Rob started by asking the audience whether their companies have world class NPS scores…better than Apple? The reality is that there is a lot of noise around NPS with executives demanding scores or asking how to treat NPS.
There are 4 ways to help leaders understand NPS...Take them back to first principles, work out the loyalty economics for your business, link NPS to growth and take action. Most companies aspire to grow and promise that to shareholders, sometimes up to twice the market in revenue and 4 times the market in profitability. But Bain’s research shows that less than 10% achieve profitable, sustainable growth over 10 years. Those companies in the 10% tend to be loyalty leaders. About 80% of execs think they deliver a superior experience, but only 8% of their customers agree. This delivery gap is what a lot of the Net Promoter work is focused on closing.
Rob reminded us how promoters drive growth and lower cost. You need to quantify the value or cost of your promoters and detractors for your business.
There are two lenses for NPS...Top down and Bottom up. Top down is more an anonymous view of the marketplace and competition. Whereas bottom up is from measuring the experience your actual customers are having with your brand. The scores can be different, and some companies like Philips are using top-down NPS to set business goals for each business unit. This can allow for an apples- to-apples comparison with competitors. Some tricks to help top-down NPS are to define the relevant competitive set, decide how deep to go, develop organizational involvement and link it to growth. As part of the analysis of the data it is important to compare your results against your competitors to understand the relative gaps. Bain has redone its original analysis that linked NPS to organic growth.It is based on 135 companies and over 225,000 customer responses. The data showed that loyalty leaders outgrow competitors by over 2X. The linkage between NPS and growth is stronger where there is real choice, a mature industry, low switching costs and revenue driven by customer decisions.
In summary, to be successful in building a Net Promoter system, you need to have a reliable outcome metric, have a closed loop feedback system and a strategic priority to earn loyalty.