Customer service is entrenched in most companies. Many think they are doing it well. They usually rate themselves higher than their competitors, when asked the question. However, without quantitative measurement this “rating” probably indicates a common cognitive bias known as the Lake Wobegon effect. It is named after the fictional town that figured in Garrison Keillor’s novels and his radio broadcast, Prairie Home Companion. In this town “all the women are strong, all the men are good-looking, and all the children are above average.”
Many organizations do not grasp the full importance of customer service beyond responding quickly to issues and questions. They see it as an efficiency measure. How fast was a query responded to and the case closed. The see the role as post purchase and performed by a service department.
Some see it as a retention strategy. Few, however, give it the weight it deserves as the key component of influencing whether an existing customer will recommend your product or services to another company. Clever companies are moving away from the traditional customer service view to one of cultivating and ensuring customer relationships. They recognize its role in informing and converting potential customers at pre-purchase. They consider it a key component of their marketing message and their brand. NPS goes hand in glove with value statements espousing customer centricity.
NPS or Net promoter Score is a management tool used to assess the loyalty of your company customer relationships. A customer responds to a survey following a phone call or to a written request for feedback. It is usually a single question. NPS has been widely adopted by forward thinking companies with more than two thirds of Fortune 1000 companies using the metric. It’s important to measure what matters and how customers think about you and their willingness to recommend you to others is a key metric to measure.
Explaining the Ratings
The Net Promoter Score is calculated based on responses to the question: How likely is it that you would recommend our company/product/service to a friend or colleague? The scoring for this answer is usually based on a 0 to 10 scale. Those who respond with a score of 9 to 10 are called Promoters, and are considered likely to exhibit value-creating behaviors, such as buying more, remaining customers for longer, and making more positive referrals to other potential customers.
Those who respond with a score of 0 to 6 are labeled Detractors, and they are believed to be less likely to exhibit the value-creating behaviors. Responses of 7 and 8 are labeled Passives, and their behavior falls in the middle of Promoters and Detractors. The NPS is calculated by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. For purposes of calculating a Net Promoter Score, Passives count towards the total number of respondents, thus decreasing the percentage of detractors and promoters.
How to Improve
Here are five key factors to keep in mind to improve your NPS:
1) Take it seriously: If you invest time and effort in running NPS surveys you need to commit to taking the results seriously. When managers or staff don’t like the scores, they often look for excuses to discount the findings. They should respect their customers enough to accept their feedback and look for ways to improve their individual and team rating.
2) Communicate internally: Staff need to understand the objectives of measuring NPS and how improving it drives better business results. Use your internal communications to ensure that all employees know you are undertaking the program; train them in how to respond to customers at every interaction, inform every one of the findings; and help them understand how to improve.
3) Understand your impact: NPS scores are not just related to your customer service division. It is impacted by every aspect of your business. If the salesperson fails to return a call, or the website goes down without a notification to product users, the end result is that customers are impacted and their user experience deteriorates. Everyone is accountable for NPS, measure them, display them for all to see and look for improvements everyday.
4) It’s not just about the end customer: In a B2B environment, partners are just as important as customers. They are often a source of new clients so treat them as key components of your sales and revenue cycle. If they are unhappy or dissatisfied with your performance, they won’t recommend your products or your company. And we all know how important word of mouth and social commentary is to growing sales.
5) Leverage your promoters: When you identify clients who say they are likely to recommend your business, ask them can you get a testimonial. Write a story about their experience and put it everywhere, website, blog, social media. As for detractors, reach out and talk to them, as painful as that might be. Understand their issues and what happened. Tell them what you’ve done as a result of their feedback and make sure you deliver on the promise of better service.
Measuring customer service moves it from its traditional place in the corporate hierarchy as a cost center to a recognition of the important part it plays in delivering profit and other business outcomes. Forward-thinking companies are promoting their NPS as part of their strategy to build real brand advocacy.
Having captured the NPS, they should be displayed on a leaderboard so that the entire office can see the performance. They can see high performing individuals and learn from them as part of training. They can see poor performers and provide training or coaching to lift their skills and expertise. That’s how you change a rating, a company culture, by everyone being on the same page and focused on the metrics that matter.