It’s a Monday morning, and you’re working on financial forecasts for your business. Your office manager stops in to let you know that your biggest long-term client has just canceled. Later that day, a dependable employee that’s been with you for three years doesn’t show up for a meeting with a new client.
You are frustrated. How are you supposed to determine what your business is going to look like in six months or a year if you don’t know which of your current clients and employees will be around then? Is there any way to stop clients from canceling, employees from leaving and have a reasonable idea of what your business will look like a year from now?
How Companies Assess the Health of their Relationships with Clients and Employees with Net Promoter Scores
While there are things you cannot control in your business, there are simple changes you can make to improve client and employee retention. Identifying issues before they have already found someone else to get services from or a new place to work is the first step in preventing client or employee loss.
Major companies like Google, Apple, Costco, Amazon and Verizon use the Net Promoter Score (NPS) to assess the health of their company, determine how happy people are with their services or goods, and predict what their business will look like months down the road.
NPS in a Nutshell
To calculate a company’s NPS, you first need to start with a survey.
A Net Promotor Score survey asks simple questions to clients such as:
“On a scale of 1 to 10, how likely are you to refer someone to XYZ COMPANY?”
Or, to employees:
“On a scale of 1 to 10, how likely are you to refer a friend to work at XYZ COMPANY?”
Depending on how an individual rates the business, they are considered a Promotor, Detractor, or Neutral. A company can calculate its Net Promoter Score by determining the difference between the percentage of Promoters and Detractors to determine a score between +100 and -100. Companies often track their score with subsequent surveys to determine if any changes that have been implemented have improved overall client and employee satisfaction.
Surveys can be conducted anonymously or be tied to a specific client or employee. If it is tied to a person, not only will you know how that person is doing on a scale from 1 to 10, but you may receive comments or feedback that indicate why the person feels as they do. This can be especially valuable if the person provides insight as to why they are unhappy, or what might make things even better if they are happy. You can then reach out to that person BEFORE they decide to abandon ship and determine which changes can be made to improve that relationship.
Depending on the type of business you run, surveys can be tied to clients assigned to a certain Manager, Account Executive, or other individual employees. Regularly assessing the NPS of your managerial employees can help you determine which managers are struggling, who is excelling and where it may be a good idea to make changes in who is handling clients or accounts.
Even when not tied to an individual member of your managerial team, NPS can help you identify systemic issues and problems that may be confronting your business. It also helps predict how likely you are to lose clients and employees in the months ahead to give you a sense of where your business is headed.
ChoiceLocal Review & Retain: The Power of Asking the Question
ChoiceLocal partners that have used ChoiceLocal Review & Retain, ChoiceLocal’s Net Promoter Score product designed to survey current clients and employees monthly via text, have been able to save valuable relationships. By conducting monthly surveys of clients, they have been able to intervene with individual clients to save professional relationships that they would not have otherwise known were in trouble. In surveying employees, they have been able to make simple changes, such as updating the procedure for internal communication or changing an unpopular uniform item. They have seen NPS improve from negative numbers to well over the excellent score of 50 and improved employee and client retention rates.
Gaining insight into what is happening behind the scenes of your business gives owners a valuable tool to grow their business. Regularly asking clients and employees for their opinions and feedback lets them know they are important and valued, especially if your business has grown beyond the point where you can personally interact with each client and employee on regular basis. As an owner, you may be afraid to find out what’s going on behind the scenes because you know it’s not all good but identifying issues can help you take the first steps in improving the health of your business.
About the Author
Mary Anne Deras Soltis is a Senior Account Executive at ChoiceLocal. When not providing service to her partners, she is trying to make the world a slightly better place by doing (many, many) small things with a great love for her family, friends and community.