Net Promoter Score : Past, Present and … Africa!
Sep 06, 2018
It’s been fifteen years since my team at Satmetrix co-created the Net Promoter Score (NPS) with Fred Reichheld; fifteen years over which it has become the de-facto standard approach to measuring and managing customer experience. Hundreds of thousands of businesses, big and small, reaching across all the continents and over every business sector have made NPS a business revolution and have validated its underlying strength.
But as with many ideas that become “conventional wisdom” sometimes we lose track of where its real value comes from. For that reason alone, it’s worth reflecting on its history, to better understand what makes NPS work.
The search for a relevant measure of customer experience and loyalty started in the late 1990s, inspired by a conundrum. For most business leaders, the idea that delighting customers is good business is instinctive and obvious. At the same time, traditional ways of thinking about measuring that delight through customer satisfaction scores didn’t seem to support that case. Satisfied customers didn’t seem to reward their vendors with either superior growth or better profits. In fact, they had a habit of switching vendors whenever offered a better price. Perhaps customers were just price-driven mercenaries, always shopping for cheaper in a race to the bottom?
Dr Laura Brooks at Satmetrix led a data-driven research initiative that cracked the code. Customers would reward business for outstanding experiences, but satisfaction was too low a bar to identify what “outstanding” met. NPS was born out of data science; the statistical relationship between customers likelihood to recommend a product or service, and the growth of the enterprise. The lights went on: the connection became real.
Harvard Business Review published a seminal article, written by Fred Reichheld, in December 2003. It caught fire. Large, respected businesses like General Electric went on the record, talking about the power of both the idea and impact on their business. We started a conference series and CEOs of great companies like Zappos and Virgin Media showed up to share their beliefs and successes. 20 conferences later, over 500 companies had sent their leadership to our events to learn, share and enthuse. A site we launched to track industry activity quickly found over 20,000 business subscribers and built a community of deeply committed professionals who brought NPS to their businesses and shared best practices and inspiration. This was big.
The case studies of radical transformation started appearing. My personal favorite of the time was Virgin Media, a newly formed consumer telco in the UK; consolidating multiple companies that all had very poor NPS into a single entity whose performance, perhaps not surprisingly, didn’t improve with integration. A new, resolute management team made NPS a centerpiece of their business strategy. Performance improvement was remarkable: over a 5 year period NPS improved 28 points, customer engagement 19 points and the stock price went from the equivalent of $5 to $50.
A big idea for sure, but not enough, yet. If NPS was a powerful concept, it wasn’t a how-to guide. For a business to fully realize the value of the approach, it became clear we needed to help people develop best practices, put in place processes, understand the state of the art. We needed a LOT more. We needed to go back to our role as thought leaders and write the next chapter.
If NPS was a statistical insight, what came next was a business process revolution. In 2009 we published “Answering the Ultimate Question” as the “how-to guide” for the customer experience program leader and built a professional certification course around the content. The book went far beyond the statistics into the business operations and transformative nature of NPS and finally made NPS a prescriptive approach to customer experience.
A book is frozen in time, but the certification program could be an ever-evolving source of best practice, case studies, and knowledge. Over 6,000 companies sent their best and brightest to learn, share and be inspired. And the certification program has stayed current all these years, with the latest version the “NPS Masterclass” bringing NPS into the digital age. As the business world evolves, NPS state of the art evolves with it.
Which brings me to Africa, both figuratively and literally. NPS might be relatively new in Africa, but our timing could not be better. African economies are growing rapidly, and business leaders are eager, not just for financial performance, but for the opportunity to learn best practices and build on solid foundations. At the first-ever NPS Masterclass in Nairobi on December 2017, I spoke to one business leader who said “Africa is ready for this. We are ready for this. We will take what worked elsewhere, make it uniquely African, and make it better” Harness the best ideas that have proven out around the world. Accelerate learning curves. African businesses can not just learn from around the world, they can do it better.
There is an energy and enthusiasm that powers business adventure in Africa. Entrepreneurship has deep roots and corporate cultures are harnessing the energy of employees to build fabulous endeavors. NPS doesn’t just provide a methodology for customer success, it engages all the employees of the business in a common cause, a cause to create something great for the customers of their enterprise and for themselves. An opportunity to share in the rewards of delighting customers. What could be more African than that?
Rolling out NPS across Africa, starting with Kenya and Nigeria, is an exciting next step for me, personally, and in my next post, I’ll be looking at the scale of the opportunity NPS has for Africa, as well as how I came to meet and collaborate with one of the continent’s leading figures in the customer feedback sector, Kenfield Griffith Ph.D., of mSurvey.
The second part of my story on how NPS, and I, ventured into Africa, is coming up soon.