GUEST EXPERIENCE
Should resorts seek to increase Promoters or decrease Detractors? It depends on how you play the percentages. MANAGE NPS BY THE NUMBERS
By Scott Hannah, President, Guest Research, Inc.
Increase Promoters, or Decrease Detractors? The most important decision a business should make is whether to focus resources on increasing the percentage of Promoters or decreasing the percentage of Detractors. Either strategy can lead to increases in your score and incremental business, but the more successful strategy is the one that pursues the larger opportunity. Most guest experience initiatives impact one strategy or the other, and each strategy requires different executional tactics. On the one hand, increasing Promoters is achieved by delivering consistently excellent experiences to your guests throughout their visit and across visits, emotionally engaging them, and wowing them. On the other hand, decreasing Detrac- tors is accomplished by eliminating hassles, defects, and frus- trations from the guest experience and recovering with them. Determine the optimal overall strategy. How do you decide which strategy is optimal and affords the greater overall growth opportunity for your ski area? Start by looking “under the NPS hood” at the percentages of Promoters, Passives, and Detractors. Know that Detractors will hurt you more than Promoters will help you: one Detractor offsets the value of 3-9 Promoters. So, we recommend you first consider the percentage of Detractors, and apply our rule of thumb: If the percentage of Detractors is 10 percent or higher, you should focus on reduc- ing the Detractor percentage. If the Detractor percentage is less than 10 percent, you should focus instead on turning Passives into Promoters, so they are not just satisfied, but also loyal to your ski area.
The genius of the Net Promoter Score is that it measures, with one number, consumers’ likelihood to recommend a brand. And that’s hugely important, as this correlates with consumer behavior better than any other measure. The effectiveness of NPS has made it by far the most popu- lar predictor of top-line revenues today. It is, as Fred Reichheld, the father of NPS, argued in his 2003 Harvard Business Review article, “The One Number You Need to Grow.” However, to be most effective, companies must first break it down into its three loyalty categories, and then prioritize those categories. Let’s start at the beginning: The NPS system rewards a brand for creating Promoters (those responsible for most of a brand’s repeat and referral business), and penalizes it for Detractors (those who provide minimal repeat and referral business but are responsible for 80 percent of negative word of mouth and negative social reviews). Between the two are Passives (those customers who neither build nor damage your brand). A 10-point rating scale enables you to track your Promoter (Likelihood to Recommend ratings of 9 and 10), Passive (ratings of 7 and 8), and Detractor (ratings of 1 through 6) percentag- es. NPS is calculated simply by subtracting the percentage of Detractors from the percentage of Promoters. The question is, what is the optimal strategy to increase your NPS? The answer should be based on not only the overall Likelihood to Recommend score, but on the actual percentages of Promoters and Detractors and the scores for specific guest experiences across the resort.
NET PROMOTER SCORE ACTION GUIDELINE
If Detractors > 10%, Decrease Detractors
Passives
Detractors
Promoters
If Detractors < 10%, Increase Promoters
Source: Guest Research, Inc.
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