“If you can’t measure it, you can’t manage it”
That quote has been attributed to many individuals, the most famous being those icons of modern management philosophy Peter Drucker and Edward Deming. I would hazard a guess that all successful business men and women have paid attention to that quote and made sure they measured as many components of their companies as possible!
Balance sheets, income statements and productivity statistics can all be relatively easy to measure and then manage to industry benchmarks. But one of the most difficult areas in a company to quantify can be customer satisfaction and loyalty. Yet customer satisfaction and loyalty can lead to repeat business, easier sales, more new customers, additional revenue and higher profits! The questions are always the same: how do you measure it? What metric(s) do you use? How do you manage it? How do you make sure the numbers you are reporting are unbiased?
What follows is a story about Thermocopy’s quest to manage their customer satisfaction and loyalty.
Most companies in our industry, if not all of them, claim that they have the “best service in the business.” What does that mean? Few have a way to really measure the satisfaction and loyalty of their customers. They use internal productivity measures to tout how well they are doing, assuming their achievement of that metric is resulting in customer satisfaction and loyalty. That assumption can be erroneous, as there may not be a direct correlation of the metric’s achievement with satisfaction. As an example, I visited an account in which our excellent service statistics should have netted a high satisfaction quotient for us. But when I presented the customer with these statistics, I learned something interesting. The customer said they liked the service we provided; but, they would be more satisfied if the technician would let them know when he or she was arriving, when the equipment was fixed and the cause of the problem.
In our search for a way to measure our customers’ satisfaction and loyalty, a trusted vendor brought the Net Promoter Score system to us. We discovered the Net Promoter Score system is the gold standard for companies who want to translate great customer experience into profitable growth. It enables us to capture feedback after every service call, and it is a straight-forward loyalty metric that holds Thermocopy and our employees accountable for how we treat customers. It is also a discipline for using customer feedback to fuel profitable growth in our business. It has gained popularity thanks to its simplicity and its linkage to profitable growth. Employees at all levels of our organization understand it, opening the door to customer-centric change and improved business performance. Thermocopy started to use this measurement of customer satisfaction and loyalty in January of 2014.
The process is simple. After every service call is completed an email containing a survey is automatically generated and sent to the client by our ERP system. We have no control over this process. All survey responses, the good, the bad and the ugly, are sent directly from the client to Satmetrix (the developer of the NPS system) to score. This ensures a true third-party certification process. We also receive a copy of the response. Since January 1, 2014 there has been a 15% response rate to the emailed surveys.
The surveys include several questions about the service the client has received. However, the scoring of just one key question is used to determine the Net Promoter Score. That question is, ‘How likely is it that you would recommend Thermocopy to a friend or colleague?’ Respondents are grouped as follows:
- Promoters (score 9-10) are loyal and enthusiastic customers who will keep buying and refer others to you.
- Passives (score 7-8) are satisfied but unenthusiastic customers who may be vulnerable to competitor infiltration.
- Detractors (score 0-6) are unhappy customers who can damage your brand.
The percentage of Detractors is subtracted from the percentage of Promoters to determine the Net Promoter Score.
Why is that one question used to determine customer loyalty and satisfaction? I think about it like this: I am very careful about my referrals. I believe my reputation is on the line if I refer someone or a company. What if my referral does not work out? What if my peer has a bad experience with my referral? If I have any doubts about the outcome, I probably will not make the referral. It is this psychology and thought process behind the survey question about referrals that makes it THE QUESTION!
But just knowing your Net Promoter Score is not enough. A company must be committed to changing it. Our Net Promoter Score for the month of January, 2014 was 85.14, and we were ranked 83rd of the 108 companies in our industry utilizing the measurement at that time. We decided that score and ranking were abysmal and made the determination to do better. Since we had a measurement, we put in place processes to manage the results. We review the surveys in company meetings on a weekly and monthly basis and the Net Promoter Score is published on our web site. The surveys are also part of the individual team members’ monthly review process. What has been phenomenal is that we now have a way of knowing what our customers think is important, rather than what we think is important. The result of these processes was an improvement in our 2016 Net Promoter Score to 96.24 and a ranking of 21 out of the 240 companies reporting for our industry. While that is significant improvement, we are not finished with our journey to better customer satisfaction.
I find it very interesting that the average Net Promoter Score for North American companies is 10. Listed below are the Y-T-D 2015 Net Promoter Scores for leading companies in North America.
We use the Net Promoter Score as a marketing tool to differentiate us from the cluttered technology company world. We advertise it on our web site, in radio commercials and in print ads. We use it for evidence of our company’s quality in RFPs, and we use it in our reviews with clients (yes, you can get the NPS scores for individual clients and the comments that were made by that company’s employees). Believe me, there is nothing more powerful in a client review than reviewing their employees’ remarks and their satisfaction with your company.
In closing, I would recommend investigating how to determine what your Net Promoter Score is, then implement the processes to improve it. It can help make your company a better company operationally and financially!
Visit http://www.thermocopy.com/our-company/net-promoter-score/ for the most up-to-date results of our journey to 100% customer satisfaction and loyalty.
If you would like more detailed information about the Net Promoter Score visit http://www.satmetrix.com/nps-score-model/.
* Net Promoter, NPS, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reicheld
