To a life science commercial professional, a promoter is a customer who's essential for your company to drive sales and grow its customer basis.
In both cases, the absence of promoters eventually brings product flow to a grinding halt.
Net Promoter Score (NPS), developed by Satmetrix, Bain & Company and Fred Reichheld is a worldwide standard for organizations to measure, understand, and improve their customer experience.1-3 To many companies NPS answers the ultimate question: "How likely is it that you would recommend us to a friend or colleague?"
NPS is a straightforward metric that can help companies and every employee therein to understand and be accountable for how they interact with customers. Properly applied, NPS evaluation opens the door to customer-centric change and improved business performance. Its popularity as an enterprise-wide assessment tool is growing, in part due it's relative simplicity and demonstrated ability to serve as a leading indicator of profitable growth for many businesses.
The purpose of this article is to start a discussion regarding the pros, cons, and alternatives regarding NPS assessment strategies in the life science and clinical services community.
Satisfaction is quantitated on a scale of 0 (low) to 10 (high). Customers are categorized into 3 groups based on their answers: promoters (ratings of 9 or 10), passives (7 or 8), and detractors (0-6). Promoters represent valuable assets that drive profitable growth because of their repeat or increased purchases, as well as their tendancy to share their enthusiasm for your product or service with their friends and colleages, thus acting as a crucial "force multiplier" to your commercial efforts. Detractors are liabilities that inhibit profit and growth because of their complaints, reduced purchases or defections, and negative word-of-mouth.
Net promoter score = % promoters – % detractors
Figure 1. The NPS scoring system.
Figure 2 summarizes other NPS-driven behaviors and their ramifications on a company's bottom line. Beyond increasing annual spend, promoters tend to be less concerned about price, and their positive word-of-mouth can stimulate sales locally and in distant regions by virtue of the growing use of social media. Conversely, detractors' negative commentary about your products or services can have far-reaching impact via social media and be exploited by your competitors. Detractors not only erode profits via lost sales; they typically consume more time and labor from your staff.
Figure 2. NPS-related behavior.
NPS use in the SAMPS community
Data from a preliminary survey of SAMPS members suggest that most life science suppliers measure customer satisfaction in some way, but the data are too preliminary to suggest that rigorous application of NPS scoring is the most common methodology.
Customer satisfaction data have enabled some organizations to improve services or products to help drive customer retention, market share, or sales growth. However, SAMPS members mentioned that quantifying customer loyalty and its impact on repeat business is challenging, especially when the supplier has high-volume supply agreements or when the average sale price for a product or service is very high. Assessing NPS also can be challenging in B2B situations involving multiple customer stakeholders with differing needs.
Preliminary findings also suggest that stewardship of the customer satisfaction survey process varies between organizations. Depending on the company, the survey and assessment process was administered by quality, process excellence, client services, sales, or marketing departments—or via collaborations between some of these departments.
Challenges to the use of NPS
Appropriate target audience
Like any metric, results from NPS analyses aren't always conclusive. For example, some customers participating in satisfaction surveys may base their feedback on dealing with a single business unit or using a single product, rather than an entire corporate entity. Other customers may take the opposite approach, assigning scores based on their perception of the overall company. Therefore, an important requirement when you measure customer satisfaction is to ensure that your survey response can be traced to the specific customer experience wish to measure and clearly define the characteristics of the respondent.
Related to the issue of target audiences, some organizations send surveys to customers who use their products or services AND to noncustomers in order to measure overall perceptions and compare those perceptions with actual customers.
Confusion about scoring methodology
Some of my colleagues at life science organizations report confusion regarding how to interpret NPS data. These colleagues understand and favor the promoter/detractor concept and employ standard operating procedures requiring that any customer reporting a score below a set value (eg, 6) be contacted by an executive. However, given a scoring scale of -100 to 100, these same groups struggle to define the outcome when, for example, the score increased from 32 to a 43 or changed from 12 to a -18.
Net Promoter Score programs have been successfully applied in many industries, including life science and clinical service organizations. However, simply measuring NPS won't bring success. Companies have to systematically convert what they learn into action, such as having a company's leadership team contact any customer categorized as a detractor in order to diagnose the cause of a low NPS score. Such a response is applied by all the companies mentioned in this preliminary report. In all instances, the overall score distribution and any anecdotal responses were distributed to the executive leadership team as well as to the specific effected functional areas.
But executive response isn't enough. Employees at all levels must engage in NPS evaluation and response actions during their daily roles and responsibilities. Everybody has to walk the walk. To achieve that, companies that have established solid baseline NPS scores sometimes opt to link at least part of their employees variable compensation of the maintenance and improvement of NPS.
And the take-home lesson? It takes an entire team to score consistently well.
Scott Lewkowitz has more than 20 years of diversified experience leading financial and commercial operations organizations for such global leaders as GE Healthcare and Ansell Healthcare. He has developed award-winning customer centric support organizations throughout the life sciences and healthcare industries while leveraging the power of NPS.