Net Promoter Score -- A Case Study

November 02, 2010

Posted by BMA Colorado. Published in Press Releases

Net Promoter Score

by Josh Levy, CBC, Marketing Director at Kinsley

Editor’s Note: If knowledge is power, then Net Promoter Score (NPS) just might be the mightiest weapon in your arsenal.The following article was published in the Fall 2010 issue of the Executive Memo, the quarterly newsletter of the Colorado Society of Association Executives and republished by Kinsley Meetings. Although specifically written with an association audience in mind, there are real insights for B2B companies.

What if asking one simple question could determine your association’s health and its future? Would you be interested in knowing the answer? That’s the premise and the power behind Net Promoter Score®.

The use of NPS has become prevalent in the corporate world. In fact, a recent study by the Temkin Group suggests that 4 of 10 companies are using it. And of those companies using NPS, 65% think that it has had a positive impact on their company. No wonder that more and more associations are taking a closer look.

One new believer is Joan Tezak, CAE, CMP, Executive Director of the Colorado Society of Association Executives. “In the past, I haven’t put a lot of merit in evaluations. People don’t like filling out surveys and so much critical information is missing. But NPS takes this to a whole new level (because) it’s based on good statistics and real feedback that I can use.”

What is Net Promoter Score?

NPS is a member loyalty metric developed by Fred Reichheld of Bain & Company. In his book, The Ultimate Question: Driving Good Profits and True Growth, Reichheld suggests that your association’s members can be divided into three buckets: Promoters, Passives and Detractors.

  1. Promoters are loyal enthusiasts who keep renewing their membership and help your growth by referring others.
  2. Passives are satisfied but unenthusiastic members who are vulnerable to leaving.
  3. Detractors are unhappy members who are not only at risk of quitting your organization, but can damage your brand and impede your growth through negative word of mouth.

This makes sense. But how do you know which members are which? It’s easy…you ask them.

Segment your membership into these three groups by asking them one simple question — “How likely are you to recommend [Association X] to a colleague or friend?” – and then by allowing them to respond on a 0-to-10 point rating scale. Based on their responses, members are categorized as follows: Promoters (9-10), Passives (7-8) and Detractors (0-6).

To calculate your Net Promoter Score, take the percentage of members who are Promoters and subtract the percentage who are Detractors.

NPS-outlines

An organization can raise its score by creating more Promoters and by minimizing the number Detractors. But it’s important to note that NPS is much more than a score.

“(NPS) is an excellent barometer for understanding the quality of the relationships that a professional organization has with its members,” says John Abraham, General Manager of Net Promoter Programs at Satmetrix. “It probes the question of why members recommend, which gives an excellent measure of what it takes to grow organically through word-of-mouth. But what is most important for any association is not the score, but the process for embedding the voice of the customer into the organization’s culture, to better understand what it takes to add personal value for each member and motivate them to promote the organization’s mission.”

In short, NPS is an opportunity to engage in a dialog with your membership to solicit actionable ways of increasing their satisfaction. For this reason, organizations are encouraged to follow the NPS question on surveys with an open-ended request for elaboration, soliciting the reasons for their rating. These reasons can then be shared with the appropriate stakeholders for follow-up action.

NPS case study: BMA Colorado

Here’s an actual example of how NPS was recently launched and is currently being used by a Colorado association.

The Business Marketing Association (BMA) is the pre-eminent service organization for business-to-business marketing professionals, dedicated to education, training and professional development. It enjoys a solid national presence with 22 chapters and 2,100 members across the country. BMA Colorado has long been recognized as one of the association’s leading chapters thanks to strong member satisfaction, financial stability and a reputation for innovation.

In mid-2009, however, it was clear that business was anything but usual. Troubling economic conditions were stalling new member growth and beginning to affect renewal rates. Plus, the marketing profession as a whole was undergoing a rapid, dramatic evolution due to technological advances (e.g., social media). With money getting tighter and membership levels less certain, BMA Colorado needed solid information to make strategic decisions on a number of fronts. It had so many questions, but too few answers. What educational programs should be offered? How do members want to receive ongoing communications? Have the big drivers of member value changed?

BMA Colorado had historically conducted comprehensive member satisfaction surveys every 3 to 4 years. It was a lengthy, involved process to create, fulfill and analyze the survey. And while this always provided great information, it quickly became dated. “With the continuous change facing our industry, we needed a better way of getting a more timely understanding of member sentiment,” said Marilee Yorchak, CAE, Executive Director at BMA Colorado.

Keeping this information gap in mind, BMA Colorado made two big changes:

  1. It replaced paper surveys with online surveys for all program evaluations.
  2. It began measuring NPS for its membership on a quarterly basis.

Online Program Evaluations

Moving to online post-event surveys was a big step in the right direction. BMA Colorado hosts over 35 events each year, ranging from 100+ person keynote dinners to 15-20 attendee roundtable discussions. Direct feedback from these events is critical to shaping future programming. There was legitimate concern about moving away from paper-based evaluations. Would people take time to fill out an online evaluation send by email?

It took some effort to design the online assessment and to refine the process for emailing the survey invitations…but the end results were worth it. Response rates climbed substantially. Many respondents included rich verbatim comments. Collecting, tabulating and sharing results with board members (and speakers) – which was previously a labor-intensive, onerous process – was suddenly a snap. Most importantly, BMA Colorado had timely feedback on members’ program satisfaction.

Quarterly NPS Measurement

With online program surveys underway, BMA Colorado next turned its focus toward adopting NPS. While the entire board was supportive, there remained a number of strategic and tactical decisions on how to move forward. How frequently to measure it? Should program evaluations be integrated into the NPS calculation? Who will responsible for measuring NPS on an ongoing basis?

BMA Colorado chose to measure NPS on a quarterly basis. Frequent enough to keep a pulse on member satisfaction while not overly taxing the organization’s volunteer staff. Every three months, a satisfaction survey is sent to a quarter of the member base. That way, each member is only surveyed once a year but the association receives directionally correct data more frequently. Responses from the quarterly satisfaction survey are combined with program surveys to yield a quarterly NPS.

To manage the NPS measurement process going forward, BMA Colorado recently added a position to its board: Intelligence Chair. This volunteer is charged with fulfilling all surveys and analyzing the ensuing results. While still a relatively new venture for BMA Colorado, the use of NPS is already having a positive impact. “NPS provides our board with a metric that everyone can easily understand and rally around,” says Yorchak. By comparing the responses of Promoters to Detractors, BMA Colorado has already found clues on how to impact member satisfaction.

Their NPS program has also captured the attention of BMA members across the country. Many other chapters, as well as the national organization, are considering their own NPS initiative based on BMA Colorado’s continued success.

How to get started?

Does launching an NPS program for your association sound daunting? It shouldn’t. The truth is you will be surprised at how easy it comes. Here are a few suggestions to help you get started:

Begin your personal NPS education. There are numerous resources available to build your own knowledge on NPS. I suggest reading (or at least skimming) Fred Reichheld’s book, The Ultimate Question: Driving Good Profits and True Growth. It’s written from a corporate perspective but remains applicable to the association world. Next, check out the Net Promoter website (www.netpromoter.com) which is a wealth of free information.

  1. Find a trusted advisor. It’s always easier to dive into the unknown with someone who’s already been there. Ask around and you’ll probably find someone within your network with NPS experience. If not, join a Net Promoter Score forum online, reach out to John Abraham at Satmetrix (the ultimate expert) or give me a call.
  2. Develop an online survey capability. There are inexpensive tools available to move your current survey mechanisms online. Two of my favorites are SurveyMonkey and Zoomerang. Both are easy to use and can deliver powerful results.
  3. Commit to the KPI. If you are going to embark on an NPS journey, you’ll need your association’s key stakeholders on board. This is not a mere member satisfaction program. Measuring your NPS does not lead to success. It needs to be adopted as one of your organization’s Key Performance Indicators (KPI).

References

  1. Net Promoter®, Net Promoter Score® and NPS® are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.
  2. Reichheld, Fred. The Ultimate Question: Driving Good Profits and True Growth, Harvard Business School Press, 2006.
  3. Temkin, Bruce. Survey Shows Strong Customer Experience Ambitions, Customer Experience Matters blog. May 24, 2010.
  4. “Net Promoter”. Wikipedia.

About the Author

Josh Levy is the Marketing Director at Kinsley, a full service meetings and events management firm, where he is responsible for the company’s overall marketing communications and business development strategies. Levy has 15 years of marketing and sales management experience from leading hospitality, manufacturing and distribution organizations. He serves as the president-elect for BMA Colorado and volunteer teaches with Junior Achievement. Contact him at www.kinsleymeetings.com.

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