Zane Safrit

Judging Employee Loyalty with Net Promoter Scores

I'm a huge fan of Fred Reichheld and his Net Promoter Score methodology for measuring customer loyalty and determining what's needed to build it.  The Net Promoter Score results from the very simple Ultimate Question Survey.

1) Would you recommend us to a friend?

2) On a scale of 0-10, with 10 being definitely and 0- being definitely would not, how would you rate your likelihood to recommend us to a friend or colleague?

3) What do you tell people about us?

You can see it gets right to the heart of customer loyalty. And it does so in a simple, effective, respectful, survey. I say respectful for the customer's side.  Those 85 question surveys...um...they communicate to your customers that their time isn't very valuable and that's why they have the time to answer your 85 questions. A 3-question survey communicates respect and encourages more open responses by allowing the customer to use their own words.

I've always thought NPS could be used to judge employee motivation, loyalty, engagement. They are the ultimate customers of a brand, a company. And, if your employees don't recommend working for their company to their friends and colleagues....what do your employees communicate to your customers?

Still, there's enough nuances in the relationship between employees and customers and the company that makes the translation for employees not so simple. And Dr. Laura Brooks from SatMetrix opened my eyes, in her post Is NPS Appropriate for Customer Loyalty to some of these conflicts

A. Conflict of Interest. An employee may see their job at risk from their responses.
B. Skewed or Contradictory Scores. Employees may also be more critical of their company. That doesn't mean they're less passionate or engaged with the brand.  In fact, it may indicate a very passionate, but frustrated, connection with their brand, their employer.

Still, employee loyalty is the engine driving customer loyalty. You either have both or neither, ultimately. And Dr. Brooks sums this up nicely at the end of her post:

These experiences are interconnected—and only by moving toward more customer-focused employee feedback will employee loyalty move out of the human resource function and into the core of the customer experience strategy.

If you're interested in Net Promoter Score and its use in your business (and you should be) then you should make their blog, fittingly named Net Promoter Score, a regular read.

Should customer loyalty score drive your compensation?

The best customer-loyalty metric is the Net Promoter Score. Fred Reichheld, its creator, asks if your NPS, or Net Promoter Scores, should drive your compensation.

I'm in the pro camp, obviously, especially with Net Promoter Score. Of course.

( Ultimately, every business uses customer loyalty to drive compensation. Really? Without customer loyalty, returning customers with repeat purchases, your business is either a ponzi-scam, an investment scam or out of business before you can reply to this post if you've even had time to read this post. )

Building on customer loyalty is the only foundation for a sustainable business. Your business grows to the extent you build on customer loyalty. NPS is one of the most, if not the most, accurate means to measure customer loyalty in a way that everyone in a company, from CFO's to customer service reps, can understand. So, yes, NPS should drive compensation.

The big concerns of the con camp Mr. Reichheld shares seems centered around the fear that employees would game the system. They would manipulate it somehow. Brow beat customers, beg 'em for a high score, threaten retribution unless...

If that's the concern, then it's not the fault of the Net Promoter Score's implementation. NPS won't change the corporate culture from one of trust and openness, to one of deceit and manipulation. If you have a corporate culture where gaming the system is a standard procedure...that's the issue, not the system you use to score customer loyalty. And for those who worry about employees gaming the system...I'd encourage you to look at the source of that fear and ask yourself why you think that or why your employees would be motivated for that.