Astute Planning, Flawless Execution,
Tuesday, August 26, 2008
Net Promoter for the Rest of Us
to Implement for Small/Medium Sized Business
Measure and Benchmark
Once your general plan is in place, the first step is typically to get a read on your current customer satisfaction and loyalty levels by conducting a survey to establish some benchmarks. Besides calculating an initial NPS score, another objective is to gather customer feedback on areas and issues which influence customer satisfaction and loyalty. If customers are less than satisfied, they'll generally tell you why! This way you'll have both insights and empirical data about what is driving satisfaction and loyalty, enabling you to set priorities and focus on high impact areas to improve your customers' experience and perceptions.
Educate, Train, Empower
A critical part of your loyalty initiative is to educate and train all employees in what you are doing and why. The success of the effort will ultimately rest with your employees – especially those who interact directly with customers. They need to understand the Net Promoter concept, the benefits to the business, how the program will be implemented, and what's expected of them. Fortunately, one of the advantages of Net Promoter is that conceptually its straight-forward – even simple. Everyone will "get" the idea that all customers fall into one of three categories ("Promoters", "Neutrals", "Detractors"), and it also easy to explain the value of a "promoter" and the negative impact of a "detractor". The NPS metric is also simple to explain and understand. In short, the Net Promoter approach is easy to grasp, but does need to be explained in a thoughtful and thorough manner, and reinforced with continuous communication.
Training customer facing-employees on their role in improving customer loyalty is usually situation specific. In other words, the question of what to do to improve NPS scores depends on the specific drivers of satisfaction and loyalty in your business. No one size fits all. The drivers of satisfaction and loyalty in a bank will be different from those in a small manufacturer or software firm. If you're not certain what the drivers are in your business, the initial survey you conduct will provide some answers.. Often, your front line customer service employees will have an instinctive feel for what makes a highly satisfied and loyal customer and they only need to be empowered to "do what it takes."
One sure way to improve loyalty (and loyalty scores) is to focus on known "detractors" and convert them to "promoters". Given the negative value of detractors, this is the low hanging fruit in a loyalty program. To do this, you need to measure loyalty in a way that allows you to easily follow up with customers and close the feedback loop. Enterprise Car Rental – a leading proponent of Net Promoter and the leading car rental firm - uses telephone surveys to collect customer loyalty feedback. This allows them to follow up with dissatisfied customers and correct the situation. They have high NPS scores! This can also be accomplished using certain online survey tools (like QuestBack) which have built-in capabilities for following up with survey respondents. The point is that quick follow-up and dialog with a "detractor" will often convert them to a loyal "promoter."
Align the business
The companies that have the most success with the Net Promoter approach align their business processes with the loyalty program. What does this mean? First, they make the reporting and communication of new NPS scores a formal, regular and open process – scores are transparently shared with everyone and collectively anticipated. Management makes it clear that they are watching the scores closely and successes are celebrated with employees. Second, incentives are created to reward employees for reaching certain Net Promoter objectives. There are different ways of introducing NPS-based incentive compensation into the program, but the important thing is to connect measured improvements in NPS results to this positive reinforcement. Nothing motivates employee behavior like incentives based on clear and objective measurements. Some companies measure and reward NPS performance at the branch level, generating a sort of NPS competition between branches. Others link promotion opportunities to achieving above average NPS scores. Either way, they align some aspect of compensation or recognition to success in improving customer loyalty as reflected in NPS scores.
Measure Again – at Regular Intervals
Remember, a Net Promoter loyalty program is an ongoing process, not an event or short term initiative. Like a student going through school and striving for good grades, an important part of the process is a periodic report card. A given NPS score is just the "grade" for one point in time. A low grade can be improved with the right actions, and the improvement will show up in future marking periods. The grades, or NPS scores, are generated through periodic surveys of the customer base. Many firms find that measuring the score twice a year – or roughly every six months – provides a good tracking mechanism without overburdening customers with surveys. But this isn't a hard and fast rule. Other firms survey parts of the customer base (like recent customers) more frequently and use this as their tracking metric. The important thing is that the NPS score is measured periodically and carefully monitored to help judge the success of loyalty program efforts and make course corrections. Employees understand this process, and if they are properly trained and empowered to do what it takes to delight customers, NPS scores will go up – and your growth rate and profits too!
Fred Reichheld's Net Promoter approach to managing a business for customer loyalty is a powerful framework for aligning a business to produce satisfied and loyal customers – and to generate above average growth and profits. And Net Promoter isn't just accessible to large corporations engaging expensive consulting firms. The Net Promoter concept and method has been published and is readily accessible to small and medium sized businesses. With leadership, commitment and a process as outlined in this article, you too can successfully implement a Net Promoter loyalty initiative in your business. Net Promoter is not a short term project or something that stops after a period of time. Firms that have successfully adopted Net Promoter make managing for loyalty an ongoing management priority, and they gradually see themselves rise to ranks of peer-group leaders in terms of growth rates and profitability.
About QuestBack: QuestBack (www.questback.com) is an enterprise feedback management tool for gathering and analyzing feeback from critical constituencies via online suveys. With unique ASK&ACT TM follow-up capabilities, QuestBack transforms the data gathering process into a dialog that enhances customer relationships..The company is based in Europe and represented in the US by QuestBack Boston LLC.
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