Net Promoter Mania

I have the bug. The Net Promoter case study that describes the miraculous turn-around of customer engagement at American Express—and the simplicity of the idea behind it—is incredibly compelling. Before Jim Bush, EVP of World Service, was in charge, customer service at American Express was measured by the speed with which a representative could get the customer off the phone. Like most call centers, American Express assumed that customers hang up only when satisfied, and so reasoned that the faster the representative gets the customer off the phone, the better the service must be.

The core idea behind the Net Promoter concept is that customer loyalty is best measured by how likely it is for customers to recommend a product or service to someone else. American Express shifted its strategy and began measuring success by how effectively service turned customers into promoters of the business. The change resulted in customers spending 10-15 percent more on Amex products and growing 4-5 times more loyal to the company. Both of these effects had a demonstrable impact on shareholder value.

Companies have applied the concept to measure a wide range of things, including employee engagement—and it’s worth thinking about how likely you would be to recommend your organization as a great place to work.

Introducing the idea to the social sector presents a variety of potential uses and associated practices. Nonprofits are starting to use the tool to measure the loyalty and engagement of their clients, and the stories emerging from the nascent practice—such as the early success of the Durham Performing Arts Center—are promising.

What if the Net Promoter idea were implemented across the multiple constituencies served by nonprofit organizations, including donors, partners, employees, volunteers, and beneficiaries?

Consider, for example, the potential application for this approach to nonprofit boards. How many board members would recommend their organization as a place to donate, work, volunteer, or serve as a board member? We do a lot to encourage board members to network on behalf of their organizations, but perhaps encouraging behavior that would affect the Net Promoter scale should be at the core of our evaluation instead.

Adding the Net Promoter measurement to board evaluations would provide nonprofit and board leaders with deeper insights into what they could do to really engage board members in active networking for their organizations, by helping them to focus on turning various stakeholders into promoters.

Or what if we applied the concept to service—how many volunteers would recommend an organization where they have served? If we designed service so that evaluations worked to optimize the volunteer experience in terms of engagement and impact, we would likely improve outcomes related to expanded civic engagement and more ongoing support for the sector.

At the broadest level, we might consider the overall Net Promoter score of the nonprofit sector. For example, how many nonprofit employees would recommend the nonprofit sector as a great place to work? How many Americans would recommend nonprofits as the best resource to address social, economic, and environmental challenges?

The concept has great potential in the nonprofit sector. At a time when the evaluation is everything and the most common buzzword is “metrics,” Net Promoter might be just the tool we need guide the sectors development and expand its capacity to meet its goals.

Read more stories by Aaron Hurst.