Celebrating 10 Years of Net Promoter
In the December 2003 edition of the Harvard Business Review (ten years ago this month!), Net Promoter Score was unveiled in a now-famous article by Fred Reichheld headlined The One Number You Need to Grow. In the article, Reichheld discussed how two years of research had revealed that the question “How likely is it that you would recommend [company X] to a friend or colleague?” could consistently be a predictor of future growth across a number of industries.
A decade on, a lot has changed. There are now roughly 6 billion active cell phones in the world, of which around 1.1 billion are mobile-broadband devices - figures that are still skyrocketing. Customers have unprecedented power to share experiences and shape opinions, with customer reviews and social media having the potential to seriously erode brand loyalty in minutes from a personal device that can be used to share information at any time of the day or night. Furthermore, cluttered channels mean competition for customer attention has never been greater.
The Net Promoter System (as it is now known) - two questions, simple to understand, fast to complete, easy to configure for a mobile device, and yielding high response rates that give the information needed to make customer-focused change - has grown its relevance to organisations seeking simple, measurable, and proven methods of gaining feedback from geographically dispersed but always wired-in customers. And just as crucially, its speed and flexibility can give organisations the maximum opportunity to close the loop on customer issues before they become a blog post, status update, or more concerning, a headline in a globally-read publication.
We'd like to take this opportunity to recognise to the organisations and people around the world that have used the Net Promoter System over the past decade - some with enormous success - to capture feedback, make change, and grow customer loyalty, and wish them the best for continuing these efforts into the next ten years. And on that note, we've been covering Net Promoter News for five years now. If you'd like to receive a notification in your inbox, please don't forget to fill out the registration form in the right hand sidebar of this page.
American Home Shield Has Net Promoter Cake, Eats it Too
American Home Shield is the largest home warranty business in the United States, but over the past few years, churn has been on the ascendant, its NPS has declined, and most of the company’s revenue gains have been driven by price increases. 18 months ago, chief exec Marty Wick wasn't sure there was enough money in the budget to fix all its problems.
Faced with an internal culture that put the needs of contractors and staff above customers, the organisation created an innovation lab tasked with mapping and understanding the customer journey from end to end. Made up of its best frontline associates from across functions, this team has uncovered revelatory and at times counter-intuitive information that has helped it reduce churn, cut costs, and increase its NPS. Example - rather than scramble to answer every incoming customer call as soon as possible, the organisation learned that in order to provide a better experience across the entire customer journey, the call centre should de-prioritise customer calls and prioritise contractor calls.
Likewise, with hot water system repairs the organisation was able to increase customer delight simply by lowering expectations. Now when a customer has a hot water system issue, they receive an email saying they may not have hot water for a couple of days due to the challenging nature of system issues. The organisation is delivering the same in terms of service, but its NPS on water heater transactions has increased from +5 to +25 and what used to be the top issue for customer escalation is now not even on the list.
Said Wick, "In a year where I funded the new innovation lab, I’m actually on track to spend less than the year before. At the same time, service requests are up about 5 percent and customer delight is up 28 percent. We can have our cake and eat it too.” knowmkt
LexisNexis Yammer Use Shows Engaged Employees Give Higher eNPS
When it wanted to reinvigorate its corporate culture, LexisNexis turned to enterprise social network Yammer to help create a healthy internal network and encourage collaboration across teams and geographical locations.
The organisation promotes the benefits of Yammer in a number of tangible ways, including “Yam Jams,” when an executive will be online for an hour during which employees can ask them anything they want. Because it gives staff access to unfiltered leadership voices, Yammer is helping break down barriers, humanise leadership and drive internal engagement.
One of the metrics the organisation tracks to measure the effectiveness of the platform is to segment and compare eNPS (employee Net Promoter Scores) between Yammer users and non-users. The average eNPS for Yammer users is 20 points higher than non-Yammer users. CITEWorld
Benchmarks: Australian Superannuation Funds
According to Customer Service Benchmarking Australia, this year’s average NPS for Australian Super Funds is +5, which compares well with banks in the market, which usually do far worse. Although the organisation does not release the scores of individual super funds, the worst score was -39 and the top 38, with 10 institutions achieving a score of 10 or better. A third of consumers scored their super fund 9/10 in the ‘likely to recommend’ category. Wealth Professional
International travel operator Kuoni, a CustomerGauge user, has introduced an initiative to segment and follow up with its Promoters. The initiative is setting a new standard for customer satisfaction for the organisation, and helps make certain that it will continue to receive repeat bookings and word-of-mouth buzz. Press release
Front Row Solutions, a CRM provider, has announced it has received an NPS of +86. Press release
Photo credit: Will Clayton (Photo has been altered)