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Net Promoter Score, a basic measure of customer sentiment, is now used by two-thirds of the Fortune 1000. What makes it such a powerful number?

This article about NPS (net promoter score) caught our attention: https://fortune.com/longform/net-promoter-score-fortune-500-customer-satisfaction-metric/

Here are our key takeaways:

  • Vanguard CEO Tim Buckley sees his firm’s Net Promoter Score every time he looks at the management dashboard on his screen
  • Bill Barton, CEO of California Closets, checks his company’s score first thing every morning and has built his highly successful business on it.
  • Intuit product managers check their score every day and have been using it since it was invented 17 years ago
  • the National Health Service in England uses it
  • Michelle Peluso, from IBM says, “It’s more than a metric. One could use the word ‘religion.’
  • NPS’s advance across industries and countries is, if anything, accelerating.
  • Maurice FitzGerald, who used NPS when he ran the customer experience function at Hewlett Packard Enterprise’s software division and who has written a book on how to apply NPS. “It speaks to people so well. The simplicity of communication is absolutely why NPS is the standard.”
  • This is a long-term metric. You can drive yourself crazy if you get hung up on the day-to-day or month-to-month. But if you use it for improving long-term, people will never go back.
  • Diego Rodriguez, chief product and design officer at Intuit, which has used NPS since it was invented
  • the NPS score gets all the attention, but “Why did you give the score that you gave?”—that delivers the value. “What’s more powerful, and required to get the real impact, is to make use of feedback from individual customers.” The score grabs everyone’s interest and is useful as a trend indicator, but the real importance of the first question is that it sets up the second question.\
  • Parsing the answers to that second question is not easy for companies with thousands or millions of customers. But now technology can read responses and analyze them. “The real gem and actionable insights come from the verbatim transcripts,” says Marc Stein of Dell Technologies, “and we’ve learned the importance of bringing data science and machine learning to NPS.”
  • “I’ve been blown away by how this data can be used for continuous improvement of customer experience,” says Boris Groysberg, a Harvard Business School professor who has studied NPS. “The ROI over five years is so much higher than you can get in three to six months.”
  • The value of the “verbatims” is their power to center a manager’s thinking. At Intuit, chief product and design officer Diego Rodriguez says, “I can log in at any point and see the verbatims coming in. It’s very grounding and humbling.”
  • California Closets CEO Barton starts his day reading the previous day’s verbatims: “I want the first voice in my ear every day to be the customer’s voice. It just grounds me.”
Be careful not to cheat
  • Bake NPS into reward systems - “Any metric can be gamed,” says Vanguard’s Amy Cribbs. For that reason in part, she says, “we do not bake NPS into individual reward systems.” But some companies do, incentivizing workers to scam their employers in ways that can lead to costly mistakes in the quest to earn customer loyalty.
  • Begging - Seemingly everyone in the field of customer experience has heard about car salesmen who, at the end of the sale, tell customers, “You’re going to receive a survey, and if you don’t give me a 10, I won’t be able to feed my kids.” Maurice FitzGerald, who used NPS at Enterprise and has written a book on the measure, says this is “the rule rather than the exception” in U.S. auto retailing. Savvy customers sometimes beat the salesman to the punch by saying, near the end of the negotiation, “Take off another $500, and I’ll give you a 10.”
  • Nudging - Responses can be influenced in many subtle ways. Managers whose bonuses are tied to Net Promoter Scores may send a survey in which 9 and 10 are green, 7 and 8 are yellow, and everything else is red. Or they may send a separate email saying only 9 and 10 count. Or, before the Net Promoter question, they may ask a question designed to get a favorable response; respondents want to be consistent and are thus more likely to answer the NPS question with a high number. FitzGerald reports a related stratagem: Offer an incentive like entry in a prize drawing to everyone who responds; people won’t believe they can win if they give a low score.
  • Skewing the sample - Make sure the surveys go only to people who are happy or are friends. This is “easiest where a transaction is taking place by phone, and the script requires the employee to ask whether the customer is willing to take a survey,” says FitzGerald. “Simply omit to ask the unhappy ones.” Send online surveys to customers who have just ordered a new product, not to those whom you’re hounding to pay a late bill.
  • Ballot stuffing - “A telecom provider had retail stores where they were getting feedback via SMS,” says Bain’s Rob Markey. “The customer’s phone number was captured by the point-of-sale system, and the text message was sent at the end of the customer visit. Some employees figured out they could temporarily change the customer’s number to their own number, give themselves a 10, then change the number back.”