The B2B Value of the Net Promoter Score

August 21, 2018 | Joanna Motrunecs
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Do you love our company? It’s what every business wants to know if they honestly care about providing a great experience for their customers. And nowadays, we’re used to email surveys, app rating requests, and receipts saying, “Give us your feedback.” But finding the right time, place, and way to pose that question—and get truly helpful responses from clients about their experience—is the clincher. Enter . . . the Net Promoter Score®.

Customer experience platform Medallia states, “The Net Promoter Score (or NPS) is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. It is used as a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand.”

Introduced via a Harvard Business Review article titled “One Number You Need to Grow” by Fred Reichheld, this metric has changed customer loyalty measurements drastically since 2003. Reichheld and his team explored companies’ abilities to draw return business or satisfy customers, eventually developing their research into a single loyalty question that provides the most significant and valuable data about customer experience.

 “One question was best for most industries. “How likely is it that you would recommend [company X] to a friend or colleague?”

 The Net Promoter Score concept is simple, really. It’s a score tabulated based on a customer survey response—where a business lets a client voice whether they are happy enough with a company experience to recommend this service, site, business, brand, or app to a friend.

A LITTLE CALCULATING . . . VERY LITTLE

To find an NPS, customer survey results are scored—the answers tabulated  become a rating of loyalty to the business. To keep it simple, Reichheld says, go with only the one question about recommending the company, using a 0 to 10 scale—from “not at all likely to recommend” to “extremely likely to recommend.”

Then, results are sorted into three groups: detractors, passives, and promoters.

Detractors are scores of 6 or less, indicating that the customers are unimpressed with or don’t like what they experienced, won’t visit or buy again from the company, wouldn’t recommend the business to a friend, and in general, have a negative reaction toward the company.

Passives—scores of 7 or 8—indicate the customer might recommend or might not, could switch loyalty arbitrarily, isn’t attached to the products or services of that company, or is neutral.

Promoters are those giving the question a 9 or 10 to show they love the company, want what the business has to offer, are satisfied with what they’re getting, and most importantly, are willing to tell others they should buy here. They’re enthusiastic.

The concept is referred to as a Net Promoter Score—indicating an equation:

# of Promoters – # of Detractors ÷ number of responders x 100 = the NPS

The resultant NPS is a number ranging from -100 (100% detractors) to 100 (100% promoters).

WHY WE LOVE NPS

The beauty of the NPS is twofold: To begin with, it’s basic—simple to read and understand (good for the customer), and a metric that is sharable and comprehendible (also good for the business). One question. One resultant descriptive number.

And second, the NPS is tremendously useful as a business health indicator and as a motivator for employee advancement and improvement. Behavior change within any business starts with data. Customer experience-based info is the perfect launching point for action and greater company success. The NPS correlates directly with business health, growth, and potential.

BUT WHAT ABOUT B2B CUSTOMER LOYALTY?

Essentially, everything stated so far about Net Promoter Scores works for B2B companies as well, with a few minor adjustments. It’s still about building loyalty.

A first difference is that B2B tends to talk clients and contracts instead of customers. In B2B, a company is working hard on both the retention of contracts , and on the procurement of new clients.

Second, the scale of B2B NPS work is different—the number of clients is usually far fewer. But B2B companies should look at this as a positive—a smaller number of clients to engage with, which typically transfers to a greater and faster survey response percentage.

Third, tailoring engagement perfectly for B2B clients might look a little different. When and how to contact them could still look like an email survey, but because of the difference in scale, B2B companies have more contact options.

LOYALTY IS RELATIONSHIPS

When a B2B organization considers implementing a NPS as part of their growth strategy, they’re placing value on locating promoters. What is the value of a promoter? And why invest time in finding them and keeping them?  Reichheld’s Bain & Company states that promoters are worth time because they’ll buy more, stay longer, and refer often. And this is gold for the B2B market. Offer what the B2B market wants, and you’ll create a promoter culture.

"Promoters are worth time because they’ll buy more, stay longer, and refer often."

Simplification. Don’t complicate. Keep it basic and transparent—your products, prices, process—and that client is yours.

Growth. Bring your client business—actual economic profit—and you’ll up the loyalty factor big time. Mutual backscratching draws support.

Opportunity. Are you listening to your clients? Giving them the chance to be heard, to voice feedback about your business, makes them want to stay. 

Relationship. If they can’t trust you, they’ll find someone they can. Look at each client as a potential lifelong friend and interact like that’s what they are.

It’s that last one—the relationship between business and client in the B2B market—that’s challenging many manufacturers or service providers today. Bain offers this insight:

“In a recent survey . . . of 290 executives in B2B industries throughout 11 countries, 68% of respondents said customers are less loyal than they used to be. B2B companies thus need to go beyond mere satisfaction to earn customers' enthusiasm and loyalty so that they can improve the business's economics.”

If B2B companies can capitalize on the smaller scale and invest in the connections they already have with clients, they’re set up for loyal promoters. Retently makes the point that:

“Great B2B companies revolve around teamwork, both between your team members and your team and its clients. . . . As a result of this, it’s far easier to generate high quality, actionable feedback from B2B customers than from B2C. After all, you’re not a stranger to them—instead, you’re a trusted partner with a real working relationship.”

Define the key points existent in the relationship you have with the client—products they need and want, price points that work for them and for you, deliverables that are timely, and above all, a relationship that says, “Our company follows through on our promises and cares about what you receive from us.”

Using your business-client relationship as a base for examining B2B client loyalty, the customer experience team  at Falls Digital can steer your business in the right direction—helping you seek and document client feedback, tabulate NPS® for your B2B context, assess company health, and then act to build brand advocates out of your current customer base. Let our experts examine your customers’ UX in order to gain actionable insights and develop a strategy with your business team.

Topics: Customer Obsession NPS

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