When Fred Reichheld introduced Net Promoter Score (NPS) a few years ago, many detractors debated his simple methodology. How could a single question build customer loyalty, retain employees, and ultimately grow your business?Today, hundreds of companies around the world have subscribed to the Net Promoter philosophy. But many of them still don't understand the true meaning of NPS and what Reichheld meant the question to become: an organizational discipline that transforms your business around the customers.
But according to Reichheld, too many people remain fixated on the scores, which impede NPS' true reach. "Maybe it was a mistake," he revealed at the Net Promoter conference on Monday in San Francisco. "The one place I'm deeply disappointed is the level of rigor I've seen here."
Reicheld admitted that companies cannot be driven by scores; it's what they do with the scores that matter most and getting the people in the organization to treat customers the way they'd want to be treated. "It's the Golden Rule that drives growth. When you get into the business world, you forget about it," he said.
The Ultimate Question, the one that started the Net Promoter phenomenon--"Would you recommend?" he admitted, does not determine promoters and detractors; it's the question "Why do you feel this way?" that determines real insight.
Until companies can move beyond getting their organizations to reach high Net Promoter scores, and help their CFOs to understand how to quantify and increase the number of promoters, then they won't find success with NPS.
Much of the challenge lies with the debate over whether to tie employees' compensation to the score, with the promoters saying the strategy helps to ingrain NPS into the culture. The detractors, on the other hand, say that plan distracts employees from providing good service because they work with blinders on, with that number all they can see.
This was the sentiment of many attendees I spoke to at the conference. One woman I spoke to who works at a financial services company said her issue is how to engage the field sales employees in how to use NPS. None of them seem to understand the importance of it, but she is reluctant to tie the scores to their bonuses for fear they will lose site of the customer.
Diana Dykstra, president and CEO of the San Francisco Fire Credit Union, said she's been incenting her employees since the start of the NPS program with 100 percent of her staff's incentives based on NPS. For management, 50 percent of incentive money is based on the company's overall NPS. "It's important and reinforces the culture," she said.
Laura DeSoto, senior vice president of strategic initiatives at Experian, is not convinced. Six years into Experian's NPS effort, the company decided only this year to tie incentives and bonuses to the number. "We have felt passionately that this would be dilutive to our efforts and gaming and other types of behaviors will come about," she said. DeSoto added that tying incentives to the number gets employees' attention, but unless a company's leadership can drive the strategy through the organization, she recommends against fixating on the number.
At Intuit, President and CEO Brad Smith, said it's about the ability to react to the moments of truth the NP surveys reveal. Since deploying NPS in 2003, Smith said his company has gone through many chapters of the customer journey. At first, "we were all over the score," he said. Now, Intuit has learned from its mistakes and currently is at a point where they're getting employees and customers together to drive innovation.
Part of that involves sharing the comments from Net Promoter with the employees and responding to their feedback. "For a company that is committed, it's about getting out of the way to do great things for customers. Our employees weren't hearing the feedback...so we got it to employees in real time so they can reinforce the positive...and adjust on the things that didn't go well," Smith said. "If we were actors and actresses and had to perform 360 days a year to an empty theater, it would be a detriment. We weren't letting them hear the applause."