How to manage your customer satisfaction with the NPS score.

Make Customers Happy By Growing Employee Satisfaction (Yes, Really)

Posted May 11, 2015 by Tracey Wallace in Running a Business 101
An NPS score helps your company gauge employee and customer satisfaction, predict turnover, and create a better work environment.

In case you haven’t noticed, there’s been a pretty big shift in consumer attitudes since the invention of the web. Steve Jobs likely kicked this off, creating fonts and touchscreens we didn’t even know we wanted –– but that few of us could now do without. Today, most companies understand that how a customer feels about their product and services is more important than just about anything else. Its how Apple gets so many people to stand in line for a new iPhone that has maybe three feature upgrades, while Android phones can rewrite the smartphone playbook (and in a good way!) and not have a single soul physically waiting for its release.

Customer satisfaction matters –– and it’s why so many household name companies have begun using the NPS system to determine how they are doing when it comes to generating positive customer sentiment.

What's The NPS Score?

NPS stands for Net Promoter Score and it is the system that has replaced much of the consumer surveys industry. See, a few years ago, Fred Reichheld and a Bain team launched a research project to determine whether a different approach to customer sentiment would prove more fruitful than consumer surveys. Working with data supplied by Satmetrix, they tested a variety of questions to see how well the answers correlated with customer behavior.

As it turned out, one question worked best for most mature, competitive industries:

What is the likelihood that you would recommend Company X to a friend or colleague?

High scores on this question correlated strongly with repurchases, referrals and other actions that contribute to a company’s growth. In 11 of the 14 industry case studies that the team compiled, no other question was as powerful in predicting behavior. In two of the remaining three cases, other questions won out, but the likelihood-to-recommend question was so close to the top that it could serve as a proxy for the leaders. So, a company’s Net Promoter Score is based on this question alone.

More than 100 companies today use the NPS system to determine customer sentiment, including Apple, T-Mobile, Facebook, USAA, PayPal, Citigroup Neiman Marcus, Zappos and JetBlue, to name a few. In all, the closer your score is to +100, the better. And the further away you can stay from negatives (which can go to -100), the better. USAA, Discover, State Farm, Apple, Pandora, Amazon, Southwest Airlines, TripAdvisor and DirecTV all rate the highest in their respective industries.

Happy teams perform better. Learn how to keep your employees happy and productive.

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Employee Retention Affects Customer Sentiment

Of course, NPS scores aren’t just for measuring how your customers feel about your brand. Today, most successful brands also qualify as “social brands,” meaning their employees engage in social media activities helping to promote the company.

Much of this is done of the employee’s own accord, as they share pictures of Cinco de Mayo activities the company put together (especially of the margarita machine they brought in) or of all the cool temporary tattoos passed around the office for May the 4th be With You.

It is important for companies, especially HR departments, to maintain high employee retention and this is where the NPS score becomes extremely beneficial.

Zappos is a great example here. The company uses both NPS and eNPS (employee net promoter score). Zappos utilizes what it calls the “Five Second Happiness Survey,” and asks five questions which employees answer by marking whether they agree “definitely”; “sometimes”; and “not at all.” The questions are:

  • I believe that the company genuinely has a higher purpose beyond just profits.
  • My role in the Zappos Family has real purpose – it is more than just a job.
  • I feel that I am in control of my career path and that I am progressing in my personal and professional development within the Zappos family.
  • I consider my co-workers to be like my family and friends.
  • I am very happy in my job.

See, Zappos has a clear social media policy that allows its staff to tweet under their own name while identified as a Zappos employee. And if that employee isn’t happy at Zappos,  that’s a big risk. An employee could easily say something that could embarrass the company, but that just hasn’t happened. Why? Because their employee NPS score is well into the positives.

Zappos runs this quick survey every month, then the scores and feedback are emailed to all “Zapponians” and changes are made to the company and policies based on what employees say.

In all, an employee NPS system helps your company to gauge employee happiness, predict turn-over and work toward creating a better work environment for your employees on a monthly basis. After all, if you’re going to use NPS to measure customer sentiment and base customer-facing business decisions off of it, you might as well do so to raise employee satisfaction as well. Because no longer is it enough to make only your customers happy. For today’s social savvy companies, happiness comes from within –– and that starts with the NPS of your team.

This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, legal or tax advice. If you have any legal or tax questions regarding this content or related issues, then you should consult with your professional legal or tax advisor.