Net Promoter System – Review of Harvard Business Review Podcast

Harvard Business Review Podcst interviewing Fred Reichheld and Rob Markey, who co-authored The Ultimate Question 2.0

Net Promoter (NP) is a systematic process to enable leaders to keep their organization focused on delighting customers. Focus on each department in every location every day. Over time, turn each customer to a loyal one.

 

Many companies have used the Net Promoter System (NPS). In fact, it is required reading for most managers at Vanguard and Apple.

 

You have those who may act as promoters or passive detractors for your business products or service. How likely will a promoter recommend NPS to colleagues or friends?

 

NP may help close the loop between customers and employees. Figure out which actions you took create promoters, passives, or detractors. Get employees dealings with them – contacting them every day.

 

Call all detractors of your business, learn what you did wrong, and do something about it. If your company asks for customers’ opinions, you need to effectively apply much of that feedback. If you ask for feedback from your clients and it’s not seriously considered, there’s a strong change it will be perceived as a lack of respect and caring.

 

Social media certainly will change businesses approach with the Net Promoter System. Your brand and reputation is everything. According to the authors, your brand is not what your public relation department says, or what advertising says, but rather, what your customers say about you – their perception of you and your business.

 

Social media amplifies your brand or reputation and accelerates it. Do you live up to your work? Negative publicity can spread very quickly through social media. How do you proactively avoid the negative press?

 

One main advantage of social media allows leaders to listen in to the online conversation. What are online consumers saying about your brand? Savvy leaders are more aware of what’s occurring and get on top of this conversation.

 

Entire system can center on NP scores. It’s not just about measuring but also create infrastructure. Create foundational infrastructure. Allow employees to learn about the interaction and do something about it. NP can be an open-source approach to try to capture “best practices” within this NP. How their actions affect the customers?

 

Best companies, leaders focus on profitable and sustainable growth through customer loyalty. Create world where customer are served and treated the way they want to be treated. Customers become promoters, sales force, marketing campaign, public relations as a volunteer army to spread the positive message about your business.

 

Instill in employees, goals of customer loyalty, put in hands as far as the tools needed to build customer loyalty. Policies and processes, which will support. A company like Apply may ask, how well did the promoters do yesterday? Did we create a 10 in dealing with our customers? Are there other ideas or tactics that could help us create a 10? What are the best ways we can create an environment, which gives our employees the best chance of earning a ‘10’?

 

Some businesses think the Net Promoters System is a simple and intuitive process. They think it’s so simple, they delegate this project without giving it much visibility or credence without asking,who will achieve this? How will it be rolled out? This program typically requires significant change among companies.

 

Again, the authors do not recommend delegating NPS to Operations or Market Research and require them to figure out this new system without the necessary support and guidance of senior management. In addition, it’s more than the mere Net Promoter score.  It may be about eliminating silly policies and procedure. Don’t delegate to market research and ask them to figure it out. There needs to be support and backing of this program throughout the organization. Unleash power for all employees to do something inspirational. Many changes will be required.

 

Number one mistake is to focus just on scoring your service or business model without serious consideration on how to improve and move forward. Score is just a beginning (all companies), loyalty leaders got there using score as a foundation, help them create better performances and loyalty.

 

Groupon creates another option for companies to bring in customers but at the same time, it is very dangerous. If you bring in new customers due to marketing gimmick, won’t be able to build loyalty and it may be setting yourself up for a serious problem. Can’t build loyalty because of those who come in through a price offer only. People who come in on an advertising campaign are so different from the referral process, which focuses on a friend or co-worker recommending a product or service, based on your experience.

 

According to the authors, they wonder if Groupon is bringing in the right type of customers to be sustainable. Will this model earn repeat customers? Tony Hsieh of Zappos says his business doesn’t use coupons as it undermines the fundamental Value Proposition of the company. By often focusing on coupons and deals, you are bringing in many customers into your business focused on price. His value proposition focuses on relationships, reliability and service – price only is not sustainable and may interfere with what Zappos represents.

 

Often, people who are referred to your business know your business. Create the type of company where they will recommend your product or service because of their positive experiences. Build your brand, one interaction at a time.

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Kevin Schwarm

I have over 25 years of professional experience in business, information technology (IT), and customer service. Industry experience in retail, medical insurance, higher education, non-profit, financial services, and property and casualty insurance. Customer focused professional interested in providing value (save time, money and aggravation) by evaluating and analyzing information, services and products with a unique perspective.

1 Response

  1. Peter says:

    Regarding Net Promoter Score, I would would like you to point you to: http://www.wouldrecommend.com

    It is a web application that allows you to easily create and run web-based net promoter surveys, it calculates the NPS for you and you can export the results in various formats.

    I would be very happy if you or the readers of this blog would like to give it a try and share some feedback based on your experience with Net Promoter Score surveys and wouldrecommend.com

    Kind regards,
    Peter Kröpfl

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