Do you or your employees regularly analyze your veterinary hospital’s business metrics? While you may be analyzing client information and patient charts, business metrics might be more challenging to understand. This is one of the reasons why we provide business health reporting to all of our customers.
When we help our customers analyze their business data, we look at 9 key different metrics – one of which being the Net Promoter Score.
What is a Net Promoter Score (NPS)?
“The Net Promoter Score is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. It is used as a proxy for gauging the customer’s overall satisfaction with a company’s product or service and the customer’s loyalty to the brand.”
To put it simply, a Net Promoter Score is a reflection of your company through your client’s perspective. According to Bain & Company, the creators of the net promoter system, businesses with long-term profitable growth have an NPS twice that of an average company.
Think of the NPS as a diagnostic measurement for how healthy your business is at any given time. The higher your NPS score, the healthier your business. If your NPS score starts to dip, that may mean that there are certain business tactics that are making your business “sick.”
How Does the NPS Work?
“On a scale from 1-10, how likely are you to promote this business to a friend?”
This question is the ultimate question for any service business to help gauge how satisfied their clients are. By establishing a simple scoring system, businesses are able to easily quantify something that might otherwise be subjective and difficult to calculate. The quantification of your client’s opinions allows you to incorporate their feedback into building better processes, products, and services.
With the NPS system, your clients are categorized into three different groups: Promoters, Neutral, and Detractors.
- Promoters: These individuals are clients who sing praise for you to their friends and family. These are your most loyal clients, coming in frequently and recommending you to other people. More than 80% of business referrals come from people within this category, according to Bain & Co.
- Neutral: These individuals are what Bain & Company refer to as “passively satisfied.” These individuals have no specific devotion or distaste towards your business. A good deal or promotion from a competitor may be enough to pry these clients away easily. Clients within this category are 50% less likely to repurchase than your promoters.
- Detractors: These individuals are clients who have had a negative experience with your services. Remember the “80% of business referrals coming from promoters” figure? For detractors, it’s the opposite: 80% of negative word-of-mouth discussions and reviews come from this crowd.
Calculating an NPS is simple – subtract the percentage of detractors from the percentage of promoters. All neutral individuals are disregarded.
To use this in a more practical method, consider this scenario:
Let’s say in one month your practice sends out a satisfaction email to clients that have been your client for 6 months and you receive a good portion of those surveys back. After crunching the numbers, you saw that 87% of clients who returned surveys fell into the promoters range, 10% fell into the neutral range, and 3% fell into the detractor range.
With those numbers, your hospital’s NPS calculation would look like this:
How Can the NPS Help My Business Grow?
Now that you know how to figure out your NPS, what exactly do you do with it? To clarify this relationship – let’s go back to Bain & Company’s theory behind the NPS. Their goal was to establish a correlation between NPS and company growth. To do so, they identified the relevant competitors in their business and measured their scores as well.
“These relative Net Promoter Scores were then correlated with organic growth measures. In most industries, Net Promoter Scores explained roughly 20% to 60% of the variation in organic growth rates among competitors. On average, an industry’s Net Promoter leader outgrew its competitors by a factor greater than two times.”
The research that Bain & Co. found regarding company growth rates and their high NPS is just one of the reasons why veterinarians should pay attention to their clinic’s unique score. Using tools that can help you track these metrics, such as the PetDesk dashboard, is a good way to proactively handle any issues clients may have and encourage positive reviews.
When proactively monitoring your NPS, we recommend setting up a process in which your staff monitors reviews on a daily or weekly basis. Since we understand the importance of proactively monitoring reviews, the PetDesk tool offers email notifications whenever a neutral or negative review comes from a net promoter survey. You can use this as an opportunity to let clients know that their concerns have been heard, and you will work through any of the issues that they may have had during their experience with the clinic. This type of personal touch is what helps increase your NPS and can help make clients happy.
With proactive support, strong customer service, and a unique approach to contacting your clients, you’re bound to see happier customers, and in turn, your NPS tick upward. As your NPS score rises, you’ll see more referrals, happier clients, and an uptick in business.
Interested in learning more about PetDesk’s reporting capabilities? Schedule a time to chat with one of our practice management consultants.