Net Promoter Score® (NPS), first described by Fred Reicheld, Bain & Company in 2003 in their HBRE article “One Number you need to Grow”, has become an important customer metric and is used extensively across most industry sectors. It is a customer loyalty metric, and rather than focus on any particular product or service it focusses upon the experience provided by that company.

Net Promoter Score®

At EpiCentrum our background is in Creating a Customer Experience Culture. We use NPS as a strategic marker that not only provides your Voice of Customer and gives you valuable information as to how your loyal your customers are, but more importantly we analyse this in terms of how it can be immediately used to develop strategies going forward so as to grow the loyalty and hence improve the ROI. “At the end of the day, no matter what business you are in: product, service, profit or non-profit, at the core of everything a company does there is a customer. The more you understand that customer and how you can add value to their world, the better the customer engagement and hence the better the company profit.

How NPS is calculated

Customers are asked one ultimate question, “How likely is it that you would recommend this company to a friend?” Based on their response to this question customers are then divided into three groups.

  • 0-6 are Detractors These are customers that are dissatisfied and given an opportunity will stop buying your products and supporting the company. They may generate negative word of mouth and also may discourage others from using your company.
  • 7-8 are Passives Whilst these customers are generally positive about the company they are unenthusiastic and do run the risk of defecting to the competition.
  • 9-10 are Promoters These customers drive business growth. The company has gone beyond satisfying their needs and truly delights them. These are loyal enthusiasts who will keep buying from you and will generate a positive word of mouth.

The Net Promoter Score® is created by calculating what percentage of a company’s customer base are Promoters and then subtracting the percentage who are Detractors. The customers who are Passives are neutral and are excluded from the equation. %Promoters -%Detractors = NPS.

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NPS – It is more than just a number… you need to dig deep

Improving the NPS and hence the customer experience.

Someone once said “You don’t lose weight simply by weighing yourself everyday”. And so it goes with any customer experience metric. Whilst the number is important in terms of benchmarking and is used as a strong metric for customer loyalty, the key is to use the information to improve the customer experience. EpiCentrum have a strong practice of drilling deep and getting to the root cause of the issue. It is important to understand why people really like you, what they think you can do better and perhaps some areas where you may not have reached a good outcome.

The goal of any customer research is to provide a clear direction of what needs to occur next.

  • Based upon the Promoter data…What do you keep doing?
  • By examining what the Passives say we know… What do you start doing? and
  • The Detractors will let you know….. What do you stop doing?

Want to double your company’s growth rate?

A 12 point increase in NPS leads to a doubling in a company’s growth rate.

Net Promoter Score® Driven Key Account Sales Strategies

  • A great Key Account Sales strategy must be based upon accurate and relevant customer information. In order to understand the account dynamics we must map each account as to who are the decision makers, the influencers, and the gatekeepers and users (hopefully the CRM already has this information, if not speak to EpiCentrum). Based upon this information the strategy must then understand what is important to each of these customer types and how your company’s products perform in relationship to what each customer type values. Net Promoter Score® can provide this valuable information. For example, by knowing that the decision makers in the account are Detractors (with the reason why) and perhaps knowing that the Users and Influencers are Promoters (and the reason why). This data is extremely valuable as it gives a clear direction as to what areas need to be addressed, and how to use positive information as leverage in order to gain maximum effectiveness by mobilising the Promoters. For more information please read our white paper.

Let EpiCentrum show you how you can create strategies based upon the customer data and maximise your key Account Strategies to win more major bids. EpiCentrum will enable the use of the CRM data and have Net Promoter Score® provide the information you need to set the most effective path.

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Mobilising Promoters through Appreciative Inquiry

The aim of every organisation is to create Promoters as these are the loyal customer that will more than likely continue to purchase from your organisation. What many organisation fail to do is to capitalise on these positive customers. NPS is not only about addressing your Detractors (vital as this is), but it is also about understanding what it is about your organisation delights your customers and perhaps how can you do more across the entire organisation utilising these positive behaviours.

Appreciative Inquiry was developed by David Cooperrider and Diana Whitney. Appreciative Inquiry (AI) is a change management approach that focuses on identifying what is working well, analysing why it is working well and then doing more of it. The basic tenet of AI is that an organization will grow in whichever direction that people in the organisation focus their attention. How do we know what is the positive in the organisation, quite simply our Promoters tell us. EpiCentrum has an adaptation of the A1 model that incorporates NPS.

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Which Australian Companies have the best NPS?

Many of Australia’s leading companies have adopted Net Promoter Score® as an important performance metric. It provides a simple, comparable measure of customer satisfaction and is a key indicator of future business growth.  The goal is NOT to have a high NPS – by itself it is not a sufficient condition for growth; it is only a measure of the quality of a company’s relationships with its customers. NPS is a useful tool for making decisions, innovating and doing what is necessary for growth.

Net Promoter Score® Australia 2006

Reference Books:

  • The Ultimate Question – Fred Reichheld – Read a description here – the book is available on Amazon
  • Would You Recommend Us? That simple query to customers is shaking up planning and executive pay – Business Week – read online
  • The NPS Theory in Practice – Read
  • More Information on NPS Fast Start…

Want to know more?

Contact us and we will forward you more details of our consultancy services. Please call EpiCentrum on (03) 9602 3500.

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