Ever since I’ve first learned to work with it in 2007, I had a thing for NPS. There are many who tell me it isn’t the most scientific of measures, but in our 80/20 world it is still the most effective and actionable customer system I’ve ever seen.
Now many companies define NPS as a customer experience improvement programme. Their rhetoric focuses on “root cause analysis” and on “closing the loop”. And rightfully so. Listening to the customer’s voice and acting on the knowledge you gain this way, are at the heart of every company’s success.
But there can be more to NPS than meets the eye. So I wanted to give a short summary of the “other” ways in which a well-implemented Net Promoter programme can add value to your business. So if you happen to be wondering about the “next level” for your NPS programme, you might find some inspiration in the list below.
#1 Build a competitive advantage: A well-structured NPS benchmark study can compare your company’s performance to that of your competitors but also uncover the reasons why each company gets lower or higher scores. By carefully analysing where your competitors create detractors, you can identify the areas where your business can capture market share.
#2 Conquer new customers: Closely related to the above is actual customer conquest. If your NPS data is granular enough, you can start targeting specific segments or even account with tailored offers to make customers switch to your business. Considering Accenture just found that about two out of three consumers are open to this, the right offer can take you a long way.
#3 Reduce your cost structure: NPS programmes typically focus on “doing more” for the customer. But identifying the parts in your service offer to which your customer is truly indifferent can also be a source of profit. After all, industry habits and internal priorities may cause you to keep alive practices which make no more competitive sense. These are places where you can cut costs without your customers losing sleep over it.
#4 Increase your marketing ROI: Marketers know that a large part of their budget is wasted, but they often find it difficult to indicate which part it is. By creating differentiated communication and action plans for promoters, passives and detractors, you can get the most profitable response out of each audience and work on the overall improvement of your score. Not to mention that actually knowing what delights your promoters, is a good way to focus for your next campaigns.
#5 Increase your closing rate: Almost every business creates promoters. Activate them. Set up a promoter programme in which you actually ask them to recommend your business. Their intervention can get you new prospects to approach and help you close more business (after all, a video of a happy customer is 100x more convincing that that of your most passionate sales person).
#6 Improve you account planning: Too much B2B focus goes to the customer’s purchasing department. By mapping the NPS of various decision makers, influencers and users you can empower your sales teams to develop action plans which affect every stakeholder on your customer side. These action plans can form the basis of NPS-driven account planning, communication and service/innovation programmes.
#7 Sharpen your financial forecasts: If your finance team enriches their forecast data with NPS information by customer, segment and/or account, they can substantially increase the quality of these forecasts. After all, the chance of the detractors to actively increase their orders in the next year are probably well below those of the promoters doing so.
#8 Make better M&A decisions: Most due diligence processes look at (historic) company information and “average “customer data. By conducing a quality Net Promoter study on the customer base of the companies you intend to acquire you can much better determine their value and avoid merging a large group of detractors into your customer base.
#9 Optimise organisational learning: Most organisations want to “leverage best practices”, but when doing so they typically define these practices based on internal efficiency or abstract KPI’s. Using NPS data as a guideline for determining “best” practice in your business, allows you to focus on those employee and organizational habits that truly make a difference.
#10 Streamline your information systems: Promoters only emerge when various touchpoint owners have the information they need to really connect to their customers (and are empowered to do so). By closely involving your IT teams in your NPS efforts, you can develop a “single customer view” architecture which is really designed around your customers instead of any vendor’s perspective on the world.
What do you think? Did this cover it all? Or did I forget to mention other ways in which NPS can help you drive your business. I’d love to hear your views.
NOTE:
Futurelab have joined forces with Bing Research to bring Fred Reichheld to the Benelux on May 10th. Yours truly has been chosen to act as “warm-up” act
We hope see you there! info: http://www.bing-research.com/FredReichheld
Net Promoter® is a registered trademark of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.
