Acronyms are an alphabet soup that, at times, leave us scratching our heads trying to remember what they stand for. One such acronym you might have heard being repeatedly used by insurance carriers is “NPS,” which stands for Net Promoter Score. Why is this acronym an important one to remember? An insurer’s NPS is a key measure to understanding customer satisfaction.
In the insurance industry, customers typically have multiple interactions across many different departments within a brokerage or insurer. In marketing and operations jargon, the sum of these interactions is called a customer journey. During each step in the customer journey, a customer’s experience will determine whether they have a positive, neutral, or negative perception of a business.
A positive perception of your business means increased customer retention and referrals, resulting in customers who are your fans and promoters. A neutral or negative perception likely results in the opposite – lost business and negative word of mouth.
How is the Net Promoter Score (NPS) Determined at DAS?
At DAS, we identified the critical steps in a customer’s journey as our Legal Advice Helpline, our Claims Department, and our panel law firms. For the legal advice and claims touchpoints, customers received an online survey, with the following question to measure their satisfaction and to determine the NPS:
Based on your experience, how likely are you to recommend DAS to a friend or family member?
(0 = very unlikely and 10 = very likely)
Each quarter, we take all the responses to the above question and apply the formula below:
As you can see above, an NPS is a tough measure because a score of 9 or 10 is required before a customer is identified as a promoter who has had a positive experience.
What is DAS Canada’s Net Promoter Score?
As of the first quarter of 2017, our Legal Advice Helpline had a NPS of 45 and our Claims Department historically trends even higher. We will soon launch another survey to determine satisfaction with our customer’s assigned panel lawyer.
Is an NPS of 45 a good result?
Unfortunately, there is no single governing body that provides a universal benchmark for standard Net Promoter Scores. As a result, we look to various whitepapers published by consulting houses for industry standards. Our research has shown that the average NPS benchmark for P&C insurers is between 30 and 40. Despite our high NPS, we make ongoing efforts toward achieving an even higher score, which in other industries can average between 60 and 70.
This is why NPS matters. It is a means to measure and ensure continuous improvement to a customer journey. Our goal, like your brokerage, is to continue to provide high quality customer service and to deliver the best possible customer experience during every step of their journey.