NPS)! Keep reading to learn what Reichheld says about using this tool to enhance your brand and grow your client and customer base.
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Check out why this Bain fellow said the Net Promoter System is not simply about the SCORE! Fred Reichheld: Creator of The Net Promoter System (NPS) In his LinkedIn article published on November 1, 2019, Bain fellow Fred Reichheld said, “Too many companies confuse the goal of enriching customer lives with the tool to help achieve it, the Net Promoter Score. They further confound their employees by tying bonuses to NPS, converting the tool into the objective for frontline brand ambassadors.” So, where do some companies go wrong in using the NPS? For Reichheld, it’s in this aspect: A few companies think the goal of the Net Promoter System is to increase their Net Promoter Score. [Net Promoter Score: A single survey question asking respondents to rate the likelihood that they would recommend a company, product, or a service to a friend or colleague.] … but it’s not. The main goal of the NPS is to increase the number of customer lives businesses enrich on a sustainable basis. Besides, even without the NPS, the ultimate purpose of any great organization is to improve people’s lives. According to Reichheld, while a short survey provides instant feedback that can be a reliable indicator of success or failure, that doesn’t necessarily mean that a customer’s answer to a survey guarantees that he or she has been correctly characterized overall as a success or failure for a company. Reichheld believes that in today’s “overly surveyed world,” it’s important that companies and independent professionals like you know how to cut back on survey requests and instead use other data sources to a customer’s promoter, passive, or detractor status. [Promoter Status: Those who award a 9 or 10 out of 10 when asked how likely they are to recommend a company. Passive Status: Those who give a 7 or 8 out of 10 in a single short survey. Detractor Status: Those who give a 6 or below in a single short survey.] One part of that solution? Tracking operational data, such as the number of times a customer calls a company’s service center! For example: A bank that declined someone’s credit card 3 times this week at the point of sale should know that the customer is frustrated―even angry. In such instances, you don’t need a survey to figure that out. Reichheld says that observing operational data and actual customer behavior makes it possible to BETTER estimate true promoter, passive, or detractor status. That’s what he calls the “Signal NPS.” This can reduce the need for “Survey NPS” as it apparently highlights happy or unhappy customers. However, getting to the “why” behind customer behavior requires a nuanced approach undertaken over time. This approach involves observation and engaging in direct dialogue with the customer. Here’s Reichheld’s bottom line about why he says that NPS is not just about the score: “As companies deepen their understanding of the customer, the overarching goal must remain the same: to determine if they have enriched or diminished the customer’s life, and to take action based on that insight. Survey NPS, augmented and integrated with Signal NPS, is the right approach. But no matter how good a number these refinements produce, don’t fall into the trap of treating the score as the objective. It’s not about the score!” Hope you’ve found this week’s insights interesting and helpful. Follow us on LinkedIn. Stay tuned for next Monday’s MicroBusiness Marvels! Learn more about Reichheld’s Loyalty Management Strategy and Value Creation on next week’s MicroBusiness and Marketing Marvels! |
