The Next Advance on Net Promoter Score

October 30, 2017

In 2006, Fred Reichheld wrote “The Ultimate Question,” a book that would go on to become a bestseller. Its core proposition — the importance of measuring and managing a metric he called the Net Promoter Score (NPS) — was quickly and widely adopted by major Fortune 500 and Global 2000 companies.

The book is about eliciting the customer’s perception of a company’s performance by asking them a simple question: “How likely are you to recommend this [brand] to a friend?” Respondents are asked to indicate the likelihood on a 0-10 scale.

NPS is an aggregate calculation of the percentage of customers who give high scores (9, 10) to this question minus the percentage of customers who give low ones (0-6). Subsequent research has indicated that NPS leaders in their industries typically outgrow their competitors by an average of more than two times.

The practice of measuring and managing NPS ushered in the rise of the customer experience (CX) management era — and the focus of top national companies on delivering exceptional customer service and experience.

CX in Practice: A Half-Solved Puzzle

While CX literature talks about well-designed, end-to-end customer journeys, in reality, CX programs have focused primarily on operational improvements based on customer feedback after service is delivered.

It’s true that doing right by customers eventually results in high NPS scores and is great for customer retention.

But do high NPS scores automatically lead to more net new customers? Can companies just assume that new customers will find them via word of mouth? And how do companies leverage their brand promoters to generate new business?

The answer lies not just in measuring customer perception, but in influencing it. And this is where Online Reputation Management (ORM) comes in.

From Mad Men to ORM

The same companies who now track NPS scores as part of corporate goal-setting still rely on traditional marketing approaches to acquire customers.

They spend a large part of their budgets on ads — whether physical (e.g., billboards, print) or digital (e.g., Google, Facebook) — to get more customers in the door.

But customer behavior has shifted. Now customers increasingly select businesses based on reviews and ratings on the web. Sixty-eight percent of millennials, for example, are completely unimpressed and unmoved by celebrity endorsements. Instead, the majority — 93 percent — look to consumer reviews for information before making a purchase.

Businesses with a strong online reputation (as evinced by high review ratings and review volume, which results in a high Reputation Score) get more customers through their doors in this new social-proof-driven economy — and at significantly lower cost.

One Big Three automotive manufacturer that uses Reputation.com, for instance, saw a 6-percent increase in sales after improving its Reputation Score.

Traditionally, marketing teams that need to create and maintain a strong online reputation have been separate from operational teams that are chartered with creating brand “promoters.”

This made sense as long as there wasn’t a clear way for promoters to directly improve a brand’s online reputation. But with ORM that’s no longer the case.

Unified Reputation Management

At Reputation.com we’ve spent years helping brands earn customer loyalty by continuously improving the customer experience, and driving new customers in the door by boosting brands’ online reputations. Our platform brings marketing, operations and senior leadership together to achieve this vision.

With the launch of our brand new survey capability, Reputation.com now offers the only complete, self-service, voice-of-the-customer solution delivering actionable insights to improve the customer experience, drive customer acquisition and increase revenue.

Learn more about the solution here, and check out our eBook on how to build surveys that yield actionable feedback.

 
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