In my experience and client work, companies generally have many more “promoters”—and thus potential references and advocates—than they realize. When Microsoft was first threatened by free software created by passionate open source communities, the firm was pleasantly surprised to find that its own customer community had a solid core of highly passionate customers. They formed the foundation allowing the firm to (eventually) divert hundreds of millions of dollars worth of expensive support calls to the community—enabling the firm to compete with the free support provided by the open source communities.
Firms using Net Promoter Score (NPS) often spend too much time obsessing over “detractors” rather than leveraging “promoters.” Which is a shame because the same sort of hidden wealth is often available to them that Microsoft uncovered. Even if your NPS is zero, you might very well have a third of your customer base identifying themselves as promoters, and thus potential references and advocates.
Firms using Net Promoter Score (NPS) can spend too much time obsessing over “detractors” rather than leveraging “promoters.”
That’s what Coleen Kaiser, at the time vice president of customer value and reference service at SAP, found to her astonishment when she took over the firm’s global customer reference program. (Keep in mind that SAP is one of the smartest software firms in the world—that should tell you how easily a company can stumble when it comes to developing its customer reference program.)
Several business units at SAP had been diligently using Net Promoter Score surveys for years. Analyzing the NPS data, along with data from SAP’s reference programs, Kaiser found that— remarkably—very few of the self-identified promoters were actually in the SAP reference program. This was despite the fact they explicitly told the firm that they would be “very likely” to recommend SAP to a friend or colleague! All SAP needed to do was ask, but it never had.
At the same time, relatively few of the customers in SAP’s reference program—the customers they were using as references— identified themselves as promoters in the surveys. That is, SAP’s customer references weren’t particularly enthusiastic about recommending the firm!
Evidently, managers were inviting customers into reference programs based on tips from account executives, personal relationships, or perhaps the “marquee” value of the firm name.
To correct this hit-or-miss system, here’s what Coleen did:
- She moved the tepid non-references out of SAP’s customer reference programs.
- She moved the promoters in. Whereas previously, fewer than 20 percent of promoters were in the SAP reference program, she shepherded in another 70 percent-plus of the promoters. (It wasn’t that hard. Remember, promoters want to promote you.)
Soon the reference programs began nudging up the needle on sales. Eventually, the after-sale “win-loss” surveys showed that the importance of references for closing deals went from “neutral” to becoming one of SAP’s highest-ranking competitive advantages.
