You know what’s hilarious about the world we live in?
(No, it’s not this guy, although he gets me every time.)
What’s funny to me is how often we as a society can find ways to overcomplicate things.
Think about that for a second....how often do we say, do, or think too much about something (or someone for that matter), and how often does the information we try and process affect our decision making? I think they call this "paralysis by analysis" - where we take in so many inputs that our thoughts, communication, and how we choose to allocate our time, money and attention all get thrown out of whack. What's worse, often times we do nothing and repeat the same patterns because there is so much information we can learn about ourselves, we don't know where to start to act on it.
While your heads are probably filling up with hundreds of
examples from the world of politics, academia, past relationships, or the mission statements of
most Fortune 500 companies – I was really interested to hear about a really simple concept that cuts
through all of that.
It’s called The Net Promoter Score.
From their website:
There is one question that provides the best predictor of customer loyalty
and for the vast majority of business:
"How likely is it that you would
recommend (Company X) to a friend or colleague?"
The "Net Promoter Score" or NPS, is simply the percentage of customers whose
answers identify them as promoters minus the percentage whose response indicates they are
detractors. Comparable to a financial net worth that takes the assets minus the liabilities,
NPS provides a customer net worth by subtracting the liabilities (detractors) from the
assets (promoters).
NPS provides the single most reliable indicator of a company's ability
to grow. Companies that have pioneered the use of this metric are way out ahead of their
competitors. In most industries, the Net Promoter leader has superior growth - averaging
more than twice the rate of their competition.
Three Categories of Customers
NPS is based on the fundamental perspective that every company's customers can be divided
into three categories. Customers can be categorized according to their answer to the Ultimate
Question based on a 0-to-10 point rating scale with "0" representing the extreme negative and
"10" representing the extreme positive end.
- Promoters (those who answer 9 or 10) are loyal enthusiasts who keep buying from a company and urge their friends to do the same.
- Passives (those who answer 7 or 8) are satisfied but unenthusiastic customers who can be easily wooed by the competition.
- Detractors (those who answer 0 through 6) are unhappy customers trapped in a bad relationship.
......
“Would you recommend
us to a friend or colleague?”
Now if a picture is worth a thousand words, then is the answer to
that question worth millions? Doesn't that tell you everything you need to know about your product,
service, or support, and don't you think that where you spend your time, money, and attention would be affected by what you find out from engaging in this exercise? This to me is one of those ideas that just seems so crazy and simple, that it just might work. But there is a ton of research on it, as well:
The Net Promoter Score’s website is here, along with links
to a book and the methodology behind it.
1) A job hunter
asking all his former employers:
2) A politician seeking reelection:
3) Even an ex girlfriend: "Would you recommend dating me to a friend or colleague?”
(I think you get the point)
How else do you think this one simple question can apply in your business or your lives?
