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Nothing but Net: NPS and Customer Engagement

While this posting originally appeared on  SoundBite Communications' blog this past December, it struck ICMI as relevant for two reasons. 1) March is all about metrics and NPS is certainly an important Beyond the Basics consideration, and 2) This month is March Madness and the basketball references resonated well!

Recently a college basketball player scored 138 points in a game, setting an NCAA record. If there was ever an example of “nothing but net”, this is one. Being the sports stats fan that I am, I immediately started going through the breakdown of the percentages of the final score that were three-pointers, two-pointers and foul shots. I run through that same thought process when I engage with companies on their surveys, such as NPS, analyzing the data to figure out what they are doing right and where they could make improvements. Are the scores still nothing but net?

NPS is a straightforward measure of client satisfaction and loyalty that tells us the extent to which a customer would recommend a product, company or service to another. Industries such as Telecommunications, Financial Services, and Retail often use this survey after a sales transaction, a service appointment or an inbound call to a contact center. NPS uses a simple methodology based on one question: How likely are you to recommend a company, brand or product to a friend? It ranks responses on a 0-10 scale and categorizes them in three buckets:

  • Promoters - those who indicate that they are extremely likely to recommend, ranked 9-10 (our “three-pointers”),
  • Passives - are satisfied customers but unenthusiastic, ranked 7-8,
  • Detractors: those who are not likely to recommend a product or service, ranked as 0-6.

NPS is calculated by subtracting percentage of respondents who are detractors (0-6) from promoters (9-10), to get the final tally. If this finally tally is a positive number that is generally considered to be a good NPS.

NPS can be gathered through any number of survey channels, including voice, text, email, and web. Personalizing the delivery method by channel preference has been shown to increase the response rates, and while NPS is only a single metric, it allows companies to target follow-up outreach to promoters and detractors based on their specific leaning. A tenet of customer service says each customer who has a positive experience with your company tells two-to-three people of this fact, while a customer who has a negative experience tells 10 people. And with social media, the reach of promoters and detractors is a wider playing field than ever before.

If the scale is weighted toward detractors, one sees how even a small improvement in their score can change them to promoters, tipping the scale for a win, just as the basketball player’s 27 three-point shots did. But how do companies get in position to make more of these big scores when it comes to customer interaction? Come back next week to find out how to sink more three-point shots with those detractors and improve the score. We’ll discuss what to do once you have your survey results, how to implement cutting-edge closed-loop-survey methodologies and some examples of our clients who are doing it right: turning those missed foul shots into nothing but net.