When Net Promoter Works. When it Doesn’t.

As a Zappos Insights VIP Panel participant and host, I recently hosted the Webinar, “The Value of Net Promoter Score” with author Fred Reichheld (a colleague in the discipline of Customer Loyalty and the co-creator of the NPS methodology), along with Satmetrix.

Here are five highlights from our discussion. To implement Net Promoter strategy correctly, Fred Reichheld says you must:

1.    Recognize the Importance of NPS.  (“The senior executive team must see as mission critical.”)

It’s mission critical because being dedicated to Net Promoter Score means caring about your customers and how they see you—and that must be embedded in your company values and culture for this to work. Fred said that “Net Promoter is a litmus test that means you have you lived up the golden rule and made your customers lives better.”

2. Establish a Clear Measurement Process.  (“Systematically categorize the promoters and detractors with a measurement process that is understandable and reliable.”)

You need to track and categorize successes and failures. Successes and failures have to be identified.

3. Respond to Data. (“Have a closed loop system.”)

This means—close the loop—connect with your detractors. Solve the problem. And hold Promoters close. Involve them with your business. You need a system for activity of engagement or response with the customer and internally. “Don’t let the data just sit.”

If there is a breakdown in the system, and these 3 elements aren’t addressed, then NPS strategy won’t be meaningful, effective or gain traction in driving business decisions. For example, if the executives of a company make bad choices that hinder the employees as they try to create promoters—the NPS scores will reflect that and it shows a lack of internal commitment to NPS.

4. Find the Right Rating Scale.

I asked Fred about the 0-10 scale because I have many clients transitioning over to NPS, and this is always a big conversation—and a bit tricky. Reichheld discussed the rating scale that’s best suited to the Net Promoter question. He said using a 0-10 scale (vs. a different rating scale) is ideal. This system is the easiest to use, the best way to measure and interpret data, and finally, to compare the results. (Just to give you an idea about successful measurement and successful business practices…Zappos is getting 80s and 90s in their Net Promoter Score system, which Reichheld says are scores “in the stratosphere.”) In my practice with clients, it’s also critical in terms of clustering customers into Promoters or Detractors. In a 0-10 point scale, there is a distinct difference and there must be a very deliberate intent to give a company a “Promoter” score (a 9-10) versus a 1,2,3,4. When the scale is lower, such as a 1-5 scale the perceived difference is more difficult for customers to discern and it’s harder to discern inside the company—those Detractors who need immediate closed-loop contact and those Promoters who should be connected with to keep their passionate connection with your company.

5. The Best NPS Practitioners Collect the Measurement in Two Ways.

1. Measure NPS around transactions that are most vital (transactional NPS).

Measure at one touchpoint for an operationally relevant measurement that offers feedback on performance at that key moment of truth.

2. Execute a top-down NPS.

Set up an anonymous survey and contact existing customers to ask the NPS question—rating the overall customer/company relationship. At the same time, ask questions about the scores they would give to your competitors. This will give you a view from the highest level. Are you growing an army of fans? The results will also let you compare scores with your competitors.

Take Action: Learn more about Net Promoting strategy, read Reichheld’s book, The Ultimate Question.

To learn more about operationalizing it in your business, contact me at Jeanne@customerbliss.com. And visit Zappos Insight website to learn more about that valuable program. I’m also proud to say that I am a regular contributor to the Net Promoter site and their blog.