Implementing NPS the Right Way
Q&A with Rob Markey
Many Qualtrics customers already collect Net Promoter ScoresSM, but we know that’s just a first step in truly focusing a company on loyalty and achieving maximum impact. So, in this second blog post in our three-part series with Bain & Company, we talked with Rob Markey to learn about some best practices for implementing the Net Promoter SystemSM.
Rob Markey is a partner at Bain & Company and leader of the firm’s Global Customer Strategy and Marketing practice. He is coauthor of the best-selling book The Ultimate Question 2.0: How Net Promoter Companies Thrive in a Customer-Driven World (Harvard Business Review Press, 2011).
Q. What are some best practices for implementing NPS® within an organization to maximize its impact?
We could write a book about that—in fact, I guess we have. Behind the powerful simplicity of the basic Net Promoter ScoreSM, there needs to be a system to turn that customer feedback into real action. Building a Net Promoter SystemSM is a big task, but the short story is this: a company needs reliable metrics, a system for closing the loop with customers and the ability to take action to improve the customer’s experience.
Q. Would you describe each one briefly? Begin with “reliable metric.”
Sure. A reliable metric is the starting point. The standard Net Promoter® request for feedback is “How likely would you be to recommend this company or product to a friend or colleague?” Answers are scored on a zero-to-ten scale, with 9s and 10s counting as promoters and 0 through 6 counting as detractors. The Net Promoter Score is just the percentage of promoters minus the percentage of detractors.
But you have to test this question to make sure that the answers are valid indicators of behavior in your particular business. You also have to develop methodologies that ensure high response rates from valid samples of customers; otherwise you run the risk of ignoring a large segment of customers—the nonresponders—who may have different views from those who respond. Finally, you must be consistent in your methodology, using the same wording and the same feedback systems, so that you can see accurate results over time. An unreliable metric makes it impossible to gauge whether the actions you are taking are really improving the customer experience.
Q. And what do you mean by “closing the loop”?
Customers have different expectations than they used to. If they give feedback, they expect it to be taken seriously. They want to hear back from the company, and they would like their feedback to be acted on. There’s nothing so demoralizing as the feeling that your response is disappearing into a black hole.
That’s why more and more companies are trying to bring the voice of the customer right into their organization, so that they can better understand customers and respond to their needs. Net Promoter companies in particular make a point of getting in touch with every dissatisfied customer—closing the loop. They apologize for the bad experience. They empathize. They learn more. Sometimes they offer recompense—a discount on the next purchase, for example. And they tell the customer what they are doing or have done to address the issue.
Q. Which brings us to “taking action.”
Exactly. The whole point of gathering Net Promoter feedback is so you can make changes that improve the customer experience and thus build loyalty. You want to do this as fast as possible, not six months from now. That’s why we call Net Promoter feedback “high-velocity.” Companies that are loyalty leaders channel customers’ concerns immediately to frontline employees and supervisors, who are empowered to do what they can to make things better. We call it a self-directing, self-correcting workforce.
If the issues raised by customers are systematic and must be addressed at a higher level or with other functions, they are channeled to the appropriate team. The team can then decide which investments to make in improving the customer experience. Even then, the whole thing works quickly, because everyone is dealing with continuous, real-time data.
Q. Are there different types of Net Promoter scores? What are they?
Most practitioners ask for feedback in three different ways. One, they contact a sample of customers who have had a specific experience with the company (often made up of one or more touchpoints or transactions), such as completing a purchase online, turning in your rental car or filing a claim. This helps them assess the impact that particular experience had on the customer’s relationship with the company. Two, they contact a sample of their entire customer base at regular intervals to judge the quality of their overall relationships with customers. Three, they contract with third-party researchers to contact a sample of everyone in their target market, including those who patronize competitors or other alternatives. The purpose of this third kind of research—we call it Competitive Benchmark NPS—is to gauge how well a company stacks up against its rivals.
Q. How frequently should an organization initiate these requests?
It varies according to the type of feedback you’re seeking. We suggest that companies ask for touchpoint and relationship feedback frequently—typically on a somewhat continuous basis (though no individual customer should receive multiple feedback requests in a concentrated period of time). Competitive Benchmark research can be done less frequently, maybe once or twice a year or even once every two years. It depends on how fast your industry is changing.
Q. How does Qualtrics fit into all of this?
Bain has certified Qualtrics NPS platform because it allows companies to gather quick, accurate feedback without unnecessary effort or expense. Of course, it automatically categorizes responders as promoters, passives or detractors. But it also allows users to determine why people responded as they did, and to track those changes over time. As a common tool used throughout a company, it helps create consistency in all of the organization’s Net Promoter efforts and helps ensure that each unit using it is following best practices. As I mentioned earlier, the Net Promoter System must rest on a foundation of fast, reliable information, and Qualtrics’s platform provides that.
Q. What’s your best advice for companies that have low Net Promoter scores?
The first piece of advice is always to listen closely to what your customers are saying. Which part of what you offer are they most unhappy with? You also have to analyze the economics of your particular business. If you could improve your scores, what would the payoffs be worth in terms of customer retention, share of wallet and other indicators? You have to build a business case for change.
Then you need to ask whether you have the capabilities and systems to implement the best practices we just talked about. Is your feedback reliable? Is it channeled directly to the front line and other appropriate people? Are you closing the loop with customers? Do you have the capacity to take action based on the feedback you receive? Building an effective Net Promoter System can be a long journey, but we’re now seeing the development of technologies that help companies simplify the measurement process and gather useful feedback quickly. Qualtrics platform is a prime example.