Get that good word of mouth to spread

What do e-commerce players such as Snapdeal, Flipkart and CaratLane have in common? All of them are early adopters of Fred Reichheld’s Net Promoter Score (NPS). A powerful measure of customer loyalty, NPS, first promoted by Bain & Company (detailed in The Ultimate Question 2.0 ) is now finding favour with several Indian companies, though a bit late.

It’s a welcome trend for today’s social media-centric customer world, where brand evangelism and peer recommendations are easy, instant and potentially multimedia. Brands need to have a strategy for measuring and growing this customer base of brand evangelists. This is where NPS provides a process to track how many genuine brand advocates (or what they call promoters) your brand has nurtured over time.

How does NPS work & why is it a good metric to run with, in today’s customer-driven world?

It’s simple Companies exist to solve a consumer problem and service consumer needs. If that is indeed the case, then we need to keep assessing whether we are really enriching the lives of our consumers.

NPS can be calculated by capturing responses to just one single question (ultimate question) using a 0-10 scale: How likely is it that you would recommend [brand] to a friend or colleague? No wonder NPS is simple to administer, decode and apply.

While advertising and promotions can get you through the AIDA funnel, real user and peer testimonials get you much faster conversions. NPS nails this thought process of brand evangelism as its core by further classifying consumers as Promoters (those rating 9 or 10), Passives (rating 7 or 8) and Detractors (rating 6 or below) based on the response (see Exhibit 1: NPS Calculator).

NPS can be easily tracked at periodic intervals to assess the impact of customer initiatives and daily improvements and is a single customer metric like the easy-to-track financial measure net profit.

It’s different from customer satisfaction. Really?

One of the dilemmas for firms is to make a choice between running with an existing customer satisfaction (CSAT) survey or move to NPS. Both CSAT and NPS have clear advantages, but they really do different jobs, so it is important to articulate your objectives first.

CSAT is typically based on a number of critical attributes that affect user satisfaction. It is focused on capturing attitudes and perceptions for a company or product brand for all these critical attributes. It is detailed and helps in fine-tuning different aspects of the offer. In contrast, NPS is based on just that single question which measures customer loyalty, a forward-looking measure which predicts likelihood to recommend the brand to others. NPS describes behaviour of a consumer in the context of repeat purchase and recommendation and is helpful for devising strategies for different consumer groups. For instance, with a large base of Promoters, you can upsell and charge a premium.

NPS is actionable Any measure alone won’t give you diagnostics about why your customers are detractors or promoters.

Architects of NPS recommend just one or two follow-up questions:

What was the primary reason for the score you just gave us?

What is the most important improvement that would make you more likely to recommend us?

This helps the organisation focus on what works with Promoters and how to get Detractors and Passives to move up.

Apple Retail is one of the NPS champions that has incorporated it to be a part of its daily operation at all its exclusive stores, which deliver a unique and consistent experience.

Employees of an Apple store know their individual NPS, where they stand relative to peers and where their store stacks up relative to stores in the region. Store staff is encouraged to share their net promoter feedback and implement improvements in their daily reviews.

No wonder it has an overall NPS of 70 per cent!

Superior brand engagement We know that measurement is just the beginning. Collect feedback, understand consumer voices, patterns and fine-tune the offerings! Indeed, the real value is not in asking the question or determining a score, the real value is in taking action based on the powerful insights which it throws up.

While you measure NPS and quantify your promoters, it is almost critical to be adopting tools for social listening to track conversations about your brands in real time. Imagine your Promoters and Detractors talking on Twitter and Facebook. Visualise the power of one Detractor to tarnish the image of a brand versus that of a Promoter, who can build authentic and valuable peer recommendations.

The real-time conversations about your brand need real time social listening and sustained engagement. We now see a number of brands combining their NPS measurements with social listening tools to gauge real-time consumer sentiment. These tools essentially allow brands to manage and monitor conversations, respond to customers in real time, generate sales leads, obtain competitive intelligence and understand industry trends. Social listening is perhaps most useful in predicting and possibly managing a crisis in the making and nurturing better engagement.

Let us look at some live examples. As mentioned before, Apple has been an early adopter of NPS, but it came late to the table regarding its belief and investment in social listening. However, recently it experienced the power of social listening. Apple was rolling out a music service with a three-month free trial. It turned out that Apple had planned to not account for any payment to artists during the trial period. However, well known song artist Taylor Swift posted an open message on Twitter to Tim Cook, expressing surprise that the otherwise “historically progressive and generous company” was taking this “shocking and disappointing” path.

The online storm that this created amongst both Apple and Swift’s fan base forced Apple to change its mind and swiftly close the loop. Hours after the note went up, Apple announced that it would be paying artists during the free period. This was announced by responding personally to Swift’s message. It was an important lesson for a brand like Apple, who chose to listen and act. Closer home, Maggi, in spite of a huge base of Promoters, wasn’t so responsive to the negative conversations that had begun regarding its product when it failed quality tests. In fact, the brand went into radio silence mode, including a ten-day disappearance (and lot of automated responses lacking the human touch) allowing for speculation that indeed, the company had something to hide. Lesson in contrasts on how to listen and respond to your promoters!

The way forward for any brand is to deploy the NPS metric and add skill sets of social listening and engagement that inspire more and more consumers to be your brand evangelists. This is an imperative in today’s world of digital social connections.

Mona Rai and Vinati Dev are Brand Strategy and Strategic Communication Consultants.

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