One important answer lies in ‘empathy’. In short, if a company consistently does the right thing by its customers, then the rewards will come in the form of loyalty and willingness to influence others. Such companies treat support as a product service that is rigorously and continuously polished in the light of customer interactions – both bad and good. That in turn leads to the development of a body of knowledge. One critical measure is the Net Promoter Score, or NPS.
Fred Reicheld’s NPS got its first public airing in an article entitled One Number You Need to Grow, published in Harvard Business Review in 2003. Since then, a considerable industry has grown up around his scoring mechanism, with many leading companies around the world using the surrounding process and their scores to improve their customer relationships and to see how they compare with their peers.
The Temkin Group, surveyed 800 IT decision makers from the top 62 technology vendors in the US to discover their average NPS score was 31.8. As a side note, our firm’s independently audited figure is currently 92.
The NPS score is based on responses to surveys following each of our support cases – currently running at 20,000, about 22 percent of whom respond. Experience tells us that respondents are most likely to be the more positive and the more negative – the people who want their voices to be heard.
The key NPS question is deceptively simple. It asks, “How likely is it that you would recommend our company/product/service to a friend or colleague?” If this said “to another person”, it could lead to a less honest response. The ‘friend or colleague’ element of the question is a subtle but powerful way to get at the truth.
On a scale of 0 to 10, the top two positions represent ‘Promoters’ – those who are likely to add to your business value through their loyalty and recommendations to others. Six and below are called Detractors – these are people who are unhappy and unlikely to buy again. Detractors may broadcast their opinions, depending on how unhappy they are. In between are the Passives. These are people who probably won’t make waves but whose loyalty is questionable. The NPS score is the result of subtracting the Detractors from the Promoters.
Of itself, an NPS is not terribly useful because it doesn’t provide insights into what is motivating the respondent to offer a specific answer. This can be overcome by inviting comment along with the score. Regardless of how this turns out, it is important to thank everyone for their feedback but make sure that you have a system to follow up with every Detractor to better understand how to resolve their issues and, hopefully, turn them into Promoters. The original scores stay in the archive, in case you were wondering, so that the quarterly or annual returns reflect the complete reality.
The NPS score is a powerful driver because it provides a clear signal to staff, partners and the outside world about the sort of customer experience your company provides. It shows those in the support value chain how well they’re doing and acts as an encouragement to improve service. In our organization for example, improving NPS is a matter of pride. Meanwhile, the higher the number, the more people out there are rooting for your company.
Critics of NPS will argue that a single score is insufficient, but any sensible company will use other metrics too – some through automation, others through further questions. These metrics might include responsiveness, issue resolution time, technical acumen, professionalism, and overall customer satisfaction. The fact remains that NPS is an excellent indicator of the state of the relationships between vendor and customers and, therefore, of likely future success.
A couple of years ago, Salesforce gathered together some interesting customer service statistics from various sources. Here are their top five findings:
- 42% of service agents are unable to efficiently resolve customer issues due to disconnected systems, archaic user interfaces, and multiple applications. (Forrester)
- 45% of US consumers will abandon an online transaction if their questions or concerns are not addressed quickly. (Forrester)
- It is 6-7 times more costly to attract a new customer than it is to retain an existing customer. (White House Office of Consumer Affairs)
- 89% of consumers have stopped doing business with a company after experiencing poor customer service. (RightNow Customer Experience Impact Report)
- Consumers are 2 times more likely to share their bad customer service experiences than they are to talk about positive experiences. (2012 Global Customer Service Barometer)
Salesforce cites other examples. According to RightNow’s Customer Experience Impact Report,(PDF)
89 percent of consumers have stopped doing business with a company after experiencing poor customer service.
From the same story, Defaqto Research is quoted saying:
55 percent of consumers would pay more for a better customer experience.
Bain & Company – a leading advocate of NPS – says,
A customer is four times more likely to buy from a competitor if the problem is service related vs. price or product related.
Here’s a horrifying one, Parature claims that,
It takes 12 positive customer experiences to make up for one negative experience.
Many companies go wrong because they consider support a burden rather than an opportunity. The reality is that regardless of what you are selling, which in our case is a blend of hardware, software and service, customers are always impressed by world class service.
If you treat support as a product rather than a cost center, it takes on a different hue. You become willing to invest whatever it takes for the best tools, training and people as part of the system by which service is delivered. You hire people with a high Empathy Quotient – those who really care about customers’ issues and want to address them promptly.
NPS is simply the barometer by which you can measure the effectiveness of your strategic decision to invest in support. It can – and does – provide valuable feedback on your product or service, your sales process, and the overall support experience.
Can you afford to ignore it?
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