Sales leaders have at least one thing in common: The challenge of keeping track of their sales teams’ performance.
Many blogs have been written about sales metrics or sales KPIs offering sales managers advice about which metrics they should be leveraging to address this challenge. In this article, I will cover one of the metrics I have specialized in; the net promoter score.
Firms use KPIs or key performance indicators to track the performance of their business, teams, or people against goals. Blogspot mentions net promoter score or NPS as one of those key sales metrics. You can use NPS to measure how likely it is that your customers will recommend your products or services to somebody else.
This metric is of particular interest as it explains the customer’s perspective rather than merely the sales figures. The salespeople who are competitive might oversell a product and make promises that the product may not fulfill in terms of functionality or features. Of course it can be because of pressure as the salesperson must meet his/her sales quota. Whatever the case may be, NPS can serve as an important metric to assess the customer’s satisfaction with the service or product the firm offers. However, this does not mean that a negative score is solely because of the person who sold or delivered the product. Rather, it could very well be that the product itself is not what the customer expected.
How it works is that you simply ask your customers to give you a rating from 0-10 where 10 means that they are very likely to give you a recommendation and 0, well I think you guessed it. There are three categories that survey participants fall into:
- Promoters (9-10): This is your best friend and is very likely to be a returning customer and won’t hesitate to refer others to your company.
- Passives (7-8): This is a satisified but not necessarily a loyal customer. They will likely buy from your competitors if the opportunity is right.
- Detractors (0-6): This customer doesn’t really like you. Detractors will look elsewhere to do their business in the future and might tell others to avoid doing business with you. People in this category may have a negative impact on your brand.
Sometimes the survey also includes an open-ended question asking the respondent what is the primary reason behind the score given. This question is often a conditional one meaning that it only appears if the customer gives below a certain threshold, such as below 7 (detractor).
So what about the timing and frequency of these surveys? My answer is: it depends. For example, one of my former clients, a car dealer, sent an NPS survey to everyone who did a test drive or bought a car. Some experts might say that if it is a new customer you shouldn’t send out a survey immediately. This opinion might have some truth to it but it really depends on the products or services being offered. The frequency is important because when the dealer sold many cars to one customer, e.g. car rental, it did not want to bombard the customer with multiple surveys. In those cases, the dealer decided only to send one every month. I would recommend sending an NPS survey every three-to-six months to recurring customers. Sending a survey invite less frequently to those types of customers will increase the probability that they will answer your survey, thereby improving your response rate.
You can find out your net promoter score by subtracting the percentage of detractors from the percentage of promoters. I have used Power BI to automatically calculate these scores, associating them with sales teams and salespeople.
If you intend to use NPS for your firm, or if you would like to apply it to other areas of your business, I have written blog posts about how simple it is (or can be) to implement it from a technical perspective. So don’t wait to start leveraging this important metric in order to improve your customer service and sales performance.
Feel free to leave your thoughts and experiences about using and implementing NPS for your organization.