Making NPS (Net Promoter Score) A Part of Your Company Culture
December 16, 2019
Companies that put customer loyalty first — like Allianz, American Express, and Charles Schwab — generally thrive. They know the value of brand advocacy. They know how to close the loop with dissatisfied customers. They know how to create a powerful customer experience that delights, and replicate it time and again. What else do many of these companies have in common? NPS (Net Promoter Score) is a core part of their company culture.
In theory, every person at your company knows that a loyal customer is a high-value customer. They know that loyal customers stick with your brand longer, buy more, and carry the lowest cost of acquisition. But unfortunately, measuring, tracking, and encouraging customer loyalty with Net Promoter Score, or NPS, isn’t always prioritized in company culture.
Instead, high-level executives and middle management want to hit financial benchmarks. And they may not perceive focusing on customer loyalty to be the fastest, most efficient way to get there, particularly if it means measuring NPS as part of the process.
What some C-suite executives and middle management may fail to see is that leading with NPS can actually help them to accomplish their goals. When your company culture emphasizes Net Promoter Score, it generates what business strategist Fred Reichheld calls “good profits”: profits earned from loyal, enthusiastic customers. Ultimately, these are the kind of profits that create the backbone of a strong, successful company with reliable customer bases, an excellent reputation, and steadily increasing revenue growth.
Blog readers get %5 off paid plans for life with code: blog
Spearheading an NPS Movement
To successfully implement Net Promoter Score and establish its role in the core values of your company culture, you need an NPS leader.
A leader who spearheads an NPS movement will ensure that your Net Promoter Score is continually gathered, tracked, and assessed with NPS software. They will make sure that relevant insights are delivered to the right departments. And perhaps most importantly, they will make sure that the “loop is closed” on NPS, with every effort made to follow-through on actionable insights and dissatisfied customers.
Your company’s NPS leader may be you, or someone else in your department. You may even want to create a special position to track, assess, utilize, and advocate for NPS. In any case, you need someone to commit to making this metric a centerpiece of decision-making and a source of invaluable insight for your company.
Making the Case for NPS
Getting everyone on board with NPS requires you to make a strong case for this metric. Of course, you’ll need to get buy-in from C-suite executives. But you’ll also want to persuade middle management that NPS can become inestimably valuable to the company — if given a chance.
Here are the basic reasons that NPS is worth valuing in company culture:
It’s a uniquely comprehensive metric.
CSAT and CES can be valuable for tracking customer satisfaction, but they don’t capture the same kind of comprehensive insight produced by NPS. CSAT, for example, may measure a customer’s level of overall satisfaction with your product or service. But a satisfied customer doesn’t always indicate a customer who is deeply loyal to your brand or company. A satisfied customer doesn’t regret her purchase or subscription, but she may nonetheless be shopping around for something better.
Net Promoter Score, on the other hand, measures a customer’s likelihood of referring your product or service to others. It directly asks, On a scale of 1-10, how likely are you to recommend to a friend, family member, or coworker?
A customer who gives you a “9” or “10” is very likely or extremely likely to recommend your product or service. In other words, she’s a “promoter.”
More than being simply satisfied, a customer who will recommend you to others is thrilled with your product or service. Promoters are likely to buy more, stick with you longer, and make more profit-producing referrals. And ultimately, NPS is the only metric that can measure this valuable level of brand advocacy in a quantifiable way.
It’s a powerful indicator of future growth.
Your Net Promoter Score can help you anticipate future growth by giving you powerful insight into not just churn, but also the likelihood of organic growth through referral marketing.
As we discussed above, a satisfied customer may be temporarily happy with your product or service… but she might be just one negative experience away from churn. Extremely loyal customers, or promoters, tend to be more resilient. A high number of promoters indicate that you can safely rely on a significant portion of your customer base to stick around.
A high NPS can also indicate future growth by forecasting an uptick in customer referrals. If you work in an industry where referrals are especially powerful — such as healthcare or the food/restaurant industry — you can bet that as promoters spread the good word, you’ll see a significant increase in revenue.
NPS promoters will drive up revenue.
Lastly, making NPS a core part of your company culture will ultimately help you focus on generating more promoters. Promoters are the customers described above — the enthusiastic brand evangelists who are ready to tell their friends, neighbors, coworkers, and the grocery store clerk about your product or service. Promoters are, simply put, money.
One study* conducted by Bain & Company found that for retail banks in North America, promoters gave their primary bank 45% more of their household deposit balances than detractors did. Promoters also buy 25% more financial products, choose more expensive services, and finally, make 7X more referrals than detractors.
By focusing on boosting your Net Promoter Score and following up with detractors to “close the loop,” you’ll be able to convert more of your customer base into enthusiastic, high-value promoters. But ultimately, the only way to do this intentionally and effectively is to make NPS a core part of your company culture.
Integrating NPS Into Company Processes
Collecting, assessing, and acting on NPS can’t be an isolated process or practice. To really produce impact, your Net Promoter Score must be integrated into multiple company processes, across all departments.
Some companies that rely heavily on customer support staff deliver NPS results right to the employees who interacted with the relevant survey takers. For example, if a customer reports a negative experience with customer support, that feedback will be shown directly to the involved support staff member — the aim is to troubleshoot applicable issues and help the staff member deal with the situation more effectively in the future.
But Net Promoter Score applies to more than just external-facing departments. Accounting and finance departments aren’t customer-facing, and they care about hard numbers more than anything else. To keep them involved in your Net Promoter Score, integrate accountability. At Allianz, Charles Schwab, and TD Bank, customer-facing departments are regularly asked to rate internal departments on how they are supporting efforts at generating customer loyalty.
Finally, encourage C-suite executives to discuss your Net Promoter Score publicly. NPS should be incorporated into all reviews and meetings.
TurboTax saw enormous success by making NPS a core focus — seeing its retail market share jump from 70% to 79% over a two-year period. Former CEO Steve Bennett said, “Every business line [now] addresses this as part of their strategic plan; it’s a component of every operating budget; it’s part of every executive’s bonus. We talk about progress on Net Promoter at every monthly operating review.”*
Driving Your Net Promoter Score Forward with NPS Software
Using NPS software will be essential if you want to drive a Net Promoter Score movement in your company. NPS software makes it simple and efficient to continually track this metric; store, filter, and assess data; and deliver valuable reporting across the company.
Thermostat can kickstart your NPS mission by helping you implement NPS surveys, collect valuable feedback, and produce actionable insights to improve customer loyalty — and increase revenue. Try the free version of Thermostat here.
*Reichheld, Fred. The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World.
Blog readers get %5 off paid plans for life with code: blog
Our best articles, right to your inbox