How to improve your NPS strategically?

You might have heard this from almost all successful leaders that you need to be customer obsessed. In the digital age, when information discovery is almost free and effortless, you can not get this wrong. So it is clear you need to be customer centric or even obsessed to grow or even sustain. But I have rarely seen any piece of article that talks about "How" do you really become customer centric and how to strategically and continuously improve NPS. In this article, I will share my views on the "How".

Recently I wrote an article on why you should care about NPS. I received a few questions from readers, most prominent of them were - how do you measure NPS accurately and how do you really improve it. Excellent questions! If you have reached till this point, you are already on the amazing journey of becoming more customer centric. In this article I will share my views on these two topics.

While interviewing people around what is your most treasured experience while using a product or service, I saw broadly two types of people. One who talk about big company like Apple and Amazon. These people primarily talked about technology and then about design and delightful customer service. The second set of people (surprisingly majority) talked about an interaction with a small business like a niche restaurant. These people just got lost in their memories with almost at the verge of breaking into tears when recalling the incidence. How do small business do that? What makes them so good at creating experiences. Answer is actually simple - they know their customer personally so they go beyond the script to delight the customers. The big question is - can you achieve this at scale. And answer probably is yes with the help of data, analytics and a customer centric mindset.

Fictional story to get message across

Lets go back to the small business and try to understand how do they really do this with an example.

Mr. John runs a french restaurant called Le Monde. He inherited this legacy restaurant that sat in middle of lush green gardens and promised full organic tasty food to customers. Recently, few of his customers started complaining about food being too spicy. However, foreigners/first timers liked the new taste very much. Empowered by John, all waiters take great care of customers who don't like food by changing the dish and giving complementary mouth watering desserts. Complaints grow and Mr. John realizes that he needs to investigate. He checks the recipe which has not changed for centuries but the spice brand the chefs use changed recently which has a slightly stronger taste. John fixes the brand but keeps the new recipe for foreigners. Complaints vanish and John is a happy man again.

So how did John identify and fix the underlying customer pain point? First, he has a mechanism to hear customers. Second, he closes the loop at every level -

• Front-line - By empowering waiter to make exception to recover bad experience
• Mid Management - By identifying broader theme of problem, spice brand in this case
• Leadership level - By introducing a deviation for foreigner (customized offering)

But, how do you take this approach at scale? You need a mechanism and a culture reinforced by both leadership communication and employee behavior. But before you start building a mechanism, you need a metric to help you understand where you are and what you need to become. Enters NPS! So how do you make sure you are looking at the right NPS.

How to get your NPS right?

NPS is as good as the fairness in sample selection you follow. NPS has a pretty standard question - would you recommend us to friends and family. But you can induce a bias in multiple ways. To avoid these biases, you need to know where do they come from.

1. Sample bias - Whom you ask changes everything. If a store manager gives survey to only those whom he finds happy, you obviously would overestimate the score. Hence, you need a command on who fills the survey. It is important to select a sample that is a good proxy of your target population. This is the population you would like to sit on your books and hence these are the customers you would like to delight.
2. Customer fear - If customer thinks his feedback can be used against them, you will never get feedback that would make you better.
3. Perception of non-actionability - If customer thinks his/her feedback won't be used for any good, they would not think through before giving you a rating and might inflate your scores.
4. Influence - I often hear customer service agents pushing to give a 9 or 10 on the call or in the store. This is almost equivalent to bribery to corrupt the scores.
5. Low Response rate - If you have less than 20% customer responding to survey, you won't get a true reflection of score. Most of non-respondents are passive or detractors who did not even care to open you email or text. Hence, NPS needs to adjusted for non-responders assumed to be passive or detractors.

You need to think of anything that might bias the scores in any direction. A true score can give a lot of insights to improve while a misrepresented score can give you a false confidence that you are already doing enough. Few suggestions to remove bias - let a third party do survey for you to avoid customer fear, match the profile of respondents to your portfolio to validate any sample bias, train your representative that influence is unethical and won't be tolerated, let the customer know that you would really work on gap areas, make response rate a KPI similar to NPS itself etc.

How is NPS implemented in your organization? Do you think it currently estimates the score fairly? Do you have both top-down and bottoms-up NPS? How do you select who to survey to get your NPS score? Use the comment box to respond.

How to build a well oiled organization to continuously improve your NPS

Improving NPS takes more than a few initiatives. It is a long journey of transformation, complete shift of mindset and customer specific capabilities. I have mixed a few sources together to create the perfect machine to close the loop with customers. One key ingredient is a Gartners report on Nice Customer experience maturity model.

1. Automated Voice of Customer - You need a tool that can tell you what customers don't like. Sounds easy right? Wrong, very few companies really have the orb they need. You need to acquire feedback at the right time. Say you order an Uber, the cab arrives late, the car smells, the driver drives well, gets you to your destination in time and you enjoy the luxury of just leaving the car without paying in cash. An hour later you get a message to rate the service, and you feel it is 6/10 because of all goods and bads combined. But this average score losses so many insightful information. What if you had a mechanism to get feedback at each point including beginning, during and after the trip. Hence, it is firstly important to capture feedback at all sensitive points in customer journey. Next, you need to have all the feedback data coming to a single data warehouse where you can mix it with other data sources to create insights. Finally, you need dashboarding and analytics layer to create insights. This whole system would serve you as a fortune teller orb to get all the answers.
2. Quantify value of unit gain on NPS - How much does one point improvement in NPS translate to additional NPV. If you are on a mission to create a customer centric organization, the one question you would need to answer is what do we do to compensate for the lost revenue from the customer oriented decision. There would obviously be use cases which are win-win for customer and the company but more often you might have a zero sum game for short term or even a short term negative revenue project. What you need is a tool to quantify how much of real value you create by improving NPS. This would give you the power to assess every decision how much of real value you create if you go the customer way. To evaluate the financial gain for NPS you need to think about everything - additional retention for promoters, referral save of acquisition cost, referral stronger life time value, higher up-sell or x-sell index for promoters etc.
3. Build a customer centric culture - Culture is an umbrella term for so many things. Ultimately it means your people show behaviors that take decisions in favor of customer - always! It also means your employee are happy with what they do which makes them happy to spread the happiness. You need an Agile organization that can quickly respond to customer need and organize around customers. You need people who are inspired by leadership who always think about customer - are obsessed with customers like Amazon. Everyone in the organization has access to NPS, understand what it means and how they impact the score personally. Few of the tool you can consider to get all these in place - eNPS, SAFe, clear communication from leadership, empower employees to go beyond script, etc.
4. Design Customer Experience - You need to carefully design the customer experience. For this you would need to map customer journeys at least what 80-90% go through. Analyze what process irritate your customer, what can you automate or optimize, where can you use data & AI to be more proactive, how can you be more transparent to build trust with customers, map personas to understand individual customer rather than portfolio as a whole.
5. Manage the Customer Experience - Once you have all the right ingredients, you now need to maintain the processes, culture, people and technology. For this you would need KPI scorecard, a Governance structure and people who would own and be accountable for the KPIs. Try to be as granular as possible so that you can diagnose any break in the well oiled machine you have built. Also, try to use predictive models to be more proactive than react to customer feedback.

Sign Off

Creating a system that lives and breathes NPS and become more and more customer centric over time, is a continuous and a long journey. So buckle up for this marathon and start building the foundation as soon as you can. Its not necessary that you are the CEO to take the first step. If you are someone who loves to build real value for customer, if you want your business to sustain - you should start from yourself and influence others.

Do share your thoughts on the thoughts I shared in this article in the comment box below. If you have shifted your firm to be more customer centric - I would love to know what were your learning.