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Transitioning From Customer Satisfaction to Net Promoter Scores

This is Judi Uttal signing back in for my next post for the Technology Marketing Center. 

A few years back I did a comprehensive customer satisfaction survey for my company.  It was unclear as to whether in their 30 year history they had previously measured customer satisfaction.  The survey was a huge success with over 1800 individuals responding to a very comprehensive questionnaire.  The survey provided marketing fuel as the level of satisfaction was quite high, but it also pointed to key areas for improvement. 

The art of customer surveys has become a personal obsession.  I found myself reading up on the latest trends and thinking about doing survey work as a side-career.  As I spoke with people I learned about the Net Promoter score (NPS) paradigm.

So what is the Net Promoter score (NPS)?  It is a customer loyalty metric that was developed by Fred Reichheld  from Bain & Company. The metric is based on responses to the basic questions, “On a scale of 0 to 10, how likely are you to recommend our (company product/service) to your friends and colleagues?”  After collecting a statistically representative sample, you take the percentage of people scoring 9 or 10 and then subtract the percentage of people scoring 6 or lower.  This becomes the Net Promoter score.  The NPS is based on the theory that folks scoring 9s and 10s are likely to be strong “promoters” of your product or service; while folks scoring 6 or lower are likely to be product or service “detractors”.  Those scoring 7 or 8 are likely to be neutral and are called “passives” and so their scores are tossed out.  Typically the recommendation question has a follow-up that solicits why.

What Reichheld and his followers found was that having a single metric gave companies the ability to focus on driving customer loyalty.  Through continuous survey work, companies such as Apple, Amazon, com, Costco and USAA were able to measure and improve their loyalty scores and grow profits.

Recently, I started a new job and was trying to evaluate the relative success of that company’s technology marketing content delivery programs.  One of the keys to driving leads and maturing contacts at this company are webinars.  Webinars are held once a week and are split across four different products.  After participating in a webinar, attendees receive a questionnaire. 

I decided to use these surveys to try and figure out whether a particular webinar was a success.  The questionnaire included things like rate the material, rate the presenter, rate the speed of the presentation and so forth.  Although I was able to create charts – the delta between a good webinar versus a mediocre were unclear.  Then I noticed that there was a question on whether the attendee would recommend this webinar to a colleague.  I decided to transform those responses into a NPS. What I found is that it dramatically clarified which webinars that were successful, achieving a 70% NPS or higher versus those that were failures, with a 20% or lower score.  My next step will be to listen to the webinars that scored high and compare them to those with low NPS metrics.

Customer loyalty is fundamental to fueling corporate growth.  NPS provides as good a metric for focusing an organization around customer loyalty.  To learn more about NPS, I recommend reading The Ultimate Question 2.0 by Fred Reichheld.

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