Using NPS In The Construction Sector

Net Promoter Score (NPS) is a popular measure in many sectors, and is often treated as a de facto standard in customer research, one simple methodology that works the same for everyone. If only it were that simple!

If you work in the construction sector there are particular considerations that make the decision of whether to use NPS as your measure, and the details of how you use it, important to think about carefully. In this brief article we consider some of the things you should think about.

What is NPS?

In the NPS approach to customer loyalty we ask customers the question “On a scale of 0-10, how likely are you to recommend [COMPANY]?” and then categorise them into three groups: Promoters (9-10), Passives (7-8), and Detractors (0-6). The NPS itself is based on the difference between the proportion of Promoters and Detractors, so if you had 43% Promoters and 9% Detractors your NPS would be 34.

When’s the right time to survey?

We believe that most organisations need a combination of strategic (or “relationship”) and tactical (or “transactional”) research. Tactical research is triggered by a specific event and asks customers about their view of that one event, whereas strategic research asks them to take a step back to review the relationship as a whole.

The timing of tactical surveys can be tricky in the construction sector. Often journeys are project-based, and lead times can be very long, creating a potential Catch-22 that the feedback you get is either “too early to tell” or “too late to change”. Whilst it is important to survey after the project is completed, it’s also essential to include customer feedback (whether quantitative or qualitative) at key milestones throughout the project.

Who are your customers?

Customer needs vary, and the network of relationships between different businesses can often be very complex. It’s important to segment your customers based on project type and size, but also to consider all the different customer roles who have a view on your performance. Think about the entire “Decision Making Unit” - all the decision makers, influencers, and operational contacts that may have a say in future decisions about which supplier to use.

You also need to think about indirect customers, such as end-users and specifiers, whose views you need to understand even though they do not have a transactional relationship with you.

What’s the best question for NPS?

The recommend question is seen as standard, but in many cases it can seem strange to customers. Always think about whether the question will make sense to customers in the context in which you’re asking it. Is it the sort of product that people recommend? Who might the customer recommend to, other than their competitors?

Asking a Specifier whether they would ‘recommend’ can seem odd, when you could argue that by specifying that product they already have.

Mark McCall, TLF Research Client Manager

If recommendation doesn’t seem to make sense, a good alternative is to ask customers “If you could go back in time, knowing what you know now, how likely would you be to choose [COMPANY]?”

The other aspect to choosing the right question is finding the one that gives you the best prediction of future customer behaviour. The rationale for the recommend question was empirical work showing that it had the best correlation with actual behaviour, but this is not the case for every business in every sector. What is the question that best predicts the behaviour of your customers?

What sample sizes do we need?

It is a statistical fact that NPS needs large sample sizes to be reliable. That means that, particularly if you’re planning to link scores to targets and bonuses, you need to be confident that samples sizes are large enough to be robust.

I think the question that needs to be asked is whether you have a large enough customer list for NPS to work. Linking customer satisfaction results to bonuses in some way is really important and that is where a Customer Satisfaction Index (CSI ) can work better. If we have low sample sizes I would always try and use CSI, even as a second metric.

Mark McCall, TLF Research Client Manager

Act on feedback

The purpose of NPS is not just to measure how customers feel, but to improve the customer experience. It’s important that you act on the feedback you receive, and that you are seen by customers to be acting on it.

One single question cannot give you what you need to prioritise improvements, so make sure you include a range of other questions that will enable you to understand the drivers of NPS. This will be a mixture of rating scale questions (e.g. “Relationship with your account manager”) and factual questions about specific events (e.g. “Was this delivery on time, in full?”)

Choose a small number of Priorities for Improvement, create action plans to drive improvements, and communicate to your customers about the changes you have made based on their feedback. This shows that you value their opinions and are committed to providing the best service possible.

Use NPS to engage your colleagues

The NPS approach can sometimes meet resistance within your business, so it’s really important to make sure that the methodology is understood and accepted. NPS is often popular with the board, because of its reputation as a simple and effective measure, but can make less sense to account managers and operational staff.

Giving staff throughout the business the opportunity to challenge your approach not only helps to get them on board, but often leads to improvements in the detail of the survey process (especially when it comes to choosing the right customers to invite to take part). Your NPS survey should be seen as a complement to account management and an opportunity, not as something to dread.

The reality is that the headline metric itself is much less important than how it is used. If NPS is easily understood and drives positive improvements, then the measure works better than another that is more statistically valid but has less impact on change.

Mark McCall, TLF Research Client Manager

NPS can be an excellent tool for measuring and improving the customer experience in the construction sector. However, it requires careful implementation and ongoing commitment to acting on and communicating the results. Used in the right way, NPS can help you focus on customer needs throughout every project, however diverse they may be, and identify a clear path for improvement.