The popularity of The Ultimate Question by Fred Reichheld has resulted in a plethora of Net Promoter Score ® implementations in small and large organisations.
Looking at the headline you probably think I am another academic or market researcher criticizing NPS®. On the contrary I think NPS® is a great concept. So why do I think many NPS® implementations will fail?
To explain why I believe many NPS® implementations will fail it is important to understand what NPS is all about. In my view NPS® is about three key steps:
1. Asking the Ultimate Question “How likely are you to recommend ‘xyz brand’ to a friend or colleague?”
2. Asking the reason for the score.
3. Finally taking strategic and systematic organisation wide action based on 1 & 2 above to increase promoters, reduce detractors & try to neutralise every detractor you find.
It sounds very simple doesn’t it and that is precisely the issue. The fact that NPS® is simple to understand is its greatest strength also a potential weakness. Just because it is simple to UNDERSTAND does not mean it is easy to IMPLEMENT and EMBED in an organisation.
The popularity of The Ultimate Question has resulted in a series of DIY implementations that are destined to fail. You see steps 1 & 2 are relatively easy. The most important step in terms of deriving business benefit and driving growth is Step 3 which is not as easy. Obviously you do not get results just by asking the 2 questions.
Another way to look at Step 3 is using the ‘voice of the customer’ to re-engineer an organisation’s systems, processes, culture, service, products so that it is geared to create promoters and reduce detractors. This is a completely different to a traditional organisational mindset which is about making gradual and marginal improvements to products and services with a view to merely improving customer satisfaction.
So what do you need to consistently get your customers to rate you rate you 9 or 10 against the NPS® question?
- Strong executive engagement – This can make or break your program. How do you ensure visible long term support?
- Staff engagement – You cannot engage customers without engaging your staff first, so how do you engage them?
- Using the voice of the customer to enhance key strategic initiatives.
- Designing processes to deliver customer feedback to staff and functional areas that are in the best position to take corrective action.
So let’s look at a series of examples of doomed DIY NPS® implementations:
- A major bank does not brief staff about its NPS® strategy or the rationale behind it but asks them to recite a script after every transaction that goes a bit like this “Did I provide you with 10 out of 10 service?” This does not really roll off the tongue naturally now does it? Do you think their staff are engaged? Obviously NOT!
- Some car dealers ask customers to rate them highly on the NPS® question while the price is still being negotiated so obviously customers feel pressured to score them highly.
- A popular retailer asks the recommend question but not the reason why. So they know their score but they have no clue as to the reason why. So they cannot take any corrective action.
- A retailer that asks the Net Promoter Score ® question to prospects as well as customers. Now as a prospect how can you recommend a product/service without buying it and fully experiencing it?
- A major utility asks the NPS® question as part of its sample based tracking survey but no corrective action is taken and front line staff are not even aware of the score.
The strangest aspect of this is that all these organisations believe they are doing ‘NPS®’. As these implementations inevitably will fail guess what they will blame. You guessed it, they will say something along the lines of “NPS® does not work we’ve already tried it”.
Net Promoter and NPS Net Promoter Score are registered trademarks of Satmetrix Systems Inc., Bain & Company and Fred Reichheld.
7 Comments
Chris, great comments! How true, NPS is all about the operating rhythm that the organization sets up to improve their offer to customers. Doing the survey is simple. Setting up the processes to engage the organization to take action is what differentiates NPS. When companies only view it as an efficient way to capture customer feedback, they are missing the most powerful component!
Chris
I like your summary, I think you hit on many of the key points behind the risks that people encounter without the right focus on a holistic approach to implementing Net Promoter.
We have developed an operating model that covers the main components that companies ought to put in place. You can see the basic outline of the model at
http://satmetrix.com/satmetrix/netpromoter.php?page=2
or, even better, read about it in “Answering the Ultimate Question”, our new book that works to catalog the best practices behind successful Net Promoter programs. It’s available on Amazon. Happy New Year!
Richard Owen
CEO, Satmetrix
really cool post
inventors really go through a tough time.
thanks
secret guy
what use does net promoter score or NPS has during this serious recession time ?
is it the right time to do it ? & why-
thanks
Thanks for the very good summary of the main points of failure while implementing and using of net promoter score by many businesses.
thanks
John
Great question.
I strongly believe that the Net Promoter Score is even more critical in a recession.
Fact is that during tough economic times consumers still buy but they are more careful about how & where they spend their money. Trust in brands becomes paramount.
Nothing builds trust more than a great customer experience and/or a recommendation from a friend or colleague. Net Promoter Score implemented correctly delivers both great customer experiences and WOM.
Most marketers will tell you that due to over communication, media dilution and fragmentation traditional marketing channels don’t work as well as they used to in the past. Consumers are just not listening.
However one channel still works extremely well - people like you and me. This is why WOM is the most trusted and effective marketing channel available today.
When you listen carefully to the voice of the customer (especially detractors) and take systematic and strategic action you improve your customer experience but you also streamline your business operations and reduce costs.
In addition when you engage your staff in engaging your customers you not only create great customer experiences but again you also lower costs as staff also actively find ways to streamline your operations.
This is the beauty of the Net Promoter Score discipline. It’s much more than just asking a couple of research questions. It’s a customer focused discipline that delivers tangible results.
So potentially you can grow and reduce costs. You do need to ensure that you implement NPS systematically and strategically so the voice of the customer truly drives your actions and initiatives.
Have a look at my post titled “Cut costs or increase customer focus? That is the question”. It explains this topic in greater detail.
The link to the post is here http://www.engagedmarketing.com.au/blog/2009/04/27/cut-costs-increase-customer-focus/
Chris thanks for your comprehensive response I read your latest post as well, very insightful.
You’ve made it clear that Net Promoter Score is the way to go during these tough times. However although NPS is easy to understand it is obviously hard to implement. I suppose it requires an organisation to make changes that merit a recommendation. This is obviously not easy.
Managers should make sure that they utilise someone like you who thoroughly understands NPS as it is much more than just adding a question to an existing survey rather than trying to do a DIY job or using a consultant who doesn’t understand the challenges of NPS.
I noticed on your web site that you are a Net Promoter Loyalty Partner. Can you please explain what this means?