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OPINION26 August 2014

Are we nearly there yet?

Opinion

Net Promoter Score can be a useful measure of consumer loyalty, but, says Deborah Eastman of Satmetrix, to be truly effective companies must know how to react, not just listen and measure.

Businesses embarking on their Net Promoter Score (NPS) journey go through three phases of development: initial implementation, cross-departmental collaboration and, finally, experience differentiation. Each stage is integral to any organisation’s venture into understanding its customers, but each poses its own challenges that must be overcome if companies hope to complete the journey, deliver a superior customer experience and, ultimately, increase revenue and profits.

Initial implementation

Starting the process with enthusiasm and good intentions, most companies embark on their Net Promoter journey with lots of promise. However, it’s the companies who understand NPS is an exercise in change and not just a measurement tool which thrive at this stage of the journey. These companies successfully engage customers and drive employees towards continuous improvement, encouraging them to work in closed-loop activities and share NPS data/findings alongside their other KPIs.

Achieving quick wins can be motivational for employees, but businesses must be mindful to keep up momentum as this initial adrenaline can begin to dwindle when employees can’t get to the get to the root cause of a customer issue. This is where phase two – cross-departmental collaboration – becomes important.

“If companies can’t identify a cause, how can they hope to solve a problem?”

Cross-departmental collaboration

If companies can’t identify a cause, how can they hope to solve a problem? It is imperative for any business hoping to continue its success and market development to get to the root of any customer issues. Through establishing this, organisations can impact large segments of their customer-base who may be experiencing the same problems and achieve a competitive advantage in their market.

Most businesses fail when it comes to achieving cross-functional collaboration. In many cases, only the CEO of a business drives cross-functional activities, and without another executive who has the skills driving these improvements, holding the organisation accountable for success (and failure) while addressing where cross-functioning isn’t happening, the task can prove very difficult.

Secondly – and arguably most importantly – businesses must understand Net Promoter economics. When customers ask companies to improve their level of service, provide staff with more training, upgrade system technology or employ more people, they expect to be heard and for the business to change. Unfortunately, it can be difficult to justify the expense these can incur and without an NPS economic model it’s difficult to build the business case for investments.

Experience differentiation

This is the hardest stage of the journey to reach and many companies don’t ever make it here. Big name brands such as Amazon and Uber have achieved this by building a business from the ground-up, but most existing businesses don’t have this luxury. A majority of companies have to battle with a current business model and inertia, or a culture of employees reluctant to change.

For a company to change the way it does business, it must truly innovate the customer experience and be willing to radically transform the way it reacts to feedback.

NPS can prove the results from focusing on customers are worth it – but only if companies are prepared to take the risk and not just listen and measure, but also react.

Deborah Eastman is chief customer officer at Satmetrix, and will be speaking on this subject at the annual Net Promoter Conference hosted at the Chelsea Football Club, London, from 10-11th September 2014.Research-live readers can receive a £300 discount on conference passes by entering the code ‘THREE’ when registering.

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