Written by Jonas Malmberg, Founder and Owner, Quicksearch
Today, the market has accepted NPS® as an accepted method for measuring the relationship with customers and employees. Almost every company, large or small, sees NPS® as the most important asset to the business. Looking at Google searches, organic searches for NPS®-related terms have multiplied over the last few years. I've worked with surveys and feedback myself for over 20 years and never before have I heard so many say that NPS® is the most important leading indicator of success.
But why is there so much interest in NPS® right now? Apple and several successful companies have used the method almost religiously for almost a decade. A few years ago, most people believed that NPS® was a tool used only by the largest and most elite companies on the planet. Today it is not like that. The NPS® method is now available to companies of all sizes and in most industries.
So okay, let's go over why NPS® is such an important and successful method.
Well, first and possibly most important, NPS® has proven to be the most accurate and effective way to measure customer sentiment on an ongoing basis. There are plenty of models to analyze customer behavior, but NPS® is the only true way to uncomplicatedly look at loyalty continuously. At least in a way where you relatively easily get all customers to get involved and tell them what is most important. NPS® fits well in most situations and contexts.
The next important point is that NPS® focuses on the future. Classic customer surveys reflect the time that has passed. They only measure whether someone was satisfied with your product, service, service, etc. It tells you nothing about the customer's future intent. The most important information for the success of your business is what happens next. You need to know how customers (or employees for that matter) will behave in the future. Will they buy your product or service again? Will they recommend your company to a friend or colleague? Will they talk about your performance on their social media?
NPS® simplicity fits into everyday life. The method is of course used strategically, but the strength lies above all in the fact that it is operational. The process is continuous, short and simple for both the person who answers and the person who must act on the answers. The real value is generated by the result being fed back directly to the employee who can act on feedback directly every day. When small short surveys are continuously sent out around events, the employees have the energy to follow up every customer who has responded immediately when it happens.
So here comes the next point. NPS® is popular because it focuses on the specific customer in the moment – not just an analysis that provides overall insights about a group of individuals. And this really suits employees who want to improve. If an employee knows that customer x has a wish and a need, then there is usually the desire to satisfy these. With a bunch of bars and averages in a large anonymous report, this is much more difficult.
Above all, NPS® has proven to be an excellent way to create focus around the customer experience. Following the will to recommend is similar to following the reputation, i.e. what is said about us and our products. And that experience spreads quickly in today's transparent digital world. With NPS®, we can monitor our relationships and act quickly when something happens. If NPS is used widely in an organization, it naturally has a positive impact on our culture if there is an interest in being customer-oriented. But, of course, we don't understand that customer focus is something that is important today, well then we probably have a problem.
The technology actually also plays a central role in why the NPS® method has become so popular. Today, integrations between business systems and the feedback systems provide the opportunity to simplify and involve more data about each customer in the feedback process. The background data added to the analysis gives us more knowledge about the customer without having to ask (for example, what the customer bought, when, where and from whom. For example, financial data that shows how important the customer is in terms of turnover, profitability, etc.). Knowledge that gives us more opportunities to see more and get the opportunity to act correctly.
Finally, what is perhaps the most positive thing about NPS®, and most people miss. NPS® as a concept drives growth as we partly act on dissatisfied customers (which counteracts churn/customer loss) and perhaps most importantly, gives us the conditions to identify the ambassadors. They are ambassadors, also called promoters, (9s and 10s) who recommend us to others. When we find them, which may sound obvious, we can learn more about our strengths. We can try to do more of the things that create "wow", highlight the positive and dare to ask the ambassadors about their friends. And this is where the growth is, i.e. in the ambassador strategy combined with effective improvement work.
Used correctly, NPS® focuses on opportunities, which create positive spirals. With the right setup, NPS® focuses forward, on developing an ability to get to know and find ambassadors. Because your customers and employees are sitting there waiting for you to ask. They are willing to recommend and want to contribute tips and ideas on how to become better and more efficient. The challenge is to do it quickly and smartly, something we usually call The Quicksearch way.
