Unlocking the economic value of measuring NPS

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How telecom and cable operators can unlock the economic value of measuring NPS

Increasing the value your customers generate while creating 'fans' of your brand 

Net Promoter Score (NPS) has been fully adopted by the telecoms and cable industry. NPS measurement and analytics tools have been implemented and NPS is a very relevant key performance indicator for customer experience. It is important to realise that NPS is also an important indicator for whether customers will actively promote your brand. Deloitte’s view is that NPS measurement is in many cases not optimally implemented nor optimally leveraged for generating economic value and creating ‘fans’ of your brand.

Stick to the method

What is important is to ‘stick’ with the essence of NPS which is asking exactly that one question: ‘On a scale of 0 to 10, how likely is it that you would recommend [your brand] to a friend or a colleague, based on your experience with us and our services?’
This is important because the customer’s answer offers an indication about whether he or she is willing to actively promote your brand and services or be indifferent or be a serious detractor/non-promoter. And this is what you want to know because research shows that customers have a strong influence on the subsequent buying decisions of friends and colleagues.

Stimulate promotions

Now the key is not only to ask exactly that one question, more important is to offer customers the opportunity to then take action to actually promote your brand. So, right after your customers went through an interaction with your brand and in case they answer the NPS questions with a rate of 9 or 10, you must offer social links they can use to post on their social network timelines, offer them materials they can share via Whatsapp, whatever you can think of to help your ‘promoters’ to promote your brand.

This last point is often forgotten and it is a missed opportunity to leverage NPS measurements to let your customers generate value. On the contrary, we see our clients often just showing the NPS measurement outcome and/or take action on the dissatisfied, ‘detractor’ customers. Which in itself is also important.

Unlocking economic value

The economic value of NPS on the one hand manifests itself in KPIs that are well known to the telecoms industry: ARPU, Churn, Average Lifetime and Products per customer. Our research shows that when you segment your customers based on NPS score there is a clear indication that Promoters score significantly better on these KPIs.

Taking action to turn ‘passives’ and (to a lesser extent) ‘detractors’ into ‘promoters’ will lead to an improved NPS but so much more importantly leads to those customers improving on the key economic KPIs as well.

Furthermore, actively supporting your ‘promoters’ to promote (e.g. ‘friend get friend’) will lead to an increased acquisition of new customers. When you ensure that this new inflow of customers is cultivated over time to score well on ARPU, Churn, Lifetime and Product penetration, while saying good bye to many of your lower performing ‘detractors’ you will further increase the value that your overall customer base will generate, while at the same time creating much happier customers and even ‘fans’ of your brand. So, a higher NPS is underpinned by higher returns.

NPS Economic Simulator

Deloitte has developed a simple and effective tool for initial economic value analysis of improving your NPS. Based on high level data about your key KPIs and your NPS measurement data this tool performs a first ‘size of the prize’ analysis that you can then take forward into unlocking your full NPS dataset to transform the way you work with NPS. Leading to higher NPS scores and creating a transformation over time of your customer base and the value it generates.

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