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Why you should pay attention to your Net Promoter Score

Good customer service could be the competitive advantage you’ve been looking for, and a new methodology called the Net Promoter Score is helping businesses see how likely customers are to recommend them to another person. Here’s how it works.

Sending out customer feedback surveys are, for many of us, a crucial part of doing business. The responses provide us with a deeper insight into our operations, culture, customer service skills and more than we could ever glean ourselves because we get an outsider’s perspective.

If we act upon those insights we’re often able to improve customer acquisition, customer retention, positive word of mouth, staff satisfaction and a number of others factors that combine to make for a successful business.

My attention has recently been drawn to a way of measuring customer satisfaction – more specifically their likelihood of referral – by using a methodology called NPS (Net Promoter Score). It is often said that your reputation with a customer is only as good as their last interaction with you. This is the premise behind NPS. The specific measurement of that most recent transaction enables a business to hold the staff involved more accountable for the service they provided, which in turn arms you with the knowledge you need to up the service ante.

This globally recognised methodology seeks to measure and understand the drivers of client loyalty, a direct result of client satisfaction. Rather than focusing on whether a customer is satisfied or not, NPS delves into how likely they would be to recommend a business to another person. The theory behind it is that the customer’s desire to refer is a higher benchmark to hold yourself to than the level of satisfaction you have given them. And the marking system is a little tougher too.

Depending on how a customer answers the referral question directly after interacting with your business, ranking their likelihood to refer along a spectrum from 1 to 10, they’re named a detractor, a passive or a promoter. Your NPS score in any particular time period is calculated by taking the percentage of promoters and subtracting the percentage who are detractors. The equal weight given to those who look upon your business negatively means you’re presented with a clearer picture.

According to the official NPS website, an average company works with a 5-10 percent NPS (ie. only a few more promoters than detractors) while those enjoying healthy success usually have an NPS of between 50-80 percent. To improve your NPS a good first step is to concentrate on moving the passives up to promoter level while nurturing your existing promoters, then begin to tackle your detractors.

A budget hotel business a number of colleagues and I interact with regularly has moved to using NPS. We’ve definitely noticed and appreciated the difference it has made to the quality of service. And become promoters in the meantime.

We’re sent a survey after ever stay, asking the all-important recommendation question along with the usual customer feedback survey questions about cleanliness, friendliness, speed of service, etc. Now, our comments don’t fall on deaf ears. I rarely complain but the one time I did – long hairs in the extra bed blanket for the third stay in a row (shudder) – prompted ongoing attention to this detail. Now, every time I stay my room has a plastic-wrapped extra blanket and pillows.

One of my colleagues is a daily user of shower caps and after a couple of cap-less stays she noted this in the survey. Upon the next visit her room contained two shower caps and has done since. Not to mention the personal thank you she received upon arriving for her next visit, for reviewing the hotel on TripAdvisor.

Simple things but we’ve appreciated them because they spoke to our unique needs, and we’ve certainly talked about them to a number of people.

Consider investigating NPS or at least reassessing the value of your feedback surveys. A little innovation may move or keep you ahead of competitors.

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Kristy Sheppard

Kristy Sheppard

Kristy Sheppard is MYOB's manager for public relations. She has more than a decade of experience in the public relations space, spanning B2C and B2B corporate and consulting roles within the technology, financial services, franchising and FMCG industries. At MYOB she delivers programs communicating its vision, business advocacy stance and milestones as it advances products towards and within the online landscape.

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