Net Promoter Score and Sota Tek’s core value

Time flies, Sota Tek has kept the 100% growth rate for 3 years consecutively. In this year, 2018, we even surpassed 170% last year earning with more than 1 million USD in revenue. Looking at these numbers, I’m wondering “what about next year?”, “can it be that good?”. Actually, many Sotatekers and I always have a strong belief that Sota Tek will keep this pace to become the leading technology company in Vietnam and South East Asia in the future. But let’s set aside the subjective judgment, I really want to find a more convincible reason to maintain this growth rate. Recently, I’ve read a lot of books about startup and entrepreneurship, and I found a term used by many companies to measure the customer experience and predict business growth: Net Promoter Score (NPS). So what it really is?

What is Net Promoter Score?

It’s an indicator calculated by answering this question:

How likely is it you would recommend us to a friend?

Where:

Detractors (0–6): They’re disappointed in Sota Tek. There’s no reason for them to work with us again. Apart from leaving Sota Tek, they can even tell their friends about the bad experience they had with us, damage our reputation in the long run.

Passives (7–8): They’re temporarily satisfied but unenthusiastic customers who are vulnerable to competitive offerings. They’re still here mostly because they don’t have a choice for whatever reason. If there’s a similar offer (don’t need to be better), they’ll be willing to leave us to try it.

Promoters (9–10): One word, perfect! They are satisfied with our works, even beyond their expectation. These are loyal customers who are willing to recommend us to their friends.

Net Promoter Score = % Promoters — % Detractors

Why is it so important? Pros and cons?

You might have encountered this question before like after a trip with booking.com or Airbnb for instance. There could be many kinds of question in the customer survey form, but just this 1 question is fairly enough. How likely is it you would recommend us to a friend? Word of mouth is the best marketing method because it’s nearly free and viral in an exponential rate. It’s also how big companies like Facebook, Airbnb have grown to what they are today. If you pure your money to mass marketing when your product is not ready, sooner or later, your customers would leave or you run out of cash.

Higher the NPS (at least positive), more sustainable the revenue growth. A high NPS is a good indicator that the business can grow even more because it’s following the right direction and vice versa. The point is how to increase revenue and make customers happy at the same time. Promoters and Detractors are similar to Assets and Liabilities in the accounting balance sheet, you have to do whatever it takes to increase Promoters and decrease Detractors in order to grow.

You might have known about bad debt, but I wanna introduce you a new term “bad profit”. This is the profit gained by exploiting customers. For example, estimating the cost much higher than it really is will give you a good earning, but indeed, we’re losing our customer gradually. The customers are aware of it, but they still accept only because they don’t (or not yet) have another option.

One more example, if we consider employees are customers of an employer, so reducing their wages and welfare will make the company more profitable. However, this will make the employee feel unsatisfied in the long term and quit as soon as they can. In other words, the bad profit will increase the number of Detractors, so we have to balance or sometimes make tradeoffs between profit and customer’s satisfaction.

How is it relevant to the company’s culture?

If you see from a different perspective, there will be many kinds of customers depending on the role you take in your organization. For instance, if you’re working as an hr/admin staff, all other employees will be your customers. In that case, the NPS question would be:

How likely are you to recommend our company as a potential workplace to your friends?

Therefore, not only project managers, sales or founders are responsible for NPS but anyone in the organization, depending on the role you take. If everyone has the same mindset to always delight our customers, this company must grow!

In contrast, what would happen if there’s just one person disregards the NPS? Let’s recall the case about a project manager estimates a task that is much higher than the actual effort. When other teammates realize that even their boss doesn’t respect the customer, why do we have to take this job seriously? They won’t feel like they have to be responsible for the job, just act like a regular salaryman. They can leave the office without worrying about how bad their work is. In the long run, could this business grow?

So how to increase the NPS?

Doing everything for free is the easiest way haha. It’s true. If you’ve already given everything, there’s nothing customer can ask you for more. Let’s take Uber or Grab as an example. They make all of us happy by giving us discounts and free rides all the time. And indeed, they’ve grown super fast like no one can imagine. It’s almost impossible to find a crossroad in Hanoi without a Grab driver in the rush hours.

However, if we don’t have enough resources to give freely until we really succeed, we would be dead in front of the heaven’s gate. Hence, our ultimate goal should be satisfying customers with an affordable cost, not all cost. It means we mustn’t exploit our customer, but don’t sacrifice yourself for them.

The best way to increase the NPS is to continuously ask the question, analyze, find out what is missing and improve yourself. The quicker this loop is, the better. This loop is also mentioned in the book “The Lean Start-Up” of Eric Ries. Don’t just blindly believe in doing something that ends up worthless to the customers.

Ideas are easy, execution is everything.

Startups that providing goods and services to the end user (B2C) frequently develop the NPS function. One reason for this might be they have a large number of users so they can easily collect quick responses such as in a day, a week or a month. There is a quite interesting method that is Split Testing (also known as A-B testing, thanks Tung Dao for introducing me to this term) according to which we will form two different groups of customers and let them use two controversial versions of a function. After that, we combine analytics and NPS to estimate the conversion rate and the satisfaction of the users towards the function instead of keep on arguing.

However, it can be annoying to B2B corporation if we ask this question too frequently. Thus, the frequency of conducting the NPS survey may be reduced for example to quarterly, annually or at the end of several projects. To employees, the NPS may go with their ability assessment, etc

Besides the main question, you can add some others based on who the respondent is, a Detractor, a Passive or a Promoter, for example:

- What was missing or disappointing in your experience with us?

- How can we improve your experience?

- What do you like most/least about our functions/company?

- What is the one thing we could do to make you happier?

If not free then at least the lower the price the better, right?

This is not necessarily right. In fact, the experience of customers depends on many factors among which price is the most important one but not the only one. Experience means a process from the first interaction to the collaborating period, and to the finish, delivery,… and payment. If the customers are satisfied, they are willing to pay a higher price in exchange for the good experience.

For instance, around 2010, laptop and mobile phone retail stores were found everywhere because individuals could sell the goods even only through forums. However, gradually, people choose large retail chains like TGDD or FPT Shop instead because of high-quality customer care, warranty, and installment services. Another example is that recently, VinGroup’s real estate is normally more expensive than other investors’ but still attracts a great number of buyers. This is mostly because of their big brand name, but then what makes that name big? It must be the pleasant experience of buyers, says a dude who cannot afford a VinHome.

Thus, we should always keep the mindset of satisfying the customers at every step of the process. Lately, I listened to the Podcast Masters Of Scale hosted by Reid Hoffman (Co-founder of LinkedIn) in which there was an interview with Brian Chesky (Co-founder and CEO of Airbnb). In the interview, they discussed the way to improve Airbnb’s customer experience like following:

If you want to build something that’s truly viral you have to create a total mindfuck experience that you tell everyone about. We basically took one part of our product and we extrapolated what would a five star experience be. Then we went crazy.

- So a one, two, or three star experience is you get to your Airbnb and no one’s there. You knock on the door. They don’t open. That’s a one star. Maybe it’s a three star if they don’t open, you have to wait 20 minutes. If they never show up and you’re pissed and you need to get your money back, that’s a one star experience. You’re never using us again. So a five star experience is you knock on the door, they open the door, they let you in. Great. That’s not a big deal. You’re not going tell every friend about it. You might say, “I used Airbnb. It worked.” So we thought, “What would a six star experience be?”

- A six star experience: You knock on the door, the host opens. “Hey, I’m Reid. Welcome to my house.” You’re the host in this case. You would show them around. On the table would be a welcome gift. It would be a bottle of wine, maybe some candy. You’d open the fridge. There’s water. You go to the bathroom, there’s toiletries. The whole thing is great. That’s a six star experience. You’d say, “Wow I love this more than a hotel. I’m definitely going to use Airbnb again. It worked. Better than I expected.”

- What’s a seven star experience? You knock on the door. Reid Hoffman opens. Get in. “Welcome. Here’s my full kitchen. I know you like surfing. There’s a surfboard waiting for you. I’ve booked lessons for you. It’s going to be an amazing experience. By the way here’s my car. You can use my car. And I also want to surprise you. There’s this best restaurant in the city of San Francisco. I got you a table there.” And you’re like, “Whoa. This is way beyond.”

- So what would a ten star check in be? A ten star check in would be The Beatles check in. In 1964. I’d get off the plane and there’d be 5,000 high school kids cheering my name with cars welcoming me to the country. I’d get to the front yard of your house and there’d be a press conference for me, and it would be just a mindfuck experience.

- So what would 11 star experience be? I would show up at the airport and you’d be there with Elon Musk and you’re saying, “You’re going to space.”

The point of the the process is that maybe 9, 10, 11 are not feasible. But if you go through the crazy exercise of keep going, there’s some sweet spot between they showed up and they opened the door and I went to space. That’s the sweet spot. You have to almost design the extreme to come backwards. Suddenly, doesn’t knowing my preferences and having a surfboard in the house seem not crazy and reasonable? It’s actually kind of crazy logistically, but this is the kind of stuff that creates great experience.

With the same matter of checking in of new employees, SotaTek has once been very confused. For example, after an employee arrived at the office, the company then started to prepare his personal computer, which took him several hours of waiting. When the pc was ready, then the employee started to create his company accounts without knowing yet which project he was in or who was his manager. Even after he had joined the project, he had nothing to do! This was because the project manager was not aware of his existence so prepared no plan for him. Having to set up the working environment without any guide took him an or some other days. There was more than one time the new employees claimed to me in their personal assessment that when they first came to our company they felt quite confused but gradually they felt happy instead.

So, how a 6 stars experience is like?

After a week of preparation, the employee comes to the office at 10h of the first working day (to make sure everyone has been present). Once he knocks the door, a pretty HR staff welcomes and takes him to his seat. On his desk, the pc and other office stuff are ready in a neat way: A filled glass of water, a small branch of flower (for woman), a new uniform, a sheet of paper with all necessary information such as accounts and passwords inside an envelope clearly stated “To Mr. William, because you deserve!”

Then, the HR staff does not forget to remind him of his administrative duties and introduce him to his direct manager. Now, the journey begins.

Conclusion

Not sure if anyone reads through this part lmao.

Actually, this blog is the combination of the agreed opinions of our whole founding team. Really hope that every SotaTeker can change their mindset of working so that we will together build the core value of SotaTek which is Always delight the customers. Besides, anyone goes through this blog may find it useful or entertaining (what???) for your job.

Whether SotaTek can grow or not mostly relies on your delighting effort. Awesome! — Said Tommy.

Took a cup of coffee today and then could not sleep, but I won’t be awake all night without doing something valuable to the society haha. Oh talking nonsense now, nevermind, everyone.