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Reputation Management - Using NPS to Measure Marketplace Sentiment

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Neal Lappe   by Neal Lappe September 30, 2013

A while back my team of some really awesome people got together to figure out what our "mission" in life was for our company. Sure, we're in the business of creating and developing successful online marketing plans for our clients but is that really the purpose of our business. So, I started to do some studying and research and came across my friend, Peter Drucker. Well, Peter and I don't have a personal relationship but I do respect him although he doesn't know me from Adam. Drucker states that the purpose of any business is to "create customers", and that struck a cord in me. After all, if a business doesn't have customers than it's not much of a business. And, if a business wants to grow and succeed, it needs to constantly "create new customers". All makes sense.

The next natural question, a question that any business asks at some point in time, is "how do we create customers". In my meeting with the awesome people I work with, we decided that in the business services arena in which we operate, referrals is an effective way to create "warm" leads and new customers. We do other things to market and promote the company but have found that referrals from our existing customers have fueled our growth for the past 8 years. Then the challenge became - "how do we get more referrals from the marketplace"? My research continued and I came across the concepts of "raving fans" and using Net Promoter Score (NPS) to evaluate how we are doing. By the end of the meeting with my team, we decided that our mission in business is to "create raving fans" and we were going to use NPS to track how we are doing. If you want to learn more about NPS, go to my favorite search engine (Google) and type in "net promoter score". It is very popular - you'll find tons of info about it.

Our "raving fans" program included contracting with a market research company to call our customers. (Note - if you are one of our customers and haven't been contacted at least once in the last 90 days, please let me know.) During the survey calls we ask the infamous question - "how likely are you to refer us to someone seeking our kinds of services?" That's the primary question to ask when using NPS to measure your reputation in the marketplace.

If you are unfamiliar with NPS, here's how it works. You ask the "would you recommend" question based on a scale of 1 to 10 with 10 being the most likely. Ratings of 9's and 10's are considered "promoters". They are actively promoting your business and saying good things about you when someone is asking about the services you provide. Rating's of 7's and 8's are considered "neutrals". They neither promote you nor "trash" you. They are simply neutral when it comes to they way they think about you. Ratings of 6 or below are considered "detractors". These are people who for whatever reason don't think highly of you and when in a conversation about your services will likely discourage others from working with you. To get your final NPS rating, you simply deduct the % of "detractors" from the percentage of "promoters". For example, if the % of "promoters" to your total survey results is 60% and the % of "detractors" to your total survey results is 20%, then your NPS is 40. The reason NPS is so popular, and the reason we have adopted it as our metric for measuring our reputation in the marketplace is because studies have proven a high correlation between NPS and business growth/success. It does make sense.

Not to boast, our NPS is high in the business sector in which we operate and our business is growing. Even though we focus on the online space to market our customers' businesses, word-of-mouth reputation in the marketplace continues to be one of the most important elements of any marketing plan. If you are seeking a way to measure your word-of-mouth reputation, check out the NPS concept. Good luck.

 


 

Neal Lappe leads the WebStrategies team of digital marketing experts. Under his direction, the company has flourished, growing more than 400% since its inception in 2004.

 

Topics: Reputation Management, Client Relations, Online Marketing

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