Net Promoter Score: A great system badly weakened in the hands of poor execution


“On a scale of 0 (being highly unlikely) and 10 (being very likely) how likely are you to recommend our product/ service to a friend or colleague?”

That was “the Ultimate Question” Fred Reichheld posed when he wrote the book of the same name. And, of course, he was right; what other question could be more important? Especially when its supplementary question was added: “What was the reason you gave that score?”

By asking the question, the enquirer immediately gauges the success (or otherwise) of the quality of the service offering, understands the elements that are appreciated by the buyer and gets immediate feedback on elements where they are disappointed. The latter provides an opportunity to examine these areas and to make changes that will ultimately improve the score.

Fred Reichheld’s theory went on to propose that those that scored the business 9 & 10 were likely to be “net promoters” of the business; people who would recommend the business and become evangelists. Scores of 7 & 8 indicate that customers were ambivalent as to the service (called “passives”) neither promoting it, nor being particularly annoyed. On the other hand, customers giving a score of 6 or below, were likely to be detractors of the business, actively denouncing it.

The idea, of course, is to explore how customers feel and what the business needs to do in order to create a greater number of evangelists for the business. The benefits are enormous, especially when considering the reduced cost of advertising – when you have huge numbers of net promoters, you don’t need much in the way of costly direct advertising.

You might well have heard this question asked, as there are a number of high profile corporations using it in Australia.

Except they are not. Well, not using it as it was intended.

Two that I have come across are Bigpond and Westpac and neither “close the loop” as the system suggests for its most beneficial outcome. This part of the process involves contacting the respondent, thanking them for their response and asking details of how the problematic area of the service affected them and how it might be improved. This shows a genuine concern and a sincere effort in improving service delivery.

In the instances I have encountered, neither organisation came back to me to find out the details of my concern. As such, the whole systems fall flat, leaving customers and employees alike, even more disillusioned.

In fact, in the case of Westpac, employees’ Key Performance indicators (KPIs) are apparently attached to the Net Promoter Score they receive from customers. Employees hate it! Furthermore, a customer recently told me that they received a call from the Westpac employee belligerently asking “Why didn’t you give me a 10?”

The system has apparently been implemented without the engagement and full understanding of employees. To add insult, there is no closing the loop – customer feedback does not seem to be sought – and certainly not heeded. Under these circumstances, both employees are put offside by a system that, used as intended, goes a long way to improving customer service, customer loyalty and a more profitable business.

When I quizzed Fred Reichheld on this issue, he agreed that linking customer feedback scores to front line compensation can a big mistake. He expressed the wish that more firms would focus more closely on closing the loop quickly and effectively—especially with detractors.

On the other hand, there are many business that are examples how it works well. In the US, Apple, Allianz Insurance Group, Zappos and eBay are just a few that attribute growth and astute customer awareness to the use of NPS. OK, these are all big companies and they commit an enormous investment to the program. However, the principles of the system and the philosophy behind it are equally applicable to smaller businesses and, in many ways, it is simpler to execute at the smaller end.

Net Promoter System (Score) is a great tool and one that should be considered by all business owners. It is just a great shame when some of our corporate leaders in Australia do not use the system as intended. And this has the potential to trash it for those who do.

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What John Matthew believes about small business

That the owner has risked many things that others take for granted;

That there is no guaranteed income or reward for the considerable effort that is required;

That often, the family home is on the line to support the business and its constituents;

That there is a dignity and self-respect that is earned;

That entire communities would be better places if there was an increased appreciation and respect for small business.

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