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How do you use Net Promoter Score in senior living: Follow these principles

Both within healthcare and outside of it, Net Promoter Score (NPS) is among the most reliable metrics of enduring consumer loyalty.

But what exactly does NPS measure? And how does it apply in the senior living industry?

This quick primer on NPS will help you understand how the measurement works—and why, for senior living leaders, it’s often so powerful.

NPS is relatively simple to derive.

It’s a measure of how customers answer a single question:
“On a scale of 0–10, how likely would you be to recommend [a given service or product] to a friend or family member?”

Based on their answer to this question, customers fall into three categories:

    As the name suggests, promoters are wildly enthusiastic about the business under consideration. They’re very likely to talk up the business to friends and family, they’re more interested in extras or add-on purchases, and—crucially—they’re the most likely customers to return.
    While satisfied, these customers don’t feel any special attachment to the business. If another offering comes along with comparable price or quality, they’re likely to defect. Their word-of-mouth will be lukewarm and subdued—if it’s there at all.
    These are a business’s actively unhappy customers. Not only are they unlikely to visit the business again, but they will also spread their negative impression of it to friends and family. Those who score closer to 0 may even go out of their way to air their grievances, online or elsewhere.

Clearly, the make-up of a business’s customer base—the proportion of promoters to passives and detractors—is an important indicator of business performance. That’s what NPS is designed to capture, as expressed in the following equation:

NPS = (% promoters) – (% detractors)

An (exceedingly rare) NPS of 100 is a perfect score, which means that every single one of a business’s customers is a happy promoter. An NPS of 0, on the other hand, means that every one of its customers is actively detracting from the organization. Most organizations will fall somewhere in between.

Why NPS matters

So far, NPS sounds straightforward enough. Its simplicity, though, belies its predictive power. In senior living, organizations tend to emphasize resident satisfaction when they’re evaluating customer attitudes. Understanding that level of satisfaction—as captured by standardized instruments and at-point feedback surveys—can be invaluable for improving certain aspects of service.

For business growth, however, resident-satisfaction scores don’t tell leaders what they need to know. Customer retention, customer acquisition, and profitability are much more strongly correlated to loyalty than they are to satisfaction.

And it’s not just the bottom line that benefits from NPS improvements. When judiciously applied, NPS can be used to improve both outcomes and operations, so long as leaders observe a few key principles.

Making NPS work in senior living

The case for NPS is compelling. Here’s how to make effective use of it in senior living.

    While the NPS model is statistically robust, it’s only as functional as its inputs. To ensure its validity, communities will need a large volume of responses.To that end, maximizing response rates is crucial, so surveys should be short. They should be delivered to residents and family members early, and at predictable intervals. And in the case of residents, they should be administered in media that are appropriate to the residents’ level of functioning. (Be mindful, for instance, of colors, font sizes, and devices that can be difficult for seniors to work with.)
    NPS scores can be revealing on their own. But examining them in isolation means missing out on powerful insights.Leaders can track NPS against other measures, like a resident’s clinical outcomes, or census growth over time. These can reveal new correlations that otherwise might escape leadership’s notice. A dip in NPS, for instance, may track with a dip in attendance at planned activities; a decline in admissions may have been presaged by an earlier decline in the number of promoters. Leaders can use such relationships to re-evaluate their approach to their operations.
    Finally, leaders should not neglect NPS’s power as an instrument of culture change.The categorical concepts behind NPS—promoters, detractors, and passives—are easy to communicate and to understand. Their simplicity can help to rally administrators and front-line caregivers around the objective of pursuing a better resident experience.Talking about consumers in these terms brings NPS to the forefront of everyone’s concerns. It builds a unity around earning consumer loyalty, which ultimately translates to more effective—and more empathic—care.

An essential part of the senior living intelligence portfolio

That’s the fundamental insight behind NPS: loyalty ultimately comes down to service.

Generating loyalty is about building sustainable relationships with residents. To cultivate those relationships takes a concerted effort at delivering consistently excellent experiences. Frontline care is a part of that; so is a community’s atmosphere. So are the organization’s communications with family members, its activity programs, and its dietary services.

NPS, then, provides a holistic measure of the quality of resident service—a measure in which every senior living leader should strive to excel.