The Net Promoter Score
For those who count on satisfaction surveys to measure performance, they are a waste, says renowned business strategist Fred Reichheld. “Glowing customer satisfaction surveys don’t correlate tightly with profits or growth,” he said. “Most senior executives, board members, and investors don’t take them very seriously.” If Reichheld’s name is familiar to any readers, it’s because he developed the Net Promoter Score. This is a loyalty model he developed from his consulting work at Enterprise Rent-A-Car.
Enterprise, the rental car company, seemingly came out of nowhere to rise to the top of the rental car industry. The company surpassed long dueling rivals Avis and Hertz. When Reichheld began working with Enterprise, he stumbled on their interesting approach to growing their business.
He discovered company executives put their energies into deconstructing positive customer experiences, and sharing those lessons with managers across its retail stores. Managers were required to survey returning customers, asking whether they would recommend Enterprise to family and friends. Meanwhile, of those who responded positively, store managers wrote up the details of their experience and forwarded them to management. Then, they discarded all of the other customer responses — by the way.
This practice, involving just one survey question and discarding answers that didn’t measure highly, had to have come across as a bit odd. So, Reichheld, a researcher, looked to try and correlate this method to gaining loyal customers. Therefore, he spent years, he writes, researching and experimenting to solve the riddle. Ultimately, it led to creating what he considered the next best approach: a survey question and a scoring method. He called it Net Promoter Score, now referred to simply as NPS.
Enterprise executives singularly focused on discovering customers’ positive experiences and deconstructing them for lessons to share across the company’s stores. Furthermore, Enterprise surveyed customers when they returned the cars, asking them if they would recommend Enterprise to others. Then, managers sorted through the responses looking for those who said they would. They tossed all the other responses away.
As Enterprise vaulted to the top of the rental market, Reichheld wanted to see whether there was a correlation between its market growth and the company’s approach to positive experiences. Finally, after research studies and further testing, Reichheld conceived the Net Promoter Score, or NPS which helps determines who are brand loyalists and most-likely to recommend the service to others.
Consider the aspects that make these users loyal and you may even be able to construct more relevant personas based off these characteristics. Read more about the background to personas.