Net Promoter’s Promoter on What Works

Though many have made careers out of calculating the relative power of a brand, perhaps it really comes down to just one simple question: Would you recommend this brand to a friend? Compute that on a scale of one to 10 and weigh advocates against detractors and you have a Net Promoter score, an idea advanced by Satmetrix and Fred Reichheld’s 2006 book The Ultimate Question. A new book by Richard Owen, the CEO of Satmetrix, takes the idea further with advice on how to improve your NetPromoter score. Owen cites some real-life examples like Lego and Symantec in the book in an effort to show how this simple metric can bring results. Owen recently spoke via e-mail with Brandweek about the book. Here are some excerpts of that conversation.

Brandweek: Net Promoter seems pretty straightforward. Why did you write Answering The Ultimate Question?
Richard Owen: The new book is a follow-up to Fred Reichheld’s 2006 best-seller, The Ultimate Question, in which he introduced the Net Promoter Score that my company co-developed with him. Since the release of the book, most of the attention has been on the metric/score (Promoters minus Detractors) because of its intuitive nature and its correlation to revenue growth.

However, thinking about Net Promoter as only a score trivializes the transformational effort required by companies to see real benefits. A metric by itself is only as good as what you do to change it. Therefore, my colleague and co-author of the book, Dr. Laura Brooks, and I wrote this book with the intent of providing a practical how-to guide to improve the customer experience and increase loyalty using Net Promoter. We were fortunate to be able to speak with and examine more than eighty organizations that have successfully implemented Net Promoter to identify these best practices.

BW: What are some of those best practices?
RO: In the book we introduce the Net Promoter Operating Model, which is what I like to call a checklist of six critical components that companies need to have to increase customer loyalty. We go into greater detail and share real-life examples about each element in the book, but from a 30,000-foot view they are:
• Customer-Centric DNA–creating a customer-first culture where every employee understands his/her role and is given the tools to deliver superior customer experiences.
• Enterprise Roadmap—gaining an enterprise view of the customer experience across all touch points.
• Trustworthy Data—capturing accurate, relevant and reliable ‘voice of the customer’ data.
• Root Cause Analysis—analyzing the data to understand the drivers of loyalty and prioritize actions.
• Action & Accountability—implementing closed-loop processes that empower employees to act on customer feedback and improve results.
• Innovation & Transformation—continued innovation of the customer experience to create competitive differentiation, increase loyalty and activate positive word of mouth.

BW: What can businesses hope to gain from a successful Net Promoter program?
RO: They can retain and grow loyal customers and increase growth. This is especially important in a down turned market because organizations can’t rely on acquiring new customers as a means for growth. By implementing a successful Net Promoter program, business will create more loyal customers who are more likely to purchase their product/service again as well as attract new customers through their positive recommendations (i.e. word of mouth).

Attaching a dollar amount to all of this is something we have been studying quite a bit lately across multiple industries using what we call the Net Promoter WOM Economic Framework, which determines total customer value based on buyer and referral economics. Buyer economics refers to how much a customer spends over a given period of time, while referral economics refers to the amount of new business that is gained or lost as a function of what the customer shares with others.