Importance of auditing your NPS program – Part 2
Normally when any business sees there is money to be made in a certain concept, they rush in all guns blazing. This is what happened with the Net Promoter Score.
Over the years the Net Promoter Score, introduced and developed by Fred Reichheld and NICE Satmetrix, has become a global standard in measuring customer loyalty. The reason for its popularity was driven largely by the fact that it is easy to understand as opposed to a ‘black box’ Customer Service index, and also because everyone knows that Word of Mouth is the most powerful sales and marketing channel.
However, it can be debated that the economic analysis that said NPS loyalty leaders typically grow at 2.6 times their category average and enjoy 15% lower operating costs is what ultimately drove the success of the metric. After all, who would not want to drive growth and reduce costs at the same time. There was potential money in getting a good NPS, and businesses dove right in.
Over several years of working in the NPS consulting space and my 10+ years of heading Engaged Strategy, our exclusive benchmarking and other studies have revealed a few interesting statistics that illustrate that there are monetary benefits in NPS, but only if it is done the right way by focussing on customers candidly:
While these interesting statistics beam at us, our benchmarking studies have also revealed that the largest corporates with access to the best strategic consultants, CRM software, high calibre staff and experienced management typically have the lowest NPS scores.
Is it hubris? Or is it arrogance? Is the management more removed from the frontline? Or is it because customer economics are not fully understood? Are executives only paying lip service to being customer focused? Is it because the drivers are short-term profit which is deterring building long term sustainable competitor advantages? Is it because large organisations are not as nimble?
Going by my experience, probably all of the above to a certain degree contribute to low Net Promoter Scores. However, the biggest reason in my opinion is the inability of such an organisation to effectively treat a VOC or an NPS program like an exercise in organisational change, or maybe even transformation.
To achieve this, you must remember it’s not a score and not a survey but an organisation-wide discipline. This discipline is about listening carefully to customers, taking strategic action on key drivers and pain points, finally engaging staff to move beyond transactional interactions to create experiences and propositions worthy of recommendation.
Over the last 10-odd years and our experience across 20+ industries, we have identified 6 key elements that need to be focused upon to drive NPS success:
- Granular Measurement of key aspects that enable the delivery of excellent customer experience
- Best practices in Governance within an organisation
- Multi-level Training of specialised skills across relevant departments
- Organisational Discipline to ensure NPS drives regular action organisation-wide
- Staff Engagement to ensure understanding and commitment to the specific roles required
- Insights that go beyond statistics
The best way to assess this across your organisation is to audit your NPS program regularly.
As experts within this industry, Engaged Strategy has designed an NPS Mini Audit. In approximately 5 minutes you can identify the strengths and gaps in your organisation’s NPS program at a high level across these six core dimensions, and also gain access to a comprehensive report comparing your results with other NPS practitioners to understand what works and what doesn’t.
While NPS insights are invaluable and a high NPS score is incredible, it must be referred to more as a means to look forward and modify business plans to provide enhanced customer experience, rather than be referred to as a vanity metric that prides on “what’s happened”. On this subject, I discussed how an NPS audit can either be treated as similar to servicing a car regularly or servicing a car with such great skill and precision that it functions like a Formula 1 racing car. It’s up to each organisation to decide whether all they need from an NPS score is to enjoy just a smooth ride or enjoy a thrilling, successful and smooth ride through its NPS journey. You might enjoy reading Has Your NPS Program been Serviced Lately?