Learn what the client really wants
Tony Hartl, 40, is CEO of Planet Tan, which operates 13 stores around Dallas. The company is profitable, he says, and has roughly $10 million in annual revenue.
Hartl began using NPS in November 2007, hoping to better address a challenge that he has faced since founding the business 13 years ago.
"The success of tanning salons is heavily based on the customer experience," explains Hartl. "That's really the differentiator."
Think about it. Would a customer ever choose one salon over another because it uses a particular brand of tanning bed? No one cares. But finding that service edge can be elusive. Tanning salons tend to be staffed by wet-behind-the-ears employees who aren't always polished at customer relations. High employee turnover, endemic in this industry, adds to the problem. In the past Hartl tried to gauge customer satisfaction using a lengthy e-mail survey. It required roughly 30 minutes to complete and featured such questions as: How much are you willing to pay for a membership? What radio station do you listen to? Hartl sneaked in the questions, hoping to learn where to advertise to reach his target market. The response rate was a paltry 3%, yet his staff was overwhelmed by the feedback.
"All this raw data created paralysis," says Hartl. "People were left wondering, How does this apply to customers anyway?"
He has since discontinued the offending survey in favor of NPS. Launching the new system was easy, he says. Training for his staff consisted of a half-hour PowerPoint presentation, developed in-house.
There was no need to retain Bain. Sure, the consultancy has a thriving NPS practice, serving the complex needs of large clients like GE. But the average entrepreneur can learn everything necessary to launch NPS by talking to peers, going to a conference, or simply reading The Ultimate Question, as Hartl did.
Last fall Planet Tan e-mailed that single question ("How likely is it that you would recommend this company to a friend or colleague?") to 11,695 of its customers. The response rate was 11%. The various rankings, from 0 to 10, were tallied, and the company arrived at its NPS score: 66.
"Everyone just got it. Here's a single number that can go up or down, depending on interactions with customers," says Dawn Byers, 32, a Planet Tan executive who worked closely with Hartl to introduce the metric.
Next step: The company divvied up the detractors among the managers at its various locations. But implementing NPS required some effort. Sometimes it took Planet Tan managers three or four phone calls to reach a detractor.
"For small businesses with limited resources, going after all this data can be time-consuming," says Vikas Mittal, a marketing professor at Rice University's business school who specializes in customer-satisfaction issues.
"Sure, it takes some time," allows Byers. "But the benefits so outweigh the time spent."
The feedback proved illuminating, she says. For example, Planet Tan received complaints about the way its fee is structured. The company sells its customers credits, redeemable for tanning-bed time. Some said it was confusing, not unlike being on a cruise ship where you never know how much anything costs in actual dollars. As a consequence, Planet Tan now offers a simple monthly membership.
Survey detractors also said they were less than enthralled by the experience of leaving a Planet Tan salon. Sure, the staff was all smiles and chitchat when customers arrived. But following the tanning sessions, those same customers felt lucky to get a goodbye. The staff was totally focused on new arrivals.
That consistent beef led Hartl to introduce a new policy he terms "post-tan affirmation." As someone exits, employees are now required to say things such as "You got some good color today" or "Can I offer you moisturizer?"
During the first months of 2008 same-store sales have risen more than 15% year-over-year, according to Hartl. This, in a tough economy. He attributes the results partly to various moves made in response to the NPS data. Planet Tan will be doing another NPS survey this summer. Hartl is hoping to hit 70.