Laura Brooks, VP Research & Consulting, Satmetrix

Is NPS Appropriate for Employee Loyalty?

Increasingly, I am asked whether Net Promoter is appropriate for employee surveys. The theory is that loyal employees create loyal customers, which in turn leads to financial benefits. Many people intuitively understand this connection. However, after many years in the employee research world, I realized the employee survey process ranks alongside performance reviews as an exercise in frustration (and futility) for all involved. Poorly run employee programs can have the same unfortunate results as poorly run customer programs – lack of executive engagement, line ownership, accountability, etc.

Building Value One Customer at a Time

I would like to take a moment to discuss where we've been with the Net Promoter research, and how it fits with the way companies are using and validating Net Promoter Score (NPS) in their businesses. There have been some critics from various corners of the market research world who are doing a poor job explaining what Net Promoter is about, and we recently received a request in the discussion forum to clarify our position -- especially for many of our community members who have not reviewed the original research.

Hitting the Bull’s-eye: Linking Your Net Promoter Metric to Personal and Corporate Goals

Setting performance targets is a great way to challenge your organization to improve. Setting specific goals that must be completed within an explicit timeframe, then linking these goals to compensation plans, motivates employees to continuously raise the bar on customer loyalty metrics.

It is all part of a cycle of continuous improvement. However, many organizations that are measuring and managing their Net Promoter scores wonder how to set up the correct targets. They know that setting aggressive targets will keep their organization focused on the top two or three areas that will directly impact that metric. But which targets are the right ones, and how do you execute a complete Net Promoter discipline so you hit the bull’s-eye on your Net Promoter scores?

To be meaningful, performance goals should be tied to specific dates and milestones so you can monitor your progress on the path to achieving desired customer loyalty levels. Most organizations set targets on an annual basis, with incremental values cast on a quarterly basis in parallel with standard business reporting deadlines. If this is your approach, make sure your sample sizes sufficiently represent baseline targets (especially for quarterly samples).

The Sound of Silence: Part 2 - Are Non-respondents Truly Detractors?

As we discussed in my last column, The Sound of Silence: Part 1 - Detecting the Signs, it is important to understand which types of customers you most want to hear from. To make sure you hear from them, define a role matrix for your business, which might include decision makers, purchase influencers and end users. Each of these groups plays a different role within your sales process. Before you can make sense of the difference between Promoters and Detractors, you need to know who’s who and how they influence your business. For B2B companies, these roles often represent distinct individuals with different viewpoints. For B2C businesses, several roles might be embodied in one respondent -- the consumer.

Let’s give some more thought to how to characterize roles as part of a typical segmentation model. The goal of customer segmentation is to group customers based on common needs so you can approach them with targeted solutions based upon those needs. I won’t get sidetracked discussing the importance of developing good customer segmentation models. In this example, we will assume that an appropriate segmentation framework has already been created.

The Sound of Silence: Part 1 - Detecting the Signs

Many of our customers ask me how they should treat non-respondents from their customer experience management (CEM) solutions. I call this the sound of silence. But how do you identify if that silence is meaningful to your business?

In the research world we often refer to this phenomenon as non-response bias. Some researchers have reported that people who respond to surveys answer questions differently than people who do not. All that is well and good, but we need to dive a little deeper. Classifying people in the business world (particularly within B2B businesses) as respondents vs. non-respondents is not quite granular enough because different types of individuals have different roles to play within your sales process. Clearly, Net Promoter Scores help you gauge your success and ultimately drive growth for your firm. But before you can make sense of the difference between Promoters and Detractors, you need to know who’s who and what type of influence they have on your business.

To understand why this is so important, I’d like to suggest a scenario, in three easy steps.