Now with 2018 on the horizon, it’s never too early to start your New Year’s resolution. Once again, we invite you to kick start your Net Promoter targets and goals for 2018. If you’re not sure how to get started, don’t worry, we’ve got you covered. Check out these tips for optimizing you Net Promoter program in 2018.
Tip #1: Set Your S.M.A.R.T Goals
How do you know if your Net Promoter program is generating growth if you’re not tracking churn? Setting SMART goals is a no brainer, but remember to keep the acronym in mind:
- Specific: Vague goals never did anything for anyone. Keeping things specific in target-setting is vital for ensuring buy-in, comprehension of goals among departments, etc. Examples goals in a Net Promoter program could be, for example:
- The South-America Region should improve NPS by 10 points by year-end.
- The company should survey the top 75% clients and achieve a 60% response rate.
- Frontline should close the loop within 2 days for all detractors and within 7 days for all passives.
- Measureable: There are three types of indicators that can be measured from a SMART goal standpoint:
- Key Performance Indicators (KPIS): These metrics are used to gauge a company’s performance over time.
- Leading indicators: These are metrics that influence future behavior and are used to help predict future results. For example, “If we know that following up in 48 hours saves 60% of detractors from churning, then it’s possible to predict churn rates.”
- Lagging indicators: These are KPIs that measure results after an activity has happened. An example lagging indicator is “churn rate”.
- Assignable: Can your goal be achieved and assigned to someone in the organization? For example, setting goals at the executive, middle management and frontline level. In addition, ensure that everyone at these levels buys into these goals. This is important, as we turn to our next part of the acronym: realistic.
- Realistic: Setting unrealistic targets can be dangerous for business. Look no further than the banking industry. Wells Fargo put a tremendous amount of pressure on their sales staff to secure a certain number of accounts. This led to millions of fake accounts being created to keep up with an unrealistic target set by upper management. To ensure you aren’t putting the same pressure on your staff, it’s vital to get buy-in from every level of the organization for your customer experience and Net Promoter program. Look at past historical NPS data before setting your goals, then consult with your staff.
- Time-Related: What’s your defined time range for achieving these goals and included metrics? This goes back to our “Specific” discussion. Knowing the time frame for set goals is important. After all, a +5 increase in NPS for two quarters might be admirable. A +5 increase in 5 years, maybe not so much (depending on your own internal benchmarks. Remember: it’s relative).
We discuss a bit more about setting SMART goals in the Act eBook of our Monetized NPS series.
Tip #2: Reevaluate Your Survey Drivers
A lot can change in a year. Your primary and secondary survey drivers should reflect your touch points clearly, otherwise there will be gaps in your data. What new products or services have been created since last year? Have you revamped your website? Are you ready to get feedback on these new touch points?
To ensure your drivers are up to date, take a look every quarter or year at your customer journey, and then decide what new parts of that experience may need to be added as drivers in your surveys.
In the eBook, Root Cause Analysis: The NPS Handbook® to Analyze the Drivers of Loyalty, Jørgen Christensen discusses how companies can perform simple driver analysis to see what is driving customer loyalty or simply driving customers away.
Tip #3: Assess Your NPS Maturity
While benchmarking yourself again competitors is a good way to assess industry standards in terms of NPS, very often companies use these same benchmarks in target planning. While understanding general industry standards is important, it’s vital to remember that how you improved your own Net Promoter Score is what matters. In his article, “Why Net Promoter ”, our CSM Andrew discusses a few reasons why comparing your Net Promoter Score to others can be a slippery slope:
- You may not know how those benchmarks were constructed
- Net Promoter Score® can vary greatly based on a wide variety of factors aside from industry
- How your survey is constructed can cause variations in your Net Promoter Score
- It’s hard to verify the accuracy of some benchmarks
Since the true purpose of Net Promoter is to create growth, comparing scores doesn’t equate to comparing real growth parameters like retention, referrals and up- and cross-sales. As Andrew cleverly puts it: “The point of doing NPS is to understand how loyalty affects these growth parameters and how better scores affect them. Who cares about a higher NPS if it doesn’t create growth?”.
If your company is currently measuring customer feedback and closing the loop, you would focus on parameters such as response rates (to understand your engagement), response time and how that effects churn and retention, and of course, retention and churn rates.
In Jørgen Christensen’s Next-Generation Net Promoter white paper, he refers to this as the “Measure and Act” stage.
We talk a bit more about best practices for measuring NPS and customer feedback efforts in the first eBook of our Monetized Net Promoter series. For information on closed loop best practices, our Act eBook is right up your alley.
Companies that have begun tying their NPS to referral marketing, up-sales and cross-sales fall within “Monetize and Grow stage”, meaning they need to also focus on parameters that include referral rates, the time and cost reduced through referrals, how NPS correlates to up-sell and cross-sell opportunities, etc.
In our 2017 NPS Benchmarks survey, 44% of responding companies had a referral marketing program and tracked referrals. However, only 27% of respondents link their referral marketing efforts to their customer satisfaction or Net Promoter program.
Based on how your company currently uses their Net Promoter program, the stats that you are assessing will change.
If you're interested in seeing where you fall in terms of NPS maturity, check out the official Definitive Guide to Monetized Net Promoter by clicking below.
While there is a great deal more tips we could offer to optimize your Net Promoter program, these three are a good place to start. If you have any other tips you’d recommend, tell us! Feel free to reach out with your suggestions.
And, of course, see you in the New Year!