Over the last 15 years many businesses have spent enormous amounts of money implementing shiny new customer relationship management (CRM) systems. These investments will very likely have been justified on the basis of improved sales effectiveness or improved forecasting or higher call centre productivity – the business cases will have been many and varied. The practical reality is that relatively few projects will have delivered the ROI that the business first said it was looking for – let alone an improvement in the only measure that matters – customer satisfaction.
Customer satisfaction used to be a nebulous concept. No longer. NPS makes it very real by expressing it in terms of a customer’s propensity to recommend. If you are not familiar…
To derive your NPS score you ask your customers a simple, very relevant question. "How likely are you to recommend us to a friend/colleague/relative?".
A score of 0 would suggest that, on balance, your customers are neither a help nor a hindrance to you. They don’t recommend your business, nor do they badmouth it. A score of -100 would indicate that every customer is telling other businesses about their bad experience. A score of +100 would suggest that every customer is proactively recommending you. NPS is a customer loyalty metric that predicts the likelihood of a customer repurchasing from you or referring your company to a friend. Pioneered by Fred Reichheld, (Bain and Co.) NPS was introduced in 2003, Net Promoter Scores can range from as low as –100 (when every customer is a Detractor) to as high as 100 (when every customer is a Promoter). Real world scores lie somewhere in between 10 and 90, Benchmarks vary by country/culture – US scores are typically higher that European. They also vary by industry – B2B vs B2C.
How TSG Help
Whatever other objectives you might have for a CRM project we believe that your business case should first be defined in terms of improving NPS. Before you can define what improvement, you want to drive you have to have a baseline from which to work. If you’d like help assessing your NPS we’d be delighted to share our experience. We’re fanatical about it.
Our NPS is 90. The benchmark for UK IT service providers is 62. If you would like to find out why our customers rate us so highly – we would be delighted to serve.
