Would you like to make yourself more referable? Do you currently know your referral quotient?
Many companies pay hundreds of thousands of dollars creating and distributing surveys to find out how their clients think. Less than 5 percent of the surveys are returned, and even less if a reward is not given. But now you have a tool to find out how your clients perceive your relationship and how referable you are. It’s called the Net Promoter Score (NPS).
Fred Reichheld, a partner at Bain and Co., spent a decade searching for a simple way to measure why some clients become raving advocates and others are just simply satisfied. Here is how NPS is implemented. First ask your clients to rate you on a scale of zero to 10 on the question:
“How likely is it that you would recommend us to a friend or colleague?” Then sort the responses into three groups:
1) Promoters: 9s and 10s
2) Passives: 7s and 8s
3) Detractors: 0 through 6
The percentage of promoters minus the percentage of detractors equals your score. If you have 75 percent promoters and 15 percent detractors, you have an NPS of 60. This means your “refer-ability” is only 60 percent. As a rule, anything above 50 percent is good. But referrals don’t come consistently unless your score is over 75. One important consideration is to offer this survey only to your A and B clients. These are the clients you most want to get referrals from.
Your goal is to constantly drive that score up by asking two important follow-up questions:
“Why did you give us that score?”
“How can we raise that score?”
For every 10 percent increase you can gain in your NPS score, your net income will also increase by 10 percent. Below is an example of an NPS form:
“How likely are you to recommend our firm to a friend or colleague? Please circle the number that best represents your view.”
Lowest 1 2 3 4 5 6 7 8 9 10 Highest
“Why did you give us this rating?”
“How specifically can we improve your score? “
One of my clients sent an NPS rating sheet to his A and B clients. His NPS score was 50. When he asked the question, “Why did you give us this rating?,” many clients responded that they only heard from him once a year. When they answered the question, “How specifically can we improve your score?,” many clients asked to be called once every three months.
When he implemented these three-month phone calls, his NPS score increased and referrals started flowing in. His NPS score increased to 90 and advocacy (incoming referrals) started to flow in as well. His income increased by 75 percent all within six months.
“Referrals don’t come consistently unless your score is over 75.”
Kerry Johnson, MBA, PH.D., (www.kerryjohnson.com) is a best-selling author, coach and speaker. Responses and questions can be sent to firstname.lastname@example.org.