NPS inner loop

A beginners’ guide to the Net Promoter System®

Divya BhatDivya Bhat | August 29, 2016

The Evolution of the Net Promoter System®

There’s no denying that the Net Promoter Score® is a hero when it comes to measuring Customer Loyalty. In fact, it has been one since it entered the picture in the early 2000s. But with the explosion of NPS’s popularity, the concept began to evolve in its scope rendering it much more able and powerful than just a score that informs you how likely your customers are to recommend your brand to their friends! Consequently, the concept of NPS has become more of an all-encompassing system from the “ultimate question” that it set out to be. So much so that the NPS is now being referred to as the Net Promoter System®. And in this post we’d like to share with you the two pillars that could drastically enhance your Net Promoter System®, if followed through effectively – the Inner Loop and the Outer Loop.

The two pillars of an effective Net Promoter System®

In the most simplistic sense, the inner loop comprises all the individual-level interactions, learnings and changes that occur within the Net Promoter System® while the outer loop deals with all the macro-level changes and learnings. The very fact that an effective NPS calls for the involvement of employees at the micro as well as macro level indicates that it has to be a pan-organization effort. Net Promoter Score has come a long way since 2003, from being a metric to measure customer loyalty to becoming an entire system to measure, improve and promote customer experience.

THE INNER LOOP

The inner loop of the Net Promoter System® deals with everything that occurs at the individual-level feedback. The feedback that comes from a customer goes directly to the concerned employee who can not only work on this feedback and inform the customer that the issue has been addressed but also learn from the feedback to improve his/her own performance as a customer-facing employee.

But the implications of the inner loop don’t stop there, at the individual-level; The essence of the learnings that occur in the inner loop is just as applicable to those who are not directly in contact with the customers, but are involved in making several customer decisions – like employees in pricing, product design, or even R & D.

How can employees become better decision makers with NPS®?

Specific, granular data is the focus of the inner loop as this can help the employee identify the cause for the feedback (whether positive or negative) and learn from the customer’s feedback. But this will not prove effective unless done in real-time. The feedback that’s coming in from the customer must reach the concerned employee or the department immediately for the feedback loop to be closed in as little time as possible, which in turn is vital for the entire NPS model to be effective. Immediate & Specific are keywords when it comes to the success of the inner loop.

The concept of Inner Loop is beautifully explained, in a nutshell, by Rob Markey, Partner, Bain & Company. Check out the link HERE!

THE OUTER LOOP

Everything relating to the Net Promoter System® that happens on a more organization-wide level will fall under the purview of the Outer Loop. In other words, strategic changes like policies, resource allocation, pricing, etc will comprise the Outer Loop. This is vital to the Net Promoter System® in that it allows customer feedback to get out of departmental silos and become relevant to the entire organization wherever applicable. In case of a situation where a certain brand faces repeated negative feedback on a particular aspect or staff member, then it becomes an “Outer Loop” issue. It is no longer something that can be addressed by an individual manager or an employee but the intervention of the management is necessary to rectify the issue.

Contrary to the Inner Loop, the Outer Loop concerns itself with things that are macro and generic to the organization as a whole; which naturally means that unlike the inner loop which encourages rapid learning and changes, the outer loop is a more systemic and slow-working one wherein changes are implemented with a
top-down approach. Leaders recognize, prioritize and address opportunities that involve the entire organization and make sure that the stream of communication is constantly flowing which keeps the trust and loyalty within the organization strong.

Check out this video by Rob Markey where he discusses the Outer Loop.

In a nutshell…

There is no denying that the best mechanisms in the world involve the micro and the macro working in tandem. When the Inner & the Outer loop work hand in hand, addressing customers’ constructive feedback either directly & immediately or indirectly and gradually, the force of the Net Promoter System® is unstoppable. A solid NPS will fetch you heightened returns as proved by the many companies that have vouched for the efficacy of the Net Promoter Score & System.