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    How Your Net Promoter Score Could Influence Your Business


    Do you know what your MCO’s net promoter score (NPS) is? Or, perhaps the question should be, do you even know what an NPS is?

    Although more than two-thirds of Fortune 1000 companies are now using this metric to evaluate performance and customers’ brand loyalty, health insurers have been slower to get on board. Perhaps this is one of the reasons why the health insurance industry overall ranks 21st among 23 industries that receive an NPS. This ranking is based on the average NPS each company within a category receives. 

    “NPS can have an impact on the health insurance industry; it is incumbent upon us to understand what the score means,” says Darnell Dent, Managed Healthcare Executive editorial advisor and president and CEO, FirstCare Health Plans, Austin, Texas. “This metric can be a wake-up call if a company needs to increase member engagement.”

    NPS was developed by Bain & Company, Fred Reichheld, and Satmetrix, a provider of customer experience management software. Reichheld introduced the methodology in his 2003 Harvard Business Review article, “The One Number You Need to Grow.” NPS is calculated on a 10-point scale using responses to a single question: “How likely is it that you would recommend our company/product/service to a friend or colleague?” 

    “The NPS question is powerful because if something is meaningful enough for someone to refer it to someone else, then it shows that they have had a positive experience,” says Dent.

    NPS responses fall into three categories: 

    • Promoters. These customers have the highest rates of repurchase and referral. They give ratings of nine or 10 to the question.
    • Passives. These customers give ratings of seven or eight.
    • Detractors. These customers give a score from zero to six. 

    “When customers rate a company high on the scale, they are acting as references and putting their own reputations on the line,” says Jessica Sullivan, assistant vice president, brand and marketing management, FirstCare.

    Dent says promoters stand behind companies and often serve as champions for the brand. Satmetrix describes promoters as loyal enthusiasts who will keep buying and refer others, fueling growth, according to its website. 

    Although members in the passive group may be satisfied at a given time, they are labeled as an unenthusiastic group that is vulnerable to competitive offerings. “They may be happy at one moment because you fulfill a need, but they don’t have a real connection to your service or company,” Dent says. 

    Even though detractors may have been with a company for a while, they may score it low if something disappointed them recently. Satmetrix’s website describes detractors as unhappy customers who can damage your brand and impede growth through negative word-of-mouth.

    According to Satmetrix, as of 2017, health insurers as a group were only ranked higher than cable/satellite TV and Internet service providers for their overall average NPS. Within the health insurer category, Oakland-California based Kaiser Permanente ranked the highest.

    Next: NPS vs. CAHPS



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