Solve360 Scores in Loyalty Test
Fred Reichheld, author of "The Ultimate Question, Driving Good Profits and True Growth" is building a legion of supporters for his approach to measuring customer satisfaction. The Economist refers to him as the "high priest" of loyalty; the New York Times declares, "[He] put loyalty economics on the map."
The CEO of American Express, Ken Chenault, says Reichheld is "at the forefront of helping organizations understand the importance of customer loyalty in driving performance. All companies should ask their customers what Fred calls 'the ultimate question'."
According to Reichheld, the ultimate question - Would you recommend us to a friend or colleague? - allows companies to track promoters and detractors and produces a clear measure of an organization's performance through its customers' eyes. The "Net Promoter Score" or NPS, is the percentage of customers whose answers identify them as promoters minus the percentage whose response indicates they are detractors.
According to information at the NPS site, the average firm manages around a 5% to 10% score, while many well-known firms and some entire industries have negative Net Promoter Scores. Examples of high performers in the software and computer sectors are Intuit (58%) and Dell (50%). The chart below shows the NPS distribution of North American companies in all sectors.
As part of a recent broader customer survey, we asked our entire customer base the Ultimate Question: Would you recommend Solve360 to a colleague? Users could choose between 'Yes', 'No' and 'Never Thought About It'. For the purpose of calculating our NPS, we counted only the Yes responses as promoters, and the No and Never Thought About it answers as detractors. Based on responses from the 80.2 percent of our users that completed the survey, our NPS is 48.4. Below are the results in more detail:
Would you recommend Solve360 to a colleague?
Yes 74.2 % No 5.2 % Never thought about it 20.6 % NPS Calculation Percent promoters 74.2 % Percent detractors 25.8 % NPS score (74.2% minus 25.8%) 48.4
While our score is much higher than the average 5%-10% and compares well to some of the high-performing firms Reichheld singles out in his book, we believe that another dynamic is working in our favor. In the business SaaS (Software as a Service) arena where users pay subscription fees, there is no "performance grey zone" from a customer's perspective. Either a service has the features and functionality an organization requires, and performs close to flawlessly, or it doesn't. If it doesn't, users won't stay; conversely, the right tools reliably delivered creates loyal, satisfied customers. We've spent a lot of time and energy understanding our customers' needs, and have created a purpose-built application and delivery infrastructure to fulfill those needs. Aside from the public IP network and the Web browser (both of which are manageable variables), we control every aspect of our users' experience. More than 74% think we're doing it well enough that they'd recommend Solve360 to their colleagues. Our challenge going forward is to understand what it will take to turn the detractors into promoters.
Net Promoter is a registered trademark of Satmetrix Systems, Inc., Bain & Company and Fred Reichheld.
