What’s your score?

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As business owners, we know there are countless metrics and measures that we can look at to get a feel for how our business is performing. For most of us, our tendency is to fixate on our financial results (of course, why wouldn’t we?). While financial results are certainly critical to knowing the health of our business, financials are also largely backward looking. At Indium we focus on a different metric to understand how we are doing and if we can expect growth: our Net Promoter Score.

What’s Net Promoter Score

Net Promoter Score (NPS) is a management tool that can be used to gauge the loyalty of a firm’s customer relationships. It serves as an alternative to traditional customer satisfaction research. NPS has been widely adopted with more than two thirds of Fortune 1000 companies now using NPS. (https://en.wikipedia.org/wiki/Net_Promoter).

It’s likely that most of us have received a customer satisfaction survey, and have been asked to answer this question:

How likely is it that you would recommend our company/product/service to a friend or colleague?

That question is known as “the ultimate question” (from the best selling book “The Ultimate Question: Driving Good Profits and True Growth“) and based on an answer scale of 0 to 10, provides us a measure that is a leading indicator for growth and customer loyalty. It also creates an immediate feedback loop between company and customers.

How it works

The Net Promoter Score is a result of the “net” of “promoters” and “detractors”, based on the 0 to 10 answer scale provided with the question. Simply put:

  • Customers who answer with a “9” or “10” are “Promoters”. These are loyal enthusiasts who will keep buying and refer others, fueling growth.
  • Customers who answer with a “7” or “8” are “Passives”. These are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
  • Customers who answer with a “0” through “6” are “Detractors”. These and are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

To derive your NPS, simply subtract the percentage of Detractors from the percentage of Promoters, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter). “Passives” don’t count.

For example, if you receive 100 responses to your NPS survey, and 50 customers answer a “9” or “10”, 40 customers answer a “7” or “8” and 10 customers answer 0-6, your NPS is +40%.

  • 50% Promoters (50 out of 100) – 10% Detractors (10 out of 100) = 40% NPS

In addition to obtaining the NPS score itself, the NPS survey also provides the respondent the opportunity to provide the reason for why they gave the company the score they did. It is in this feedback that a company learns what is working and what is not, which enables timely action to course correct and engage with your customers throughout the process.

What it’s meant to Indium

When we initially measured our NPS score two years ago, we had a NPS of -12%. This meant we had a higher percentage of customers going out of their way to say negative things about us than we had customers willing to say positive things about us. Yikes! With NPS being a leading indicator of growth, this was a very insightful result for us. But the “magic” if you will is not in the score itself, it’s in the insights that our customers gave us (“Can you tell us why you gave us the score you did?”) and our accountability to take action accordingly that makes the difference.

What we learned was that we had three areas of opportunity:

  • Improve Communication – we were not communicating in a timely (nor accurately) fashion with our agency partners
  • Set Expectations – we were not setting clear expectations for our agency partners throughout our servicing processes
  • Improve Service – the quality of our service was not acceptable to our agency partners

We immediately took action, starting with informing our agency partners that this is what we heard from them, and outlined the actions we were going to take as a result. We then engaged our entire team, every role in every function, to address these opportunities. Through a high level of accountability and collaboration, the team at Indium established service level standards for our main customer-facing business processes, which set both internal expectations as well as allowed us to set expectations with our agency partners. This also revealed the need for process improvement, as well as much-needed technology investments to better enable our team to provide the highest level of service for our agency partners.

With all that, we established our brand promise – being “proactive, attentive, responsive.”, which is what our agency partners can now expect from us in every interaction.

As a result, we have improved our NPS score from a -12 to a +1! That’s a 13 point improvement, which by any standard is great progress! And as NPS is a leading indicator of growth, this is a great sign for the direction we are heading in. This latest NPS survey that yielded that result also reflected the following feedback from our agency partners:

  • Continue to focus on being proactive, attentive and responsive more consistently – which we’ve already begun efforts to focus on our “moments of truth” and establishing internal standards and best practices to ensure consistency in every interaction
  • Improve our speed to quote – which we are doing through automation efforts
  • Focus on being more consultative with our agents – which we will be introducing more consultative services later this year to help our agency partners grow

Our goal now is to achieve a NPS score of 50 or better in 5 years. And we’ll do so by continuing to engage our agency partners with the NPS survey and the opportunity to provide us feedback on how we are doing.

Grow your agency with NPS!

Now that our agency partners have seen what managing to an NPS result has done for us, we are being asked if we can help implement a NPS tool and process for them. Ask and you shall receive. We are currently working on both training and technology solutions for NPS that we will be delivering for our agency partners in the fourth quarter of this year to help them get an edge through the use of NPS.

Stay tuned!