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Jan 23

Category: Employers, Marketing & Business Development, Technology

Do you record your business’s Net Promoter Score? If you work in marketing and haven’t at least considered using the Net Promoter Score (NPS) to understand your firm’s performance better, then it is time to catch up.

First mooted a little over a decade by Andy Taylor, then CEO of Enterprise-Rent-A-Car as a simple two-question customer survey that clearly showed the health of his various car rental offices, the NPS score is now almost ubiquitous in big businesses.

The Enterprise concept was further validated by research published in the Harvard Business Review, which determined that the NPS was ‘the one number of you need to grow’. It was also boiled down to just one question:

How likely are you to recommend us to a friend or colleague?

Answers are given on a scale of 0-10, with zero being ‘not at all likely’ and 10 being ‘extremely likely’.

Here’s an example question from the online survey tool GetFeedback:

Customers answering with a 6 or below are considered to be ‘detractors’, those answering with a 7 or 8 are ‘passives’, and those answering 9 or 10 are ‘promoters’. The net promoter score itself is the percentage of respondents who are promoters minus the percentage respondents who are detractors.

Here’s how that looks when you get the results in, again from GetFeedback:

Usually, the question is combined with at least one follow-up question that probes for further information about why the customer gave that score: ‘What’s the most important for your score?’ The NPS, combined with the qualitative feedback, provides invaluable data on customer satisfaction.

So, what does this have to do with marketing?

If you’re a marketer and this all sounds like something your customer support team can do that you don’t need to worry about, wake up and smell the coffee!

Marketers are fast waking up to the importance of a positive customer experience. For instance, The Economist reported last year that 86 percent of CMOs believe that their department will own the complete end-to-end customer experience by 2020.

The old-school thinking that customer experience and growth were in competition — one inevitably having to be conceded in order to achieve the other — is rapidly (thankfully!) disappearing. Satisfied customers come back, and — crucially — provide neutral, third-party, word of mouth validation of your product or service.

The evidence backs this up. Companies with a higher NPS score, 70 or above, have substantially higher retention rates and much lower new customer acquisition costs than those with less impressive results.

However, just measuring the number isn’t enough. To achieve these feats — feats which should hugely excite all marketers — requires acting on the findings.

How can marketing effectively use NPS knowledge?

The best companies in the world use the feedback they obtain via NPS surveys to enhance their customer’s experience, remove pain points, and add features and benefits to their products and services.

Here are three ways some of the hottest companies in the world are doing that right now:

#1. Use it to perfect interactions with new customers

Consistently tracking how likely your customers are to recommend you is step one in building a customer-centric internal culture and driving continuous customer service improvement.

For instance, Slack, makers of the hugely popular workplace instant messaging tool, use NPS as the first step in creating a customer-driven culture that’s committed to constant improvement. They do so by recognising that NPS results are not static — they’re constantly being updated to reflect customer trends, changing preferences, and the competitive landscape.

In a recent interview Bill Macaitis, Slack’s CMO, explained that he’s not fully satisfied when someone signs up for Slack. He isn’t even satisfied when they choose to become a paying customer. He’s only truly satisfied when they’re prepared to recommend Slack to a friend or colleague. ‘That’ he says, ‘is a much higher bar’.

#2. Use it to retain customers and to keep them coming back

Of course, the great thing about an NPS survey is that dissatisfied customers are speaking up and drawing attention to themselves. This means that you can target your customer success team’s efforts on addressing these customers concerns and keeping them on board.

Traditionally, when companies send out satisfaction maybe once or twice a year, it isn’t possible to respond to customers in real-time and to address their concerns directly. Short NPS surveys, sent out after every transaction or automated to appear regularly, don’t share this problem, however.

Many companies now routinely reach out to those giving negative responses to address their concerns directly. The social media scheduling tool, Buffer, tasks its customer success team with listening to and attempting to fix or mitigate customers concerns, for example. It’s hard work for sure, but teams that do this report substantially improved retention rates.

#3. Use it as a product development tool

Atlassian, a company that makes corporate intranets and team-working tools, also see NPS as one of their most important metrics. Rather than only focusing on the initial question, however, Atlassian look deeply at the free response explanations people give in the follow-up and use this information to drive product improvement.

In a recent blog post, Atlassian product manager Henk Kleynhans, explained the value in reading and analysing verbatim NPS responses:

‘There’s a ton of value for you and your team in reading and classifying verbatims manually. You will quickly gain an appreciation for what makes your customers happy and what makes them miserable. It might even change the way you think about a particular problem or feature.’