The title of this blog should not be “Have you implemented NPS” it should be “when did you implement NPS and what value have you seen from it”.
Today I was reading the blogs on the Net Promoter website and came across this post that I thought was worth sharing as it illustrates the powerful value to be gained by implementing NPS.
I have long made the argument that we all should be using NPS in our managed services business and publishing best practices as a way to know our core business is healthy, we are driving growth, and customers are remaining loyal.
The example below is a powerful story of how Charles Schwab used NPS to turn their business around from a negative NPS to a positive NPS and how that was a good predictor of their future growth.
We measure NPS for our clients after every interaction, onsite or remote, as well as through a survey each month to our main contacts and all end users. I am happy to report that as a company we have just reached our goal of a 67% NPS across all divisions. I also am happy to let you know, and may even be bragging a bit here, that our score for our remote team – services that are not onsite – has averaged 89%.
I hope this article help drive home the importance of this metric in your business and you in turn make it a priority to implement.
Josh
I spoke at the Forrester Financial Services Conference in New York City this past summer. It was a particular pleasure for me because I also got a chance to hear Walt Bettinger, Charles Schwab’s new CEO, describe how his firm utilized Net Promoter in its remarkable turnaround.
I had already heard pieces of the story from a variety of sources. Schwab began describing its client loyalty strategy and reporting its Net Promoter results to stock market analysts several years ago, and the press had picked up on what the company was doing. But this was the first time I had heard the entire story told in a public setting. Walt reviewed the dark days of 2004-2005, when he was president of Schwab’s retail business. Schwab was losing share. Its economics were collapsing. Pundits were predicting that the firm would not survive as an independent. Chairman and founder Chuck Schwab felt compelled to replace his CEO and personally lead the turnaround effort. The company’s Net Promoter Score at this time was negative 35%!
In its 2006 annual report, Schwab described how loyalty formed a cornerstone of its philosophy: “We want individual investors to feel so good about their investing outcomes—and their entire experience with Schwab—that they recommend us to their friends and family.” Walking the talk, Schwab’s leaders developed a reliable monthly NPS for each branch and began holding branch mangers accountable for their ranking. Bettinger himself personally interviewed scores of detractors and defectors to understand the root causes of their unhappiness. He insisted that bad profits (in the form of infuriating account fees) be eliminated over the next 24 months. Schwab became a founding member of our NPS Loyalty Forum and augmented these quarterly best-practice sessions with a series of internal conferences on NPS called Schwab-fests. The company integrated NPS into employee training. It created an employee engagement/loyalty process with NPS. The list goes on and on.
The results are impressive. By the summer of 2007, Schwab’s NPS had improved by more than 50 points to +23%. Its stock price surged, and it became a growth company once again (revenue had dropped at a compound annual rate of 5% between 2000 and 2004). If anyone has heard of another turnaround of such impressive dimensions, I hope they will leave a response after this blog entry.
