Automotive Digital Marketing ProCom

Professional Community for Car Dealers, Automotive Marketers and Sales Managers

Loading... Be Patient!

Net Promoter: The Ultimate Question and the One Number You Need to Grow

If you are asking whether customers are satisfied with your service—you’re asking the wrong question.  If you are measuring and trying to increase your customer satisfaction—you’re measuring the wrong thing. Eighty percent of satisfied customers will still shop around to your competitors.  So don’t grow your number of satisfied customers. Grow your fan base.



Measuring your fan base is quite easy, and is determined by asking one simple question: “How likely is it that you would recommend this company to a friend or colleague?” This one question, when measured properly, offers a more accurate way of gauging customers’ real loyalty to a company, instead of mere satisfaction in the services it provides. Because really, what is the ultimate act of loyalty, but to place one’s reputation on the line and recommend a company to someone else?



Now that you’ve got the question, ask it of all your customers, every time they do business with you. Determine a simple, unambiguous scale so that managers can make customer loyalty a strategic goal.  Below is a scale developed by Fred Reichheld, author of numerous books on customer loyalty:

“On a scale of 1-10, how likely is it that you would recommend this company to a friend or colleague?

Extremely Likely

 

 

 

 

 

 

Not at all Likely

10

9

8

7

6

5

4

3

2

1

(Promoters)

(Passively Satisfied)

(Detractors)


According to Reichheld, “clustering customers into three categories—promoters, passively satisfied, and detractors (as noted above)—[provides] the simplest, most intuitive and best predictor of customer behavior; it also [makes] sense to frontline managers, who can relate to the goal of increasing the number of net promoters and reducing the number of detractors more readily than increasing the mean of their satisfaction index by one standard deviation.”



The real number you want to grow, however, is your Net Promoter Index. This is calculated by taking the percentage of your “Promoters”, and subtracting the number of “Detractors.”  For example, let’s say you surveyed 100 people. Forty answered the question above with a 9 or 10, thirty answered with a 7 or 8, and 30 answered with 1 through 6.  Here’s how you calculate your Net Promoter Index:

Promoters

40

Detractors

-30

Net Promoter Index

10%


Don’t be surprised if your score is lower than you expect. The median score for companies is just 16%.  The point is that now you have a baseline to improve your score. Start thinking of ways to foster fans of your organization, and implement with your staff and through your organization. Don’t forget to promote your organization, so your fans know how to promote you too.

Views: 688

Tags: Customer, Loyalty, Marketing, Net Promoter Score, group, re:member

Comment

Oops... You need to stop "Lurking" on ADM and become a more genuine Automotive Professional by completing your membership registration. As a registered ADM Member, you can post comments, publish your own articles (be a star!) and start Forum discussions. Stop being an online "Peeping Tom" and JOIN ADM RIGHT NOW!

Join Automotive Digital Marketing ProCom

Comment by Marc Bodner on March 27, 2012 at 6:30am

I agree, and worked in 2 Fortune 100 companies who used NPS as part of their overall customer experience/insight tracking.  It was a great tool and benchmarking system to score and view how well the operation was dealing with customers.

Hopefully we can meet at the conference and we can share a few examples of the benefits.

Comment by Paul N. Long on March 27, 2012 at 6:15am

Marc, you are right--this is just straight common sense.  So much so that Apple, eBay, Lego, Starbucks, Best Buy, Enterprise Rent-a-Car, Guitar Center, Zappos, and countless other successful companies utilize Net Promoter, and even place their aggregated Net Promoter Score on their Annual Reports! You better believe that BMW, Ford, GM, Toyota and other auto manufacturers are moving away from CSI to NPS too.  And it is so simple (and common sensical), that dealers can easily begin to implement NPS into their daily operations and processes.

Comment by Paul N. Long on March 27, 2012 at 6:10am

Thanks, Tom and J.D. I am planning on taking a pretty deep dive into Net Promoter at the Digital Dealer Conference during my seminar. I will be talking about the Behaviors of Loyal Customers, the Net Present Value of a Promoter vs. a Detractor, and how to implement Net Promoter as a discipline into your dealerships.

Comment by J.D. Rucker on March 22, 2012 at 11:02pm

Can't wait to hear about this at DD12, Paul. Good stuff!

Comment by Thomas A. Kelly on March 22, 2012 at 4:55am

Thanks Paul.

Comment by Paul N. Long on March 20, 2012 at 7:28am

Thanks, Marc!  Fred Reichheld would argue that the ultimately act of loyalty is a Net Promoter Score of a 9 or 10. In fact, Fred likes to cite the retired CEO of Harley Davidson, James L. Ziemer, who measures Harley's brand loyalty not by a score or revenue. They measure it by how many people have their logo tatooed to a body part!

Well, for the purposes of most companies, however, the true act of loyalty is when someone will place their reputation on the line and recommend an organization to a friend, family or colleague.

Comment by Marc Bodner on March 20, 2012 at 7:09am

This is great common sense, and customer experience 101 material.  Too much data, too many smart people trying to sell too many apps that complicate the situation, and too many poor attempts at getting to the real point.

Comment by David Johnson on March 19, 2012 at 2:22pm

Good, this is good stuff! I was really happy to see it here, as you can see mine didn't get a whole lot of play here, so when I saw this one I had to comment! LOL

Comment by Paul N. Long on March 19, 2012 at 2:21pm

Thanks, David.  It's also on the same track as your recent blog post Why Relationships Matter And ROI Doesn’t.  I will be speaking on this very subject at the 12th Digital Dealer Conference, where I will be taking a deeper dive for why this matters so much.  More to come!

Comment by David Johnson on March 19, 2012 at 2:10pm

Thank you for writing about this, I wrote a post almost a year ago about using the Net Promoter Score with Facebook to determine if your online community is willing to recommend you.

http://www.automotivedigitalmarketing.com/profiles/blogs/how-likely...

I feel that more dealerships need to be using something like this, it's a powerful indicator of promoters vs. detractors. Good read!

ADMPC is a Network for Car Dealers, Automotive Marketing, Advertising and Management Pros sharing Digital Strategies and Execution Tactics.

Please Consider Automotive Marketing Professional Community Sponsors

ADM Badge

Loading…

Based On Your Interests...

Automotive Marketing Tools

Get ADM Toolbar

Click here to take the ADM Member Survey

 

Google Automotive Network Targeted Placement Ads

Getting too many emails from ADM? Click mailbox below to control which types of alerts and updates you are sent......


Instagram

© 2014   Created by Ralph Paglia.

ADM Badges  |  Report an Issue  |  Terms of Service