Understanding Your Net Promoter Score
The way Paul Edgcomb sees it, the net promoter score (NPS) is the single most important metric in a collision repair shop.
“It’s more important than anything else. If you’re not doing a good job taking care of your customer, it doesn’t matter how much money you’re making or what else you’re doing. This is where your business comes from,” he says.
And Edgcomb should know. As the owner of Champion CARSTAR in Hightstown, N.J., his shop regularly maintains an NPS score of 96.1 percent, one of the highest in the CARSTAR network and in an industry that regularly sees scores in the 60-70 percent range.
Unlike traditional CSI scores, the NPS measures how likely a customer is to refer a business. More than that, Dan Young, senior vice president of insurance relations at CARSTAR Corporate, says that it’s a figure insurers are increasingly looking at, often times more than CSI. That’s because he says it’s a score that represents your entire repair experience.
“It is a very good gauge of the type of service you provided throughout the whole claim experience,” he says. “For someone to recommend you, the entire experience has to go above and beyond. From the moment the customer comes in your shop, your NPS clock has begun to tick.”
Understanding how to determine and maximize your NPS can help any shop improve its customer service experience and overall metrics.
The NPS has gained popularity over the past several years as a supplement to traditional CSI scoring. Popularized by author Fred Reichheld, who presented the idea in his book “The Ultimate Question,” the score for a particular customer experience is based off a scaled survey question to the customer that asks: On a scale of 0 to 10, how likely are you to refer the repair facility to family and friends, based on your experience? In this scale, the zero represents an exceedingly poor experience, while a 10 represents the best.
—John Webb, president and COO, CSi Complete
Those results are then divided into three categories which make up the PNS acronym: Promoters, which are customers answering 9 and 10; Passives, customers answering 7 and 8; and Detractors, which are customers answering 6 and below. The formula for the NPS score is the percentage of promoters minus the percentage of detractors. That result, the NPS, is also displayed as a percentage.
John Webb, president and COO of CSi Complete, says that a good NPS is generally considered to be more than 50 percent, though the collision repair industry typically trends higher at 60–70 percent. Although NPS scores tend to be lower than traditional CSI scores, Webb says that is the driving reason why NPS has increased in importance: It is the only score that factors in the unsatisfied customers.
“For a long time in the industry, the CSI score was beginning to lose some value because of the relatively high score a lot of shops would receive,” he says. “Companies like mine would receive feedback that everyone is a 98.”
Furthermore, Webb says that the NPS provides a more accurate look at your overall customer service experience. According to a study conducted by Reichheld for “The Ultimate Question,” 96 percent of executives at the 362 companies studied say they were customer-focused companies, and 80 percent believed they provided a superior customer service experience. Reichheld then surveyed the customers of those companies, 8 percent of which responded that they felt the companies provided them with superior customer service.
“The chasm between a customer experience and their perception of a brand, and the executive or shop owner’s perception is vastly different,” he says. “The NPS acts as a mechanism to reinforce that in your mind on a daily basis.”
Young also notes that a focus on a high NPS also tends to improve metrics across the board.
“If you have a store that has a very high NPS, you can track and see that they have very good metrics around on-time delivery, quality and service,” he says. “If you’re after the most difficult metric to get, the rest of those metrics seem to fall in line.”
Tracking Your NPS
Webb says there are a number of ways to track your NPS. A third-party CSI company can easily add the survey question to the standard follow-up process, while shops can also measure it themselves through electronic, text messaging, phone-based or business reply card surveys.
When it comes to the survey itself, Webb recommends keeping it at three to five questions. While the true NPS is calculated based only off the “refer” question, he says that some shops mold the process to include a number of different questions that are then averaged out.
Should a shop choose to do that, Webb says to make sure the questions are all ranking-based questions with the same scale and given the same weight.
“The main key is to stay consistent, have a process in place that allows you to utilize the tool and not just harvest information,” he says. “A lot of companies can harvest information but it’s really what you do with it that matters.”
Maximizing Your Score
Webb says that after determining your score, shops should analyze both the score and the individual responses to maximize the score. Webb and Edgcomb outline the top ways to maximize and improve a shop’s NPS.
1. Service Recovery. Edgcomb says that any time the shop receives a rating of 8 or below, the shop receives an email alert from their CSI company. The shop will then immediately call the customer to discuss the issue and encourage them to come back in. “In the end, it’s not that something went wrong, it’s what you do to take care of it and make it right,” he says. Webb says to also analyze the dollars represented by the Detractors as a way to visualize the amount of lost dollars.
2. Turning Negatives into Positives. Webb says that the score puts increased importance on turning Passives into Promoters. “The 8s and 7s are the customers that with a little tweak here and there could be converted into 9s,” he says. “There was probably just a minor irritant, like you missed the delivery date by a day.” Webb suggests implementing programs to turn Passives into Promoters and looking for patterns or issues that frequently crop up with Passives. “That’s really taking a market research tool and turning it into a management tool,” he says.
3. Positive Reinforcement. No one likes to hear only the negative reviews, says Edgcomb. Although the negative reviews are dealt with immediately, he also makes a point to share the positive write-in answers with the staff and post testimonials.
4. Predictive Analytics. Webb says that the individual NPS results can be used to look for patterns and predict future outcomes. “We can look at where we’ve been and say, ‘Let’s try to predict what’s going to happen if a guy comes in with a 7-series BMW,’” he says. “There are numbers that can back those kind of hunches up.”
5. Maintain a 100 Percent Goal. Edgcomb says that his biggest key to a high NPS is setting a goal of 100 percent. “If you don’t set the 100 percent goal, then anything less than that is a place where it can slip,” he says. “If you set it at 90, if you get a 93, it’s not a big deal. It just slowly starts slipping.” The crucial aspect to understand about the NPS is that every individual ranking can easily affect your score, so Edgcomb says it’s in your best interest to strive for perfection. “This forces us to focus on each and every single customer all of the time,” he says. “You go out of your way to establish the relationship with the customer.”
6. Use it as an Educational Tool. Edgcomb uses any less-than-perfect score as an opportunity to talk through the issues with the entire staff and ensure the problem doesn’t happen again. “Every single time you get less than perfect, it is a big deal,” he says. “Everyone has to learn from it, and we have to figure out what went wrong.”