To understand what your customers really think about your company, here’s one simple exercise: ask them to rate you on a scale of 0 to 10. Customers who give you a 9 or 10 are “promoters,” and would generally recommend you to a friend. People who score you at 6 or below are “detractors,” and are likely to make negative noise about your brand. The 7s and 8s are “passives” or “on the fence” — they don’t feel strongly positive or negative about you.
If you calculate the number of 9s and 10s, then subtract the number of 6-or-belows, the result is a company’s Net Promoter Score.
At Philips, where I direct our customer experience efforts, we began using Net Promoter Scores (NPS) during an initial pilot in late 2006. Since then, we’ve embraced the tool across our company to try to become an outside-in, customer-focused organization. This tool has deepened our focus on organizing ourselves around the needs and expectations of our markets. We have realized that our products and services have to be more than just feature-rich and technologically advanced; they have to deliver an unsurpassed experience at all customer touchpoints, from the initial shopping experience to postsales service. We also realize the need to measure our performance relative to our competitors.
Consider a simple example: a customer, accompanied by his family, goes to an electronics store on a Saturday to buy a home theater system. His whole family is excited. The kids are looking forward to playing their video games, his wife waits to watch her favorite show, and he can’t wait to play his favorite music. They come home, unpack the system (so far so good), and plug it in. And then… nothing! No picture, no sound. He calls the customer support number and works his way through the initial menu options to eventually discover that support is only available during the week. At that moment, he begins to question his whole decision for purchasing that brand. His family is disappointed, and the weekend potentially ruined.
At Philips, our customers had exactly this experience. As a result of our NPS efforts, we heard about it and quickly made some changes. We opened our customer care center on weekends, and customers responded with a surge of positive reaction. Since then, we have driven these kinds of changes throughout the company. From tying NPS performance to executive compensation (and eventually the entire organization) to making NPS a key filter for strategic business and portfolio decisions, we have embedded NPS into our company’s fabric. To further bolster our NPS learnings, we launched a web-mining project to capture the chatter in cyberspace around our brand and products. We then triangulated this to better understand the impact of social media on NPS. Studies show that over 78% of purchase decisions are made based on peer-to-peer recommendations, while only 14% are based on advertisements. This is critical.
In the last two years, we have put in place a methodology that enables us to determine how new products would contribute and influence NPS ratings for Philips. Products indicating high NPS rating potential are allowed to continue down the development chain. Those that don’t are either sent back for additional work, or even killed.
It’s important to have a large number of promoters, but it’s just as important to activate these promoters as your brand evangelists. Most companies using NPS (or similar programs) spend most of their time focused on detractors, while promoters are left on the shelf to collect dust. We decided it was just as critical to engage our promoter as it was to address the concerns of our detractors.
To achieve this we launched the Reference Promoter program. The concept was to get customers who are willing to recommend you to actually do so. As a result, customers are allowing us to capture their testimonies on video or audio interviews and as case studies. These testimonies are then catalogued by topics that typically show up in proposals, allowing our sales force to leverage this to target responses and increase sales. If a customer wants to learn more about the topic of how we manage relationships, we can pick a relevant testimony and showcase that to them. This brings NPS into the realm of driving business and creating more market share growth opportunities.
There is so much more to do in this journey. To truly dominate a market, we must execute and focus on delivering a “wow” experience to all our consumers, customers, and business partners in all the things we do for and with them. The approach: listen, build relationships, and adhere to the fundamentals of good corporate citizenship. Customers are telling us how to behave; it’s up to us to create transparency and accountability standards that are acceptable to our audience, substantiating that we’ve heard them.
For more articles like this one, download the Harvard Business Review report: Creating a customer-centered organization
*Reprinted with permission from Harvard Business Review Insight Center.