4 Reasons to Use the Net Promoter Score

“What is measured improves.” – Peter Drucker

We all know that measurement drives improvement. Want to get fat? Just wear sweatpants for a month and avoid the scale. For most of us, our appetites (left unchecked) will drive our bodies to places they shouldn’t go.

Want to spend more than you should? Live your life on credit cards and without a budget. Most of us will naturally spend beyond what we make. It’s really unfortunate, but our natural tendencies left unchecked generally result in bad long term outcomes.

That is why measurement is required for excellence in life and even more so in business. But why is it such a pain to establish a measurement system at work?

Because establishing a measurement system is not something that is required by most businesses. Sure, we want our monthly financial statements, but often wait 15-30 days for those after the end of each month. And all of that information is merely a history report.

What about measuring the leading indicators that will drive your financial success? That is where most organizations fail. That is where you can excel. We’ll show you how in this post.

We’ve discussed in multiple posts the incredible return on investment of creating raving fan customers. But how, as a busy leader, can you ensure that your customers are being treated well and served with excellence? You don’t have the time to speak with every customer and watching your workers every time they interact with clients is impractical and most likely impossible. What can you do?

You can quickly and easily create a measurement tool that will let you know how your employees are doing at creating raving fan customers.

The simplest, easiest and most effective tool I have found is the Net Promoter Score, also known as The Ultimate Question – as noted in the book by the same name. In our numerous posts on the ROI of customer excellence, we’ve often pointed to the dramatic increases in revenue and profitability that a firm experiences when their Net Promoter Score (NPS) is higher than its competitors’.

Before we dive into the technical details of how NPS works, let’s talk about why you should use NPS.

  1. It Works – As we’ve discussed in numerous posts on the ROI of customer excellence, the return on investment from increasing your NPS is measurable and well worth the effort.

  2. It’s Simple – How many requests to fill out surveys do you ignore daily? From the survey at the bottom of each receipt to the email in your inbox, customers are tired of being surveyed.

    It takes too long and we see too little tangible benefit from our effort. Offering your customers a 1 or 2 question survey that can be taken easily from a smartphone will help entice your customers to respond. Telling your customers what you’ve done with that data will close the loop and create customers that love you and your business.

    NPS is also something that you can do yourself or (preferably) hire someone to do for you at a very low cost. You don’t need a team of consultants to interpret the results. Determine your score by customer segment and compare it to your competition. Take action to improve your scores. Measure and repeat – pretty simple.

  3. Benchmarks – Having a great NPS can be a big feather in your organization’s cap and make everyone in the organization feel great about the work you do for your customers, but…. You’ll still get your tail handed to you in the marketplace if your competitors have a higher NPS. It’s proven the ROI of having a high NPS is not in the score itself, but in the score as compared to your competitors.

    If you have 3 dry cleaners to choose from on your way to work, you’ll chose the one that creates the most value for you. That is what NPS measures. Your score must be and must stay higher than your competitors.

    NPS is an extremely widely used system and benchmarks are available in most industries. If benchmarks are not available in your industry and geography, you can quickly run an NPS survey on your competitors.

  4. It’s Cheap – While the cost of starting and continuing an NPS system in your organization is a factor in the ROI that we discussed earlier, there is a bigger reason that cost matters. It’s called friction. If the cost and effort required to start a customer excellence system in your organization is too great, it will never happen. That is why cheap and easy matters!

    I could easily show most organizations how spending $100k on a system like NPS is well worth the cost, but could most executives get over that cost hurdle? Not as many as should.

    Once you get started using a system like NPS, you will quickly wonder how you ever operated your organization without it. But, you’ll never know that feeling if I can’t convince you to start. That is why cost and simplicity are huge benefits of the NPS system.

Are you ready to get started? Contact us now via our website or just give us a call at 229-375-5613.

Click here to learn more about implementing NPS!

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