We’re big followers of Net Promoter Score (NPS) at HubSpot. In fact, we track the NPS of our customers, our employees, people who contact our support team, and even our INBOUND conference attendees. If you're unfamiliar with NPS, it's a customer loyalty framework that evaluates, on a scale of 0-10, the degree to which people would recommend your company/product to others. If you're curious about the basics of NPS, check out, "How the Net Promoter Score Helps You Benchmark Customer Loyalty."
Recently, I had a chance to speak with the creator of the Net Promoter® system of management, Fred Reichheld. Fred is a Bain Fellow and founder of Bain & Company’s Loyalty Practice, which helps companies achieve results through customer and employee loyalty. I asked him a few questions that I thought would be of interest to marketing professionals (because these are the questions I personally had about NPS). Here's what Fred had to say ...
Is NPS for any company, or just big consumer brands?
One of the most important decisions I made in creating NPS was to make it an open-source movement. As a result, there has been an explosion of creativity from the NPS user community around how the metric and system can be applied.
We know that quite a few big consumer brands have adopted NPS as a quick test for their traditional brand equity studies and have been quite pleased because it is so fast, cheap, and accurate. In these days of web-based communication, it turns out that NPS enables big brands to focus in quickly on promoters or detractors to test which communications are having the desired effect. But the NPS revolution extends far beyond the big consumer brands. Industrial powerhouses like GE, retailers like Apple, and web stars such as Zappos and eBay are all using NPS extensively.
Are there any differences in how B2B vs. B2C should use NPS?
We are finding that NPS is equally relevant in B2B and B2C. The only substantial difference is that in B2B, you need to be thoughtful about which individuals in an account (decision makers, influencers, users) should be surveyed, how frequently, and then integrate their feedback rhythm into the sales and service process.
We recommend that NPS practitioners contact 100% of detractors and a sample of passives/promoters within 24-48 hours of receiving survey feedback. We find that B2B respondents have even less tolerance than consumers when they observe no response to their feedback -- and they will refuse to invest time on subsequent surveys if there is no closing of the loop.
Has anything changed about consumers since you created NPS? Is NPS more or less important today?
Consumers have begun to expect that companies close the loop when they provide detractor feedback. They tend to share their opinions much more widely via social media tools -- and they are relying on recommendations of peers as the most reliable source for choosing new suppliers.
I think Brad Smith, CEO of Intuit, said it best: “In today’s social media world, the ultimate question is becoming even more important.” Turning customers into promoters is surely more important as the reach and effectiveness of web-based social tools continues to expand.
Should NPS be a metric Marketing cares about? How should marketers use NPS?
Most marketers recognize how relevant NPS can make their function. It links their world to the world of the CFO and finance -- because it is possible to calculate the economic value of a promoter, passive, or detractor in each customer segment.
I see the best marketers utilizing NPS to extend their influence across all the other functions or their organizations. It seems that every silo in the company finds it to be a personal insult when a customer decides they would not recommend that product/service to a friend -- and that personal indignation sets the stage for action and results. NPS lets smart marketers refocus the innovative energy of their company on delighting customers (profitably) rather than simply meeting quarterly cost and revenue goals.
Can poor or annoying marketing lower your company's NPS?
Absolutely -- ineffective, misleading, or annoying advertising will diminish the firm’s ability to create and sustain promoters.
What's your most important piece of advice for marketers related to NPS?
Don’t fall into the trap of thinking of NPS only as a metric. The NPS community has quickly morphed this framework into an entire system of management that enables companies to refocus their energies on the right goal: profitably delighting more customers.
CEOs recognize that NPS is a measure of their personal reputation and legacy -- so use that intuitive connection to make marketing more relevant. Everyone in the company cares about their reputation -- and can relate to the need to create more promoters and fewer detractors. Use this universal appeal to get the rest of the organization pulling in the direction that you, the marketer, sees as the right path.
Where do you see the greatest advances taking place in the NPS movement over the next few years?
More companies are recognizing that they can’t deliver a great customer experience unless front line employees are fully engaged in the process. The leading NPS practitioners are unleashing the power of NPS to employee and team management. In fact, I am creating a software-as-a-system tool that incorporates the best practices of NPS superstar companies and makes them available to every firm. Check out NetPromoterSystem.com and VoteTru.com for more details.
Have you used NPS in your business? In what ways are you using it creatively within your organization?