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Net Promoter is NOT a Customer Survey

Posted on August 27, 2010 , by Steve Bernstein
CATEGORIES: Lessons Learned

Net Promoter is so simple in explanation that it’s often confused with “customer surveys.”  The fact is that calculating a Net Promoter Score IS easy – just add the “Recommend” question to your existing customer surveys and you are on your way…right?
Of course we all know it’s not about the score:  how you use it to drive growth is most important.  Here are a few tips we’ve learned to help the process:

  1. Net Promoter isn’t market research, or even customer research.  Net Promoter is a segmentation strategy.
    Do you want to drive profitable growth? Actions, not surveys!

    Net Promoter isn’t a survey, it’s about action to drive growth

    Promoters nearly always spend more with you (have higher LTV Lifetime Value), not to mention they can be a valuable source of referrals (especially in B2B businesses!) and advice, and are generally less costly to serve.  If this isn’t the case in your business then you may be missing the boat.  Do you know what the typical sales are for your Promoter customers vs. your Detractors?
  2. Once you know which customers are “with you” and which are not, and when you are armed with simple customer sales and value arithmetic, you can define an action plan for working with them.  Engage your promoters (here’s a great B2B example) – they love you and want to buy more from you!   And, by the way, do you know what creates a promoter?
  3. Not to be priggish here but here’s a little secret:  the telephone seems to be the best piece of technology available for driving growth through this process.  It may not be sexy, but there’s nothing like individual customer dialogs.
  4. Don’t forget about “grey zone” – the customers NOT responding to your survey.  Especially for B2B businesses where you should have a reasonably strong relationships with your customers, you should target a response rate of AT LEAST 30%, and 50-60% and higher is a sign of a healthy business.  We almost always find that it’s actually REPONSE RATE that can be the best predictor of PROFITABLE growth rate increases (here’s one example of many many many).  It’s an evolution… good communications and relationship building will get you there over time.
  5. One final thought:  if you aren’t prepared to act on the Voice of the Customer then don’t send a survey.  Why are you surveying your customers in the first place if you’re not ready to do something?  Some will say they need to learn what’s needed and “sell” it to the executive team before you can commit to action.  But your customers shouldn’t be treated that way – don’t ask for their opinions unless you are ready to do something.  And related to item #3, perhaps you want to start with just a few telephone calls before diving into a large survey process that might not lead anywhere…

As the linked examples in this post illustrate, expect to get a DIRECT ROI of least 10x on your investment in customer insight work.  Otherwise I think I would generally advise doing something else.