In 2012, Client Savvy’s Client Feedback Tool began including the Net Promoter Score/Ultimate Question survey methodology as an option for our clients to use in their General Satisfaction feedback requests. Since then, our clients, with an average NPS score year-over-year of greater than 65, have continued to surpass the average NPS score for professional services firms (according to Forbes) of 58.
Here is a quick look at Net Promoter Score (NPS) and a discussion of how using NPS with Client Savvy’s feedback solution allows you to increase the likelihood of being referred by your clients.
Net Promoter Score Overview
Since 2003, the NPS customer satisfaction system has continued to grow as a popular and widely used management metric. According to research published by Bloomberg, over two-thirds of Fortune 1000 companies are using this metric. The founding principles of NPS can be found in Fred Reichheld’s book, The Ultimate Question. Reichheld lays out a methodology in which ONE QUESTION (the Ultimate Question) provides data highly predictive of growth and success. Based on extensive and sound research, NPS provides a simple, single metric by which to track your outcomes and progress. The basic question asked is:
How likely are you to refer us to a colleague?
The answer scale ranges from 0-10, very unlikely to very likely. The theory of NPS is that anyone answering 0-6 are detractors, people who will ultimately speak poorly of your company and services. Those responding with scores of 7 and 8 are passives, those who will likely neither promote or defame your company. Finally, the promoters are those providing scores of 9 and 10 – they are very likely to promote your organization to others.
Your Net Promoter Score (NPS) is the difference between promoters and detractors. For example, if you have 52% promoters and 18% detractors, your NPS is 34. Passives do not impact the NPS in either direction.
NPS can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent. Some of the traditionally ‘favorite’ companies receive NPS scores consistently in the 60%+ range (think Apple, Netflix, Amazon). Others, such as Comcast actually have negative Net Promoter Scores (more detractors than promoters).
You’ll find extensive research showing the correlation between revenue, profit, and market-share growth based on NPS. And while NPS provides a single, simple metric to show where your company currently is, the process of actually improving your NPS is much more nebulous.
Using Feedback to Improve NPS
Wait a minute. I thought NPS was feedback.
Yes, Net Promoter Score is a form of feedback. But NPS is limited to telling you where you are right now (and where you’ve been, once you have history). It doesn’t provide direct insight into how to actually get better. NPS is like a street sign. The sign indicates where you are – but you need the GPS to help you navigate to where you want to be.
The Ultimate Question typically includes a “part 2” – which is to ask, “Why did you give this score?” By harvesting this data, organizations can gain insights on what customer perceptions are trending. This may work well for very large data sets – and is well suited to Business to Customer measurements.
Professional services, on the other hand, are much more personal and interactive. You rarely have massive data sets to work with, and the value of each client is a much larger percentage of your net revenue. It’s therefore relevant to measure and track your delivery related to your clients’ expectations to receive clear, specific, and concise guidance on how to get better for each client. When you ask for this information at different milestones throughout your work with your client, you can do something about any gap in delivery versus expectations while there is still time to do something about it. Net Promoter Score becomes an additional question to ask at project completion, to identify how well you executed and created a potential promoter.
Used together, the Client Feedback Tool and Net Promoter Score gives you actionable data that allows you to continually increase your number of promoters. When using our software tool, the Net Promoter Question can be added to any survey on the fly when sending, enabled by default for selected templates (e.g., a Project Completion survey), or built into the survey template design when our team creates a custom template for you.
Activating on your promoters
Once you have identified your promoters, the next step is to help them give you the referral you want. Have you ever had a client tell you they would refer you and then nothing happens? We hear this all the time. Just because a client says they will refer you does not mean they know how to do so. Client Savvy has worked with our clients to both identify and activate on their promoters. Click here to download our step-by-step guide to Activating on Promoters.
Contact us at firstname.lastname@example.org and let us help you get started on increasing your number of promoters and getting the referrals you want.