NPS not working? A metric is not enough – It needs to be a system.
Many articles claim that implementing the Net Promoter Score ® will solve business problems, from increasing loyalty and improving retention to increasing customer and employee engagement. However Net Promoter Score, as a metric, will not singularly achieve improvements. For most, the S in NPS is still ‘Score’ and the Net Promoter Score is exactly that, a score or a measurement.
It’s an important one, a measure of your net number of promoters which correlates to loyalty, which has particular relevance for subscription businesses that need customers to renew. However the S is evolving to mean ‘System’ and a Net Promoter System, where the score is complimented with an effective business process, is the formula that will improve your organisation effectiveness.
What does the Score miss that the System provides?
To illustrate this point further, consider an industrial engineering analogy. Your business brings several resources together including people, processes and tools to deliver a product or service. An assembly line similarly integrates different component parts, processes and skills that are presented as a product to a test or quality check at the end of the line.
The result of the test or quality check leads to some adjustments in the assembly process to improve yield. For example, a materials issue would require incoming materials to receive additional inspection, while an assembly issue would require a machine adjustment or additional operator training. These adjustments result in defects being eliminated and a higher yield passing the test and inspection. Higher output, better quality, improved business performance. Without these adjustments the test and inspection processes do not add any value. Equally, if these closed loop process adjustments are poorly executed, the improvements will not be fully realised.
The Net Promoter Score is your test and quality inspection process in a business context and combined with the closed loop corrective actions, NPS can be considered as the Net Promoter System. Like factory test and quality checks, the Net promoter Score measurement (typically survey questions) needs to be carefully designed with the right tools to provide useful data. However, without the closed loop actions to make improvements further back in the process, there will be no tangible improvement. Sure, measurement will increase awareness and that will increase the bias for action but meaningful improvements need deliberate intent, ownership and accountability.
The point then is that the Net Promoter Score is a key measurement but for it to improve customer’s success that results in repeat business and positive advocacy, it needs to be accompanied with an effective business process, or system, to interpret results, define and implement the required improvement actions.
The business process for driving improvement needs an overall owner but each relevant team equally needs to commit to participating in the improvement process. Leaving it to one person to single-handedly drive improvement will not work. A regular review of the NPS data and trends is needed to define any new actions with owners and timelines and any help needed to complete previous actions.
A critical component of any improvement strategy is to engage employees at all levels. As improvements typically involve change and additional effort, all employees need to understand the context of these changes, what the desired outcomes are and how their role and individual efforts play a part. This takes real management effort and intent. Employee engagement requires its own strategy encompassing several initiatives and its own measurement and closed loop improvement process.
To be fully effective the improvement strategy needs a level of integration with broader organisational processes. For example, if improving Customer Success is a key business goal in order to maintain renewal rates and NPS is a key metric, then leaders and managers compensation bonus calculations could include NPS performance as a component. Similarly, hiring processes could look for the candidate’s values being aligned with the organisation’s values and communications updates should include NPS trends and key improvements in the appropriate context in employee meetings.
Taking NPS from Score to System:
Net Promoter Score on its own is not the panacea to fix customer satisfaction and loyalty and protect renewal rates – but with the right supporting business process and integration with the wider organisation it takes on a new scope as Net Promoter System. Now it stands a great chance and with the right organisational support it will drive sustainable improvements in your business performance.
CustomerLink helps your business succeed by providing the link to your customers and their satisfaction with your product or service. With broad industry experience improving customer operations for some of the world’s leading brands, we combine technology with deep knowledge in business process design and people systems to measure and improve your customer’s satisfaction, value and overall experience in dealing with your company.
Contact us today to find out how we can help your business on +353 1 4100600 or contact John Kelly at firstname.lastname@example.org