5 Reasons Why Net Promoter Programs Fail

Written by Sarah Frazier

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Believe it or not, not everyone is a promoter of their own Net Promoter System®. In our 2016 NPS Benchmarks Study, we found that an astounding 49% were not promoters of their own NPS® program. This is just one of the many reasons that some Net Promoter programs fail. But, there are many other NPS worst practices to look out for based on the results of our 2016 study. Check out what to avoid when it comes to your NPS program.

 


1) Poor Understanding of Goals in Company

How do you know whether you’re improving without setting goals? This seems like an obvious strategy to uphold, but companies still struggle to achieve target-setting.

There’s a few reasons why this might be:

  • No one can agree—on anything
    Let’s get to the ugly truth first. Getting everyone on the same page can be difficult. Departments bicker (I’m looking at you Marketing and Sales), people keep to their offices and only come out for birthday cake, and on and on it spins. However, this is a great opportunity for you to become your NPS Leader. Be the thought leader for your program and build a case for your system. This will involve setting meetings, looking at current data and discussing targets, compromising, and yes, talking to Sales (jk Sales, we love you).
  • Your goals are not my goals
    For those of you quick to this argument—news flash—everything you’re doing is wrong. Setting targets can be done at different levels. You can set company-wide goals, department-based goals, region-based goals, individual employee goals, etc. The important thing is that A) They are achievable, and B) Everyone knows and agrees on what they are.
  • No executive buy-in (more on this later)
    Executive buy-in is crucial for any NPS program to survive. The best way to do this is to build a case for your program. Show clearly the gaps that a Net Promoter System will fill. Find other team members to back up your claims. Then, put on a show—more on that later.

Setting agreed-upon targets is truly vital to your success. Sit down with your team, have a heart-to-heart, and then set yourselves up for success.

 

2) No Strategic Changes Initiated as a Result of NPS

So, you bought an NPS system and then did…nothing…. Again, here I mention that it’s not about the score, it’s truly what you do with it. NPS is all about actionable data.

First things first, you need to start using your system, and I mean really using it. Begin by setting up a relationship survey to assess your company-wide NPS score. Once your scores come in, it’s time to analyze your customer feedback and data. Then, take action—follow up with your detractors and passives to determine what went wrong and what you can do to bring them back to the fold.

If you want more specific information on your score, consider implementing drivers in your surveys. This will help you more clearly identify the root cause of churn. By identifying the root cause, you can begin initiating strategic initiatives and set goals for improvement.

Just like buying a Fitbit doesn’t automatically let you drop 5 pounds, same goes for your NPS program. It’s all about acting on your data.

 

3) Lack of Management Buy-in

Not to sound like a broken record, but seriously: you need the buy-in of your c-suite and executives. There’s a couple of ways to do this:

  • Show your system in action
    Every Net Promoter program should have the ability to act on customer feedback. One of the best cases you can build for your executives is that your program is making a difference. One way to do this is be showing them the “close loop process”, i.e., the process of following-up with detractors and improving on customer experience. We’ve shown this video before, but I’m happy to show it again: Our client Areas has an awesome explanation on the “Voice of the Guest” in following up with dissatisfied customers here.
  • Show the impact on revenue
    A whopping 40% of companies (20% of executives) do not know their own retention rate or churn. As the NPS thought leader, it is your job to provide these numbers and then set up steps for improving on that number. In our most recent eBook, NPS 101®: Retention Management to Combat Churn, we discuss how to calculate customer churn and revenue churn. You should be assessing numbers like these to ensure your program is making a lasting impact and then provide the evidence to your c-suite.

 

4) System Not Automated

Conducting your NPS program manually is not only a bad idea, it’s also very likely to create detractors of your entire program because of sheer tediousness. However, the major reason why you should consider going automated involves that “close loop process” we were discussing before.

According to the market research firm, Dimensional Research, the speed at which a solution is found for a customer issue is vital to a good customer experience (69%).

At CustomerGauge, we call this type of real-time follow-up with detractors “fire-fighting”. As part of this feature, emails are automatically issued based on pre-set workflows to the appropriate employees for follow up. This helps avoid the round robin effect that some customers experience when they reach out to customer service (“well, actually that’s more of an accounting issue…:).

Learn more about closing the loop in our NPS Handbook.

 

5) Can’t Link NPS to Retention

A lot of companies, given the nature of their business, have a difficult time defining their retention. This can be especially true when it comes to retail, where gaps between purchases can take longer periods of time. Here’s two definitions to keep handy:

  • Retention rate: The share of customers that make repeat purchases from your company.
  • Churn rate: The share of customers that no longer make purchases from your company.

These definitions assume that you have already defined “repeat purchases”. In retail, a repeat purchase is typically a customer that buys again within a certain period of time after his/her last purchase. This period of time depends on the products: It is usually longer for flat screens than for clothes. Look at historic purchase data to identify the typical repeat purchase pattern and ensure that most repeat purchases are included in your estimated period of time.

There are a lot of factors involved when it comes to linking NPS to retention. If you have any specific questions you’d like to ask, based on your industry, feel free to shoot me an email, sarah.frazier@customergauge.com. My inbox is always open!

 

Conclusion

Those that take advantage of the actionable nature of a Net Promoter System are the real winners. Our studies have shown a correlation between companies who embrace retention best practices and customer experience and higher revenue and growth.

Discover best practices for retaining your customers using an Net Promoter program with the free eBook below. 

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Written by Sarah Frazier

Sarah is a customer experience expert and writer. As the Digital Content Manager at CustomerGauge, she works to educate the market on the importance of employing a customer-first focus using metrics like the Net Promoter Score® to drive higher retention, revenue and growth. When Sarah isn’t typing madly away on her keyboard, you can find her spending time with her family, hiking, traveling, making bad jokes, or firmly glued to the television.

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