Businesses often ponder the quandary of measuring customer satisfaction. The traditional survey is often long and tedious to fill out, leading to inaccurate results. Results often tilt towards the last interaction between a business and a customer, rather than the customer or member’s overall feelings towards the institution.
If the traditional customer satisfaction survey does not yield genuine results, then how can an institution accurately measure member satisfaction?
By asking one simple question, “How likely is it that you would recommend this credit union to a friend or colleague?” The response to this question became a Net Promoter® Score, which gives businesses insight into the satisfaction, loyalty, and evangelical spirit of their customers.
What is the Net Promoter® Score?
The Net Promoter® Score (NPS) is a metric developed by loyalty expert Fred Reichheld of Bain & Co. and Satmetrix that enables a company to measure its level of customer satisfaction. By asking members to answer the question using a scale of zero-to-ten, the credit union can separate their members into three categories in order to calculate their NPS. Analysis begins by identifying what percent of members fall in the following categories:
Promoter – The promoter is a loyal member who will frequent their credit union and enthusiastically recommend it to his or her friends. The promoter responds to the question with a rating of 9 or 10. These are the people that grow your business for you!
Passive – The passive is a member who is satisfied but not enthusiastic. While he or she is unlikely to speak badly about the credit union, he or she is just as unlikely to recommend the credit union to a friend or colleague. The passive responds to the question with a 7 or an 8.
Detractor – The detractor is the unhappy member who will spread the word about why he or she is unhappy with the credit union. The detractor responds to the question with a score ranging from 0 to 6. These are the people who damage your reputation and tarnish the value you have established in your marketplace.
Why does this work?
The NPS is calculated by subtracting the percentage of members who are detractors from the percentage of members who are promoters. The net result can be compared with NPS of other companies across industries, and you will be comparing apples to apples. This unique method is revolutionary in that it grants businesses the ability to compare the level of satisfaction among their customers, or members in the case of credit unions, with that of other businesses, without regard to the product being addressed. This is because asking whether or not a person will recommend a service or product is focused upon measuring the person’s feeling about the service surrounding the product, their loyalty to the company, and how strongly they feel about their relationship with the company.
To our knowledge, one credit union is using the NPS to evaluate their level of member satisfaction. BECU ($6.6B in Seattle, WA) asks two questions on their NPS survey. The first is: How likely are you to recommend BECU to friends and colleagues? The second: What was the most important factor that influenced your score? The second question serves enables members to clarify why they reported the value chosen. BECU has used the NPS to set member satisfaction goals in terms that employees at every level of the credit union can understand. They currently report their NPS as 70 percent and have set a three-year goal of 75 percent. By reading the members’ responses to the second question in relation to their answer to the first, BECU knows where to focus their efforts to improve their score.
© 2006 Net Promoter is a registered trademark of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld.