What’s the one number you need to grow?

by Sam Booth
Published on December 2020

Recently, we sat down to talk with Dominic Monkhouse of Monkhouse & Company, a business coaching team working with some of the world’s best leaders. We talked about Dom’s time at Rackspace and his championing of NPS, which is a tool we’ve had great results with at Just After Midnight. 

The reason we wanted to set this up – besides Dom’s own fascinating story – is that with all the growth we’ve enjoyed in recent years comes even more emphasis on providing the very best for our customers.

This interview should provide great insights for any teams considering NPS and for those looking to take their NPS efforts to the next level. 

Sam Booth and Dominic Monkhouse

 

Just to start off, for anyone who might not know, can you outline what NPS is?

Sure, so the basic definition of NPS, net promoter score, is it’s simply the question – on a scale of 0-10, how likely are you to recommend X company? 

It sounds simple, but it’s an incredibly powerful tool for a lot of reasons, which we’ll get into.

OK, great, so now that’s out the way, can you tell us a little about you and how you got started?

Well I joined Rackspace as employer number 120, when they were an IT/internet infrastructure company. I started up the UK business and took it to about £30M and 150 employees within five years.

Left that, did a turnaround at another managed service provider.  After that I set up Peer 1 Hosting, another IT infrastructure/managed services provider, took that to £30M in the UK and $200M globally.

And how this links to net promoter score is, well, around 2004 Fred Reichheld published his HBR article The One Number you Need to Grow – which was NPS.

And at the same time, at Rackspace, I’d been tasked with engaging customers and employees across the world.  And I picked up Fred’s idea and implemented it.

What was it about NPS that made it so attractive, so well suited to fulfilling that role at Rackspace?

Well before NPS, you had a lot of people working with these long, meandering questionnaires with 50+ questions that resulted in all these frankly useless graphs and non-insights.

You know you’d run through all this stuff and eventually get a number like 3.461, and you’d think, OK, well is that good? What do I do with it? There was a whole industry around it. You did it because it was what people did. 

But with NPS it was the simplicity.  Would you recommend X to a friend? On a scale of 0 – 10?

They were really building on the work that HP and Xerox had done on the principles that happy customers spend money and happy customers make more happy customers. But NPS went even further.

It used to be that we thought anyone who gives above a 5.1 would make a recommendation but what they discovered is that actually people who give you 5s and 6s hate your guts and people who give you 7s and 8s couldn’t care less.  It’s only people who give you 9s and 10s who are worth anything from a promoter perspective.

And how did that play at Rackspace?

Well it was an interesting time because our masthead statement went from, ‘we want to be the world’s number one managed service provider,’ something kind of intangible, to, ‘we want to be the Ritz Carlton of managed services.’ And this was at a time when Ritz Carlton had just won The Malcolm Baldrige National Quality Award in the US. 

And we just looked around and it seemed to be NPS was what the people who really wanted to go from good to great were using.

That’s interesting you mentioning that framework of good vs. great.

Yes, I think one of the most important things about NPS is achieving that cultural change, it’s not so much about what number you get, although of course that can be very important. 

But what’s more important is making that distinction between saying, OK, we’re going to get some feedback from our customers and we really want them to say nice things about  vs. actually, what we want to know is why they’re not recommending us or what they’re not happy about.

Because you can use criticism to drive change, whereas praise, well if you’re being praised, you just keep doing what you’re doing, don’t you? So it’s about saying we’re actually looking for criticism because we want to be better.

What are your thoughts on ENPS? Which, for people who don’t know, is where you put that question to your employees.

Well that’s another interesting question. Julian Birkinshaw at the London Business School believes that the question is really would you recommend your manager, because it’s your manager that really accounts for your level of engagement with the company. 

It’s actually very easy for people to say they’d recommend the business but if you want to know how engaged they are – which is really what ENPS is for – you’re better off asking how likely are you to recommend your manager, and there’s all sorts of questions now that have been developed which are really about your manager without saying so.

So you’re a big proponent of NPS, obviously. And we’ve got great value out of it at JAM. But are there situations where it’s not applicable?

I do think it’s great but I’ll say this. When I speak to people who it hasn’t worked for, they haven’t read the books, and often they haven’t even read the original Harvard Business Review article.

You know they’ll do things like change the question and say, ‘well we just changed the question because we thought our question was better.’

And I’m just like – ‘why?’

We’re coming to a close, and we’d like to ask you what are the top 3 things you should do starting out with NPS. 

Well what I would do is a relationship NPS. I would set out to do whatever’s the smallest amount of customers you need to cover to cover 50% of your revenue. And don’t send the email just ring them up. And the number is what it is. 

Another thing is if you get a 9 or a 10, have your new business team call them up and say, ‘thank you for giving us a 9 or 10, is there anyone else we should speak to?’ And you know even if you don’t get a referral you can say, ‘why did you give us that 9 or 10?’ And then you’re just armed with new conversations. 

And you can reach out and say we called you because you’re the sort of company facing the same challenges they were, then you know what works. 

And lastly, as we’ve already touched on, just read the books. Or least the original article The One Number You Need to Grow by Fred Reichheld.

Want to find out more?

If you want to learn more about Dom and his work with business leaders, check out Monkhouse & Company. Or, if you’re interested in managed cloud or 24/7 support from a company that really listens, just get in touch.

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