Here’s how and why HR departments can use Net Promoter Score data
Net Promoter Score (NPS) was first introduced by Bain & Company in 2003, and it was quickly adopted as the standard measure of customer loyalty.
The idea of NPS is simple: Customers are polled with 1 to 2 questions. One question asks for the quality of their experience and the second asks if they’ll recommend [product/company] to a friend or colleague. If you’re an everyday consumer of technology — from Apple to AirBnB — you’ve probably seen NPS before.
NPS to assess customer loyalty
Companies like AirBnB and Apple use customer loyalty to assess revenue health with:
- Customers acquisition
- Customer retention
Here’s how NPS plays out for customer loyalty.
A company wants to know which product feature drives loyalty with customers, to retain them. It’s a marketer’s dream for everyone to talk about their product. A lot of talk about a product drives new customer acquisition (growth). This is why customer feedback is essential. Think of Apple. Need to find out about their best feature? Just ask a customer.
But NPS does more than drive growth; it’s also an operating strategy. Since NPS is the customer’s voice, it helps engineering teams prioritize new feature requests.
NPS to assess employee loyalty
Now, let’s look at that again through a different lens.
A company wants to know which corporate benefit drives loyalty with employees, to retain them. It’s an HR manager’s dream for everyone to talk about their company. A lot of talk about a company drives new employee hires (growth). This is why employee feedback is essential. Think of Apple. Need to find out about their best corporate benefit? Just ask an employee.
But NPS does more than drive growth; it’s also an operating strategy. Since NPS is the employee’s voice, it helps HR teams prioritize new benefit requests.
You may have noticed this is exactly the same thing, but replaces customer with employee, marketer/engineer with HR, product with company, feature with benefit, and acquisition with hire. An HR professional already measures the health of a company via:
- Employee recruitment
- Employee retention
- Employee development
That’s because employees are your customers.
Why Use NPS With Employees?
It’s easy to see why companies are obsessed with Net Promoter Score. It’s a simple way of gathering customer feedback in real-time. At LeanBox, we’re obsessed with sharing info that makes the HR pro’s life easier. And NPS has us doing cartwheels over here! As the person leading the charge on “find them, grow them, keep them,” here are 6 reasons why you should absolutely take a deep dive into NPS.
1. It brings transparency to the table
Use NPS as a tool to set the expectation that you are willing and open to hearing concerns (and praise!). If a company or business practice isn’t transparent in this digital age, it’s on the losing end. Without complete transparency, it’s impossible to build trust, satisfy employees, and have a high degree of employee engagement.
Here’s what being transparent means:
- Having nothing to hide
- Being welcome to feedback
- Being open to conversations anytime
2. It keeps your company honest
If your NPS score is high, great! You’re doing something right, no matter the issues. If 45% of employees are not likely to recommend your company? Time to take action. There’s no hiding from that number.
3. It helps predict employee disengagement
By measuring NPS, you can always have a finger on the pulse of employee happiness and engagement.
4. It’s linked to performance
Trended over time, a company’s Net Promoter Score can be mapped directly to organizational performance.
5. It’s a built-in manager thermometer
Use NPS to assess the confidence of a team has in its leader. Which divisions represent liabilities? Which divisions offer best practices? Which team leaders are loved? Which need more coaching?
6. It builds confidence
Share your NPS with colleagues in the field. If it’s high, build a culture code or an employee manifesto around the things that delight your employees. These are true testaments of the larger mission of “growing them, keeping them.”
A Breakdown of NPS
On a scale of 0 to 10, what is the likelihood you’d refer [company] as a place of work to a friend? The question is both simple and thorough. In a snapshot, you can assess employee loyalty and engagement.
The 0-10 scale measures three levels of engagement: high (promoters), medium (neutral), and low (disengaged).
- Promoters: anyone who gives you a score between 9 and 10.
- Passives: anyone who gives you a score between 7 and 8.
- Detractors: anyone who gives you a score between 0 and 6.
Employee promoters are your most loyal employees who will recommend employment at a company. Their energy is contagious. Part of the reason is that it’s hard to rank here, there’re only two numbers, leaving little room for gray area.
Passive employees are neutral. They are not necessarily negative, but also not enthusiastic about making a referral.
Detractors are those that are not likely to recommend employment at the company, and it’s critical to know why. Since the majority of the scale lives here, there’s a lot of gray area.
Your NPS is calculated by subtracting the percentage of detractors from the percentage of promoters. Passives just get tossed out; they have no effect on the score.
What to Do With Your NPS Data
NPS is the sum of every interaction within your company culture so use this data to set a segmented action plan.
Promoters are your champions
Taking action on this group is straightforward. Understand what creates a successful experience for them and what correlation exists between benefits and high NPS ratings. Next, ask your champions to write reviews on sites like Glassdoor, Hired, Drafted, or your own company website. This is social proof. Reviews are the holy grail.
Passives should be re-engaged
Taking action with this group is a bit tricky. Remember these are satisfied employees, but they’re not enthusiastic. So it’s not appropriate to ask this group for references. Your goal is to retain these employees, re-engage them, and only if you hit this target, eventually earn the right for a reference.
Detractors need attention
This group of employees require more attention and care. The goal is again is not to ask for a reference, but to take a deep dive into the source of their grievance(s) and address them.
Look at the most actionable part of the NPS survey, the second open-ended question. Analyze comments and create a separate detractor issue from promoters benefits. This will help you respond to and take action on the ideas within this section. Share your plan for improvement and assign ownership. If your goal is to move 5 employees out of the detractor bucket per month, report on what steps worked and what didn’t to close the loop with the company.
Lastly, it’s important to capture NPS over time so you can track employee satisfaction across a company’s journey so stick to weekly, monthly or quarterly NPS surveys. Below is a list of tools to help you collect NPS feedback.
List of NPS tools
There are currently two ways to collect NPS, web app or email (via a survey). The first 5 tools are web applications, and the remaining three are email/survey tools. Need to sound off an NPS today? Try the last three options.