Welcome to a brief overview of using Net Promoter Score (NPS) as the basis of strategic decision making in your organisation.
Would you like to make more informed, pointed decisions in your organisation? What about decisions that are based primarily on customer feedback, to improve their customer journey in the future? Well, lucky for you, that’s exactly what we’re going to talk about today as we unpack Net Promoter Score (NPS), how you can use it in your organisation and how you can drastically improve your operations with a simple survey.
Before we jump into the how, let’s talk about why this is so important.
Leaders and managers can often be so deeply entrenched in the smallest of details in the organisation that they lose that all-important sense of perspective. Regardless of your style of leadership, it’s easy to get caught in the trenches within your operations, and lose track of what’s going on in the frontlines- where your customers are. Once you’ve lost that empathetic approach to your customers, even for a short amount of time, you’re at risk of losing them to a competitor that is more in-tune with their needs and desires from an organisation like yours.
What is Net Promoter Score, or NPS?
Net promoter score, or NPS, is the way in which your organisation measures customer satisfaction levels, as well as the likelihood of a customer recommending your organisation to their colleagues, peers and family. Your NPS specifically measures your customer satisfaction and loyalty, not necessarily your organisation’s performance, and gives you a huge opportunity to make improvements in-line with customer requirements.
This is done through a customer survey or questionnaire, with the responses split into three categories. A promoter scores your organisation either a 9-10 on the scale, while a passive customer is anywhere between a 7 or an 8. Detractors are those that have ranked your organisation anywhere between a 0 and a 6.
How Do You Calculate Your Net Promoter Score?
To find out your organisation’s NPS, you need to add up your survey responses, and subtract the number of detractors from the number of promoters. Passive customers are eliminated from the equation because they could swing either way, while your detractors are sure to give bad feedback, and your promoters are likely to recommend you to friends, family and colleagues.
NPS = (% of promoters) subtracted by (% of detractors)
How to Improve Your Organisation Using Net Promoter Score?
Detractors will give you some of the most important feedback in terms of friction or pain points they identified through their customer journey. In essence, your NPS is mapping out what went right, what went wrong, and how that made the customer feel. While it’s psychologically-boosting to read the positive feedback, the essential changes that need to be made will be pointed out in any negative feedback you receive. It might be uncomfortable to confront shortfalls in your operations, but it’s essential to ensure your organisation remains proactive and responsive to the needs and demands of your customers, otherwise you risk losing them to a more responsive competitor.
The goal here is to get customers to shine a light on things that you might have missed. It’s easy to become so consumed in day-to-day operations that you lose perspective, and leave gaping holes that need to be addressed for the benefit of your customers. An NPS helps to facilitate this change, by letting your customers identify the things they liked – and didn’t like – about your organisation.
You should now have a clear indication as to where your efforts should be pointed while you make changes in your organisation. If there were any comments from customers identifying the same pain or friction-point, you need to ensure that they’re being addressed as soon as possible!
We’ll talk about how you can make even more impactful changes as you form a great customer feedback survey in a piece coming soon. It’s a relatively simple process, but you need to make sure your questions are pointed, and designed to get insight on a specific area of your organisation rather than vague, general questions that leave room for ambiguity.
For now, thanks for your time, and I’ll see you in the next piece.
Kobi Simmat, Director & CEO of the Best Practice Group.