Case Study: Using The Net Promoter Score to Boost Sales and Lower Customer Attrition Rate

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I’ve pasted a short proposal I created for a project for a software client last year.

After studying the company for a bit I decided we needed to create better Feedback Loops between the customer’s and marketing. We had almost NOTHING in place other than a team of 10 customer service reps who, of course, only got called when the customer had a question or a complaint.

The CSRs were trained to handle the situation BUT the types of questions and the contents of the complaint weren’t being recorded in a way that could help us get to the root causes to know what to change, drive the change and, eventually, preempt the problem/complaint/question before it even occurred.

Here is the initial report I emailed to the CEO to begin discussions…

The Net Promoter Score Initiative (Rough Draft)

Main Points:

· All customers are not equal. Some customers (called Promoters) actively promote the company via positive word of mouth and referral. Others (called Detractors) HURT the company by negative word of mouth.

· A company can increase its GOOD profits by decreasing its number of Detractors and increasing its number of Promoters.

· Management needs an Operational Number related to customer satisfaction to measure, watch and improve. Traditional Customer Satisfaction Surveys don’t work. They are considered a nuisance by most customers, mainly due to their length. However, most customers don’t mind answering 2 simple questions.

· The Net Promoter Score, the % of Promoters minus the % of Detractors, provides a metric that has been proven empirically to be related to revenue growth.

o NPS = %P – %D

· On a scale of 0 to 10:

o 0 to 6 are Detractors,

o 7-8 are Passives, and

o 9-10 are Promoters.

· The NPS provides a way for management to gather information and use Root Cause Analysis to improve operations and the customer experience. By watching changes in NPS, management knows if its efforts are having an effect on customer loyalty.

· I am proposing we measure NPS at two customer contact points.

o When customers call the Call Center (The Call Center NPS)

o By surveying a percentage of completed orders from 7 days ago (The Completed Order NPS).

§ The information system should remove customers who have already been surveyed in the last 30(?) days to keep from becoming a nuisance.

· There are trade-offs in the two main methods for conducting NPS surveys, via phone and via email.

o Email

§ Negatives: Assumed lower survey completion rates.

§ Positives: Candor, Less labor intensive, automation.

o Phone

§ Negatives: More intrusive, less candor, more labor intensive

§ Positives: Assumed higher completion rates

· The survey method needs to use the same data gathering method at each measurement point and across time to be meaningful. I suggest using email for both The Call Center NPS and The Completed Order NPS because the Candor factor allows us to dig deeper into Root Causes.

· To establish a baseline NPS I recommend pulling a random set of customers who have placed an order in the last 3 months (starting from September 1 and working backwards 3 months) and asking those customers the Ultimate Question via email.

· The Ultimate Question: “On a scale of 0 to 10, how likely is it that you would recommend our company to a friend or colleague?”

o Follow-up question: “What’s the most important reason for the score you’ve given?

o Or, “What is the most important improvement that would make you rate us closer to a ten?”

The Call Center NPS

o After handling the customer’s concerns ask:

o At the end of the call “In a few minutes you’ll receive an email with a link to a survey that will help us improve our customer service. The survey has 2 or 3 simple questions to answer and it takes most people less than 60 seconds to finish. Can you help us by opening the email and answering the questions?” (By getting their explicit commitment I expect we’ll see higher completion rates.)

o “Okay, the subject line of the email is “X” and you should receive it shortly.

o The CSR Portal sends the email after the call terminates.

o If the answer to the “someone give you a call” question on the emailed survey is ‘yes,’ then the NPS system emails the information to the CSR Manager for follow-up.

o The CSR Manager calls, apologizes and probes for the root cause of the customer’s disappointment, develops an appropriate solution and records the root cause for future review by the management team.

Completed Order NPS

o Every day the NPS System pulls the orders shipped 7 days ago, filters out the customers who have interacted with the Call Center (because they will have been surveyed already) and sends them the NPS Survey Email.

o If the answer to the “someone give you a call” question on the emailed survey is ‘yes,’ then the NPS system emails the information to the CSR Manager for follow-up.

o The CSR Manager calls, apologizes and probes for the root cause of the customer’s disappointment, develops an appropriate solution and records the root cause for future review by the management team.

Root Cause Analysis

When a customer agrees to have someone give them a call on the survey this is a chance to get feedback and look for root causes.

Until/Unless we can find a proven follow-up system that others have used successfully with NPS I’m proposing this:

Dissatisfaction stems from a difference in what the customer expected to happen versus what actually happened. Their expectations weren’t met.

Some expectations are implied and obvious. They expect to get the product on-time, in good shape, in the right quantity and with the options they selected.

Other expectations are set by product copy or competitor’s positioning.

This plan will require a few new database tables and potentially some modifications to CSR Portal.

Conclusion

Previous companies who have implemented NPS have noted that the simple act of following up with dissatisfied customers has helped lower the number of Detractors.

Both the Call Center NPS and Completed Order NPS are calculated weekly by the system. The goal is to continuously drive this number up by creating less Detractors and more Promoters.

On a regular basis (bi-weekly?), a cross-disciplinary team get together and discuss the most common ‘root causes’ to decide which solutions make business sense and put a plan in action to effect the changes in the organization.

We can also relate NPS to RFM codes and track both over time.

You can read more about NPS in the book The Ultimate Question: Driving Good Profits and True Growth by Fred Reichheld

The program was a success and continues to yield benefits. We used the actual wording of the Promoter’s responses as fuel for the ad copy in emails, web content and direct mail catalogs.

The ad copy became more real and connected more with the prospects because
it was in their own words… we were communicating like they were!

Comments from Detractors are used to probe “Root Causes” inside the company’s operations and then develop solutions with department heads.

This INCREASED second and third purchases AND lowered the attrition rate.

Promoters now promote more… and, Detractors detract less! The result is more money for the company and better product and service for the customers.

Win-Win!

Jason Bedunah

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