The Balanced Scorecard can be a wealth of information, but most organizations can become perplexed about how to get meaningful measurements about customers and employees that gets beyond seeing them as revenue producers or drainers.
We approach this measurement with the Net Promoter Score (NPS) strategic goal. Whether you’re familiar with it or not, we guarantee you know of the companies that use it: Apple, Siemens, Phillips, Chick-Fil-A, USAA, Enterprise, Costco and this cross-industry list goes on and on. In Fred Reichheld’s most recent book “The Ultimate Question 2.0” he cites research that shows companies that use and guide decisions by using NPS information tend to grow at least twice the rate of their competitors.
The research presented in this book does a good job backing up many big claims: that customers that score companies high on the NPS 10-point scale will spend more, complain less and essentially will become a very effective and profitable “word-of-mouth” marketing force.
The crux of the NPS approach is that it measures the likelihood of customers to put their reputation on the line and recommend your organization to others. (Take our NPS survey about the newsletter.) Results are arranged into categories that make it easy to act upon the data. It’s intuitive enough for front line staff to understand, and insightful enough for executives to use for decision-making. Using NPS shouldn’t be mistaken for a walk down easy street though, or Wall Street for that matter.
Why? In putting your Net Promoter information to use, your quest for profits will also benefit the customers. This gets marginalized (ahem, AOL) or even ignored (hello the Enrons and Lehmans of the world) too often. We aren’t jumping on any Vulture Capitalists wagon here. We are just getting back to the Golden Rule. Treat others as you would like to be treated. Make a positive impact on those who chose to do business with you. And when your company’s outlets or employees get called on the carpet for not following this universal adage, get ready to battle defensiveness, because it’ll come. But fight the good fight, and you just might find your company and maybe even the environment beyond it a more fulfilling place to inhabit.
By earning the trust and respect of customers, companies move from being a flash in the pan to becoming valued members of their communities. Now that’s a balance that matters and one that we wholeheartedly believe will help keep your footing in turbulent times.