“It’s an age-old question: How do you know if a consultant is any good? Maybe the best way to gauge their success would be by asking how many people want them back. That’s where the Net Promoter Score (NPS) comes in.”
Do you want to know how your consulting firm stacks up against the competition? You can easily find out with a Net Promoter Score (NPS). The more advocates and promoters your company has, the higher its overall score will be. A strong score can help increase customer retention rates and make it easier for new prospects to trust what you have to offer them.
This post will discuss the NPS, why it is essential to measure this score, and provide strategies for improving your NPS.
1. What is a Net Promoter Score, and why should I care
The Net Promoter Score (NPS) is a customer loyalty metric that measures the satisfaction level of your customers and how likely they are to recommend you.
Fred Reichheld introduced the NPS in 2003, and it has since been adopted as an industry standard for measuring customer satisfaction. It asks customers to rank their likelihood of recommending the business on a scale from 0 (not at all likely) to 10 (extremely likely).
The NPS ranges from -100 (everybody hates you) to 100 (everyone loves you). A score of 50 or higher indicates that most people are thrilled with your service.
2. How to calculate your NPS score
You calculate your NPS by taking the percentage of your customers who would recommend you (9 and 10) and subtracting from it the percentage of detractors (those who would not – 6 and below).
You can also use the following equation to calculate your Net Promoter Score:
Net Promoter Score = %Promoters – %Detractors
Let’s imagine that out of 100 customers, 90 said they would definitely recommend you while only five people said that they wouldn’t. So, applying this formula in our previous example, we get NPS=(90-05)=85; then, your final NPS score will be 85.
Watch out! There might be some cultural or industry elements to the calculation of the NPS.
- For instance, in Europe, many people happy with your services might give you a 7 or an 8. It places them in the neutral zone. As a consequence, if you have limited Promoters, some Detractors, and the majority of your customers in the neutral zone, you might end up with a score close to zero. It might look dreadful but remember that the range goes from -100 to 100.
- Conversely, Latin American respondents might be more prone to a higher score. They might also be super optimistic about the competition. Everything is relative, after all.
- Some industries like retail and consumer goods tend to have higher NPS scores (40 on average) than services providers (15 on average). For example, having a 25 NPS score puts you above the competition if you’re a TV provider. What matters is not to have the best NPS in the world but to be better than your competition.
Even though there might be some bias linked to the profile of your customer base, we can estimate that your customer mix is relatively stable over time. Consequently, regularly measuring your NPS will provide you with an internal benchmark and very insightful trends on how you are doing with your customers.
To learn more about how to calculate the NPS score, check out this post here!
3. Why do you need an NPS program
The biggest reason you need an NPS program is that it will help your company grow and scale. A high Net Promoter Score can be a valuable asset. In addition, an NPS program is a fantastic way of forecasting the direction your company will take in the future. If you are looking for leading indicators, it is indeed a sound input.
You can use it to track customer satisfaction on an ongoing basis and benchmark against other companies in similar industries. That being said, there are some caveats about using just one number when measuring customer loyalty because not everyone responds positively to this type of survey question format.
Suppose you have increased positive customer responses after taking actions based on their feedback or implementing new marketing campaigns/strategies. In that case, these actions are likely to help your bottom line, at least indirectly. However, if they aren’t providing any value for money either by increasing sales figures or reducing cost per sale, why keep doing them?
4. The benefits of having a strong NPS program
The benefits of having a strong NPS program are manifold.
Secure customer relationships
First of all, you will measure your performance over time and identify trends in customer satisfaction. By doing so, you can take corrective action rapidly if required – the sooner, the better, as they say!
Customer Loyalty is one of the most difficult metrics to measure in consulting. In the end, the best measure ends up being the number of business consultants get from an account. But when the relationship is going south, revenues start drying, and it is often too late to take corrective actions.
With a proper performance management system, you can capture weak signals and take preventive actions in due time. Don’t forget that retaining existing clients is always cheaper than acquiring new ones, so every little bit counts.
Surface new opportunities
Second, it makes sense financially speaking because happy customers are more likely to buy again from you or refer others on top of that, which is even better for business growth.
You can include in your survey some open questions regarding their future needs for next year and follow-up. You can also set up debriefing sessions and improvement plans that will be touchpoints leading to potential opportunities.
Implement Continuous Improvement
Finally, an actionable Net Promoter Score system gives birth to very focused team efforts to improve what needs improvement while celebrating wins achieved with measures taken across departments accordingly.
Maybe your expertise is deemed weak in a specific area. Perhaps your commercial approach is considered shallow. In some cases, you might have underestimated the desire from your clients for further knowledge transfer.
Is your pricing considered high as compared to the value you bring, or conversely, are your clients so happy with the pricing that you could consider charging more? Are some partners underperforming their peers? You could use this initiative as an opportunity to trigger personal improvement plans.
To learn more about the benefits of a great NPS score, check out this post here!
5. How to implement an NPS Program
The first step to implementing an NPS program is getting your team members’ and upper management’s buy-in. They need to understand the value of customer loyalty for your business, not only in terms of financial performance but also as a way to keep clients satisfied.
You can launch this initiative via a few different channels such as email, phone calls, or surveys (online or offline). With Conpulse, we have opted for online surveys, but some interviews can be performed on the phone depending on company preferences. Always take the time to write a personalized note to your clients before sending a survey. It will increase the odds of getting an answer.
In the first year, you will probably process much information since you have to go back one year in one go. After year one, you can move to a more continuous process where you survey clients once projects are completed. It will provide you with a real-time picture of the situation.
Once you’ve got all of this data, it will need to be processed and analyzed before any conclusions can be made and acted upon accordingly if necessary. Of course, the strength of your team will determine how long it takes until actionable insights are available, but within around two months, we would hope to see some results at least!
A key element in the process is debriefing with the clients. It is an opportunity to show that you care and that their opinion matters. Going through this debriefing can also be an opportunity to identify improvement opportunities on both sides and to move forward together. When the trust is strong, those meetings are a gold mine of new leads, as you can imagine.
6. Tips for improving your NPS score
Here are some tips on how to improve your NPS score by providing a better customer experience :
- Look at all the steps of the customer journey: Proposal, Commercial, Delivery, Transfer of knowledge, Follow-up. What are the strengths you need to build upon and the weaknesses to be fixed?
- Use the feedback to fuel your internal development program. For example, what is the expertise partners and principals should master? Are they there yet? How about interpersonal skills?
- Act quickly on early signals. The sooner you fix a deteriorating relationship, the better. You know how hard it is to reopen an account.
- Make sure that there are no language barriers because sometimes this can create misunderstandings between employees and clients, resulting in negative reviews. Use multilingual surveys if you can.
- Be transparent about the process of resolving problems with customers. Then, if you follow up, let them know that you will be in touch and when they can expect a resolution – This will help avoid any confusion or frustration!
- Last but not least, stay consistent. You have engaged on a journey to transform your customer relationship. Don’t drop the ball after a few months. When it comes to improvement, persistence is the key.
It’s not enough to just have satisfied customers. You need loyal ones too, and NPS can be a great way to keep them coming back for more time and again! With the help of an expert like us at Conpulse, you can quickly identify improvements in your company that will make your customer experience better than ever before. So contact us today to learn how to help you strengthen your business with happy customers who love to work with you!