npsI excitedly told a colleague that Fred Reichheld is speaking at G-Force EMEA, our premier customer event for Europe and its neighboring regions.  His response was “Who?” I said he’s the guy who invented the Net Promoter Score (NPS), and he responded, “Ahh, I know it’s important. But frankly, I don’t know what it is.”  So here is a primer my friend.

Fred Reichheld, the founder of Net Promoter Score, will be speaking at G-Force Vienna 2013.

What is ‘Net Promoter Score’?

The Net Promoter Score is a powerful yet simple technique to judge customer satisfaction, loyalty, and market momentum.  It was proposed by Fred Reichheld of Bain & Company in 2003 as an alternative to traditional surveys.

Its name, Net PROMOTER Score, explains everything.  Your customers are surveyed with just one question, would you recommend our product or service to someone else?  And, the customer is encouraged to add comments.

This approach jettisons a typical string of questions about loyalty, satisfaction, urge to leave, etc and doubles down on the word ‘recommend’.  It places your customer on the spot.  Would he or she stake their personal credibility behind your product or service?  Psychologically, it also triggers your customer to explain your best or worst feature.  If their minds agree to a recommendation, they are also primed to explain why, which directly points at how your company is different.

The surveys are quick to compute, and deliver a top-level score that spans from as low as −100 (everybody is a detractor) to as high as +100 (everybody is a promoter).  A score that is higher than zero is good, and a score of +50 is excellent.  Typically, managers focus on the top segment of those who care, the Net Promoters.

Fred Reichheld’s approach was a radical departure in 2003. Typical surveys were longer and more nuanced about the customer experience.  But, he argued they were too slow to compile, were arduous for the customer, and got expensive to use everywhere and all the time.

The longer surveys also contained a fatal flaw – senior executive management never embraced them for long.

Why is the Net Promoter Score important?

Besides being faster and cheaper, Fred Reichheld contends the Net Promoter Score is a more useful predictor of growth.

From his 2003 article in the Harvard Business Review, he wrote that “in most of the industries that I studied, the percentage of customers who were enthusiastic enough to refer a friend or colleague—perhaps the strongest sign of customer loyalty—correlated directly with differences in growth rates among competitors.”
He goes on to clarify that “evangelistic customer loyalty is clearly one of the most important drivers of growth. While it doesn’t guarantee growth, in general profitable growth can’t be achieved without it.”

That combination of survey simplicity (fast, clear, cheap) and confidence (the score predicts growth) is like catnip to senior executives.  Management must pursue growth.  This fact also explains why they have trouble focusing on just satisfaction and loyalty.  Momentum is obscured.

If you tie your operation to its impact on the Net Promoter Score, then you should hear the happy sounds of corporate wallets being unzipped for your projects.

How would you use it in Customer Service?

The standard techniques of Performance Management and Workforce Optimization will gladly absorb something as simple and compelling as a Net Promoter Score.  But, your existing technology and techniques may trip you up.

If the first step is to systematically ask your customers if they would recommend your business, then the next step is to capture the answer, especially if they give comments.   From there, you marry the customer scores with the wealth of interaction details in the Contact Center.  This includes the operational measures like first contact resolution as well as the business purpose (Product, Billing, etc), and which employees handled the interaction, as well as their degree of training.

The first big challenge for most contact centers is that existing technologies will slow you down, if not completely derail your efforts.  And remember, executives like Net Promoter Score because it is fast. If you can’t keep up, your projects will get left behind.

To move forward, contact centers must evolve from ACD Reports to a reporting solution that captures efficiency metrics (wait time, handle time, etc) and effectiveness metrics (sale made, issue resolved, etc), while using a business-centric database to expedite analysis.

Another hurdle is moving past Quality Monitoring and on to Speech Analytics, which can systematically capture and catalogue the comments far more quickly than manual techniques. I’d place a premium on solutions which guarantee a higher rate of detection and accuracy.