How is Your Business Really Doing? – Part 2

How is your business really doing was the subject of my last blog. In the article, I discussed the challenge of determining if your service technicians are really delivering a Proactive Service® experience by bringing ideas to your customers that will help them be better off. If you recall, I suggested that you consider two questions to ask your customers:

1. “Do our technicians bring you ideas that help you operate more effectively?”
2. “Do you feel that you are better off for having known us?”

If you are interested in tracking your progress over time or compare branch operations for these questions, for example, I would like to suggest a scoring key that will help you. In his article in the Harvard Business Review, “The One Number You Need to Grow”¹ , Frederick Reichheld introduces us to his research into the one question that he found was a good predictor of customer loyalty and growth. The question was “How likely would you recommend [company X] to a friend or colleague?”  He introduces a scoring key that provides a “net promoter” score.   The “net promoter” component comes from the fact that Reichheld’s scoring key considers not only the percentage of responders who rated the company highly (promoters) and who would likely promote the company (i.e. recommend to friends and colleagues), but also the percentage of responders who would rate the company poorly and likely speak negatively about their experience (detractors). By subtracting the percentage of “detractors” from the percentage of “promoters”, Reichheld ends up with a “net promoter score” that can be compared from branch to branch, period to period, etc.

The scoring key works like this. Respondents apply the score that best represents their view of the service provided on a rating scale of 1 to 10 (with “10” being high). Scores of “9” or “10” are considered “promoters”. Scores of “6” or lower are considered “detractors”. Reichheld subtracts the percentage of detractors from the percentage of promoters. (Note that those respondents that score a “7” or “8” are not included in the calculation since it is believed that they do not have strong enough feelings to either promote or detract).

Here is an example of how to calculate the net promoter score:

• Percentage of respondents who gave scores of “9” or “10” = 45%
• Percentage of respondents who gave scores of “6” or less = 20%
• Net promoter score = 45% – 20% = 25%.

You can improve your score by increasing the percentage of respondents with “9” or “10”, decreasing the percentage of respondents with “6” or less or a combination of both. It is this “net promoter score” that can then be used to measure how the business is performing at a specific point in time and enable you to compare the score to other time periods or other branches, etc.

My point here is that this scoring key can be useful to apply to these two questions about the quality of the Proactive Service® experience you are providing. It will clearly identify the percentage of respondents who will speak positively about you and potentially become “ambassadors” for your company as well as the percentage of those who will speak negatively about you. This helps you focus on both ends of the satisfaction spectrum and focus on minimizing the percentage of “detractors” while maximizing the percentage of “promoters”.

You may also want to check out Reichheld’s article and include his question in your customer satisfaction surveys.

I’d love your feedback! And as always, please feel free to leave a link back to your own blog if you have one via the commentluv feature here on the site. If you are reading this blog post via email, you will need to locate this post on my website by clicking here. Scroll down to the bottom of the page where you will find the comment section.

Jim

“Measure what is measurable, and make measurable what is not so.”

– Galileo Galilei

________________________

¹“The One Number You Need to Grow”, Frederick F. Reichheld, Harvard Business Review, December 2003.