I have yet to meet a Baby Boomer Business Owner who references their NPS score as passionately as they ought. Why is that do you think? Is it a fad? Is it common sense? I used to think so. For 10 years I assumed it was tech-speak for something I already had and understood. That is, until I read the book “The Ultimate Question” by Fred Reichheld. The realities the book exposed are simple and robust. They are useful tools in traditional (non-tech) businesses, too.
People do not describe themselves as loyal. Any business manager worth their salt knows that repeat customers are critical. You need loyalty to have a base to build from. However, you likely cannot simply ask them, “Are you loyal?” But, you can observe it by their repeat purchases. Why do you think sales-by-customer lists are so valuable? In tech companies you can watch customer traffic. From the content and time spent, the manager can observe what is most valuable to various customer types. I built my SaaS business prior to LEV with this as a central process. I floated ideas and watched the traffic. Heck, I floated light-weight features and watched the traffic. I didn’t push. I offered; and then we pulled them through our systems in ways that delighted them. In a classical, in-person service business, you don’t usually get this data heavy stream to observe. For example, someone can purchase a windshield from us, have us replace it, and pay their bill and never even use the internet. Crazy, I know. But, it works well because people have real, physical needs in their lives, and the systems built by the founders allow for speed as the top and quality as the top priority. It wins because we consistently deliver exactly what we wanted, with a little magic on top. And, while our processes produce some ambient data, the feedback loops were not as tight when we purchased it, as they are now. Why? Most of it was in the owner’s head and the hive mind of the team.
Why not survey your customers? But what should you ask? Will you annoy them? –Read on!
All high growth, profitable companies have high net promoter scores (NPS.) All. Even those who do not conduct NPS surveys. Huh? How? Why? It is because they get “free” brand champions in their customers. Customers are happy. This makes employees happier. This creates a virtuous flywheel that perpetuates itself better than competitors. They become the best, and the customers assure they stay this way because the company delights in delighting their customers. NPS measures delight.
Bad profits are earned at the expense of the company reputation. When you cut corners to make a buck, or underwhelm the customer they get a little irritated. They’re not necessarily mad at you, but they are not delighted. If you keep this up, you undercut your long term value and erode the strength of your promises, and the happy surprises that put you over the top. You lose your special touch. You gain detractors faster than promoters. You shrink. Your costs climb. You have more frustrated employees. They spend their time handling complaints rather than delighting customers. The cycle go viscous. Things spiral out of control.
In a baby boomer service business, you can measure this with an online rating. Are you five star rated? Nearly? Or not? The best produce consistently high marks in their market, versus competitors.
If you do not manage a high online review business –like most B2B service companies– then I encourage you to consider the NPS survey. Survey with a single question after each major milestone. You know what the milestones are. Keep it up for years. Use it with your team. Train on it. Equip your people to delight customers. Allow them to cut things that don’t matter. Look for ways to impress and delight.
The NPS is a measure of word-of-mouth marketing in your geography. Measure it. Infer it. Depend upon it.
Bonus strategy (not in the book):
Create the “right kind of stink.” When you send off a 1 or 2 level individual NPS score into the marketplace, be sure they have the right kind of language to repel others of similar sort. An eNPS that says “Those jerks make you work!” Or, a departed, and refunded customer that says, “They kept asking me how they might do better! All they care about is quality!”
When their like-minded friends hear this they will steer clear, saving you money and frustration. When their thoughtful neighbors hear it, they’ll be drawn to your stink like flies to a cowpie.