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Nonprofit Management

Net Promoter Mania

Introducing a corporate measurement strategy to the social sector presents a variety of potential uses and associated practices.

I have the bug. The Net Promoter case study that describes the miraculous turn-around of customer engagement at American Express—and the simplicity of the idea behind it—is incredibly compelling. Before Jim Bush, EVP of World Service, was in charge, customer service at American Express was measured by the speed with which a representative could get the customer off the phone. Like most call centers, American Express assumed that customers hang up only when satisfied, and so reasoned that the faster the representative gets the customer off the phone, the better the service must be.

The core idea behind the Net Promoter concept is that customer loyalty is best measured by how likely it is for customers to recommend a product or service to someone else. American Express shifted its strategy and began measuring success by how effectively service turned customers into promoters of the business. The change resulted in customers spending 10-15 percent more on Amex products and growing 4-5 times more loyal to the company. Both of these effects had a demonstrable impact on shareholder value.

Companies have applied the concept to measure a wide range of things, including employee engagement—and it’s worth thinking about how likely you would be to recommend your organization as a great place to work.

Introducing the idea to the social sector presents a variety of potential uses and associated practices. Nonprofits are starting to use the tool to measure the loyalty and engagement of their clients, and the stories emerging from the nascent practice—such as the early success of the Durham Performing Arts Center—are promising.

What if the Net Promoter idea were implemented across the multiple constituencies served by nonprofit organizations, including donors, partners, employees, volunteers, and beneficiaries?

Consider, for example, the potential application for this approach to nonprofit boards. How many board members would recommend their organization as a place to donate, work, volunteer, or serve as a board member? We do a lot to encourage board members to network on behalf of their organizations, but perhaps encouraging behavior that would affect the Net Promoter scale should be at the core of our evaluation instead.

Adding the Net Promoter measurement to board evaluations would provide nonprofit and board leaders with deeper insights into what they could do to really engage board members in active networking for their organizations, by helping them to focus on turning various stakeholders into promoters.

Or what if we applied the concept to service—how many volunteers would recommend an organization where they have served? If we designed service so that evaluations worked to optimize the volunteer experience in terms of engagement and impact, we would likely improve outcomes related to expanded civic engagement and more ongoing support for the sector.

At the broadest level, we might consider the overall Net Promoter score of the nonprofit sector. For example, how many nonprofit employees would recommend the nonprofit sector as a great place to work? How many Americans would recommend nonprofits as the best resource to address social, economic, and environmental challenges?

The concept has great potential in the nonprofit sector. At a time when the evaluation is everything and the most common buzzword is “metrics,” Net Promoter might be just the tool we need guide the sectors development and expand its capacity to meet its goals.

Read more stories by Aaron Hurst.

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COMMENTS

  • BY Greg Baldwin

    ON June 13, 2012 01:37 PM

    Here, here…an idea whose time has come…in fact, at VolunteerMatch, we’ve already begun.

    Similarly inspired by Fred Reichheld and his bestseller “The Ultimate Question,” we upgraded the VolunteerMatch platform to ask volunteers if they would “Recommend” a nonprofit to others based on their volunteer experience with them.

    The feedback is already shaping peoples decisions as organizations with positive “Recommendation” feedback consistently attract more new volunteers than organizations without. We think it is an enormously powerful and useful feedback loop for both volunteers and nonprofits alike.

    Taproot Foundation is a great example—enjoying a four star recommendation rating.
    http://www.volunteermatch.org/search/org31426.jsp

    But we’ve only just begun and need more folks to share their volunteer experience feedback. What do you think? Would you recommend the last nonprofit you volunteered with? Come tell us why at VolunteerMatch.org.

  • BY Rob Markey, Partner, Bain & Company

    ON June 14, 2012 06:59 AM

    Aaron:

    Outstanding article. At Bain, we really believe the non-profit sector can benefit from a more thoughtful approach to managing relationships with the many constituencies involved. We’ve seen this done successfully at a variety of organizations, and many others are on what we now call the “Net Promoter journey.”

    In the process, we’ve learned a lot about how to do this successfully, and it begins with moving beyond just measuring likelihood to recommend an calculating a net score. We’ve found that the successful adherents to the approach employ a full system of mechanisms and processes that support high velocity closed-loop feedback, learning and action. Organizations like Teach for America, City Year, KIPP and many others are learning the value of the full Net Promoter system.

    In fact, we rewrote the original book just last year. It’s been published under the name The Ultimate Question 2.0, and it’s widely available. You can learn more about this at http://netpromotersystem.com.

    Thanks for a thoughtful post!

  • BY Jason Mogus

    ON June 14, 2012 12:47 PM

    Great post and I’m glad this idea is popularizing in the sector also as it’s a very simple yet powerful metric. A number of my colleagues are trying to popularize its use within larger membership oriented NGO’s. How many “members” (which often really means either donors or email list members, sometimes even social media followers) actually feel connected to the group they subscribe or give to? Why do they take action or why not? What do they think about their work and the issues they focus on? Do they even remember signing up in the first place?

    Net Promoter is a powerful and scary way to determine the engagement and satisfaction level of supporters. If more orgs paid attention and aimed to improve this score, they would find they have much deeper relationships with their supporters, so when they come calling on them for help (with an action, donation, or to take real leadership on an issue) they are actually there.

  • BY Farron Levy, True Impact

    ON June 15, 2012 03:28 AM

    Another great contribution, Aaron.

    Indeed, the Net Promoter score can be a transformative tool for organizations.  On its own it offers crucial information that can help illuminate substantial opportunities for improvement.

    Meanwhile, its ease of implementation is an excellent example of how measurement doesn’t have to be hard.  Even simple measures, if well designed and smartly deployed, can yield substantial benefits for those seeking to demonstrate their value and drive continuous improvement.

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