Implementing an eNPS – Why You Should Treat Your Company Like a Product

I know what you might be thinking after reading the title. Just give me a chance and hear me out. We in the tech space have gotten very good at creating, building and maintaining products, but sometimes when it comes to developing and satisfying our talent, we don’t take the same tenacious approach. So why not apply some of what we do in the product spectrum to how we manage our people?

What is the (e)NPS?

Let’s start by reviewing a term those in the SaaS (software as a service) space have heard all too many times. That’s right; I’m referring to the infamous NPS. The Net Promoter Score has traditionally been a KPI adopted by leading global companies to measure customer loyalty for a product or service.

Its simplicity is what makes it such a useful instrument. The NPS survey asks only two basic questions:

  • How likely are you to recommend Company X to your friends or family on a scale from 0–10)?
  • How can Company X improve that score?

In conformity with the NPS, the answers are then divided into three categories:

0–6 = "Critics" or "Detractors"
7–8 = "Passives"
9–10 = "Ambassadors” or "Promoters"

A derivative to the NPS is the eNPS — employee Net Promoter Score. While the NPS is commonly used for companies to receive feedback from their clients on how they are doing and how they could improve, with the eNPS, a company asks their employees for feedback. Important to note: this score can be substantially lower than the customer score, because employees have higher standards than customers.

Why Do We Do It?

Let me start by introducing two of our core values at Yieldr. One of our core values is Iron Sharpens Iron, which stands for improvement by giving and receiving feedback. Another one is, the User Leads, which means that in the end, it is the end user who will be using our product and therefore we should reason from the user’s perspective and base our decisions on this.

In this case, the end users are the employees and the company is the product. The eNPS — as a guiding tool to measure how we as management are doing and where to improve — has proven to be very powerful in determining our priorities and improving our office culture.

Why is Employee Loyalty Important?

While on the topic of NPS, it makes sense to also discuss employee loyalty. There are many reasons why employee loyalty matters, but two of the most important ones are:

  • Loyal employees care more about the organization and work harder
  • Loyal employees stay with you longer

Both reasons have a direct effect on the bottom line profits of a company. When employees work harder, they are more productive and generate more output. When employees stay longer, employee turnover is lower and less time and money is spent on recruiting and finding replacements.

According to Recruiterbox, the cost of hiring a new employee can be as much as over $5,000. And if that new employee is a bad hire? That could set you back anywhere from $25,000-$50,000! These numbers don’t even take into account the cost of a disgruntled incumbent employee, so it’s extremely important to have a happy, motivated workforce.

Putting the eNPS to Practice

Coinciding with our focus on office culture, we started measuring our first eNPS score in Q2 2016. We scored a -11% on this first survey. This did not come as a surprise as we knew there was a lot of work to be done. What was more interesting to read was the qualitative feedback we got.

It helped us to understand what topics were behind the reason for this “low” score and what we needed to do to improve. This helped us know where to steer our efforts. For example, improving the compensation framework and target setting, internal communications and personal development were some of the subjects mentioned.

Here are some happy Yieldrs (and maybe one skeptical one :P) on their way to SaaStock as part of their personal development.

From there, we started making gradual improvements. We reworked our compensation framework, including implementing a new more transparent bonus structure. We continue to experiment and tinker with our internal communications by testing things such as internal newsletters and conducting more All Hands meetings. One of the initiatives we’re most proud of to come from our eNPS is our personal development plans. You can read all about it in one of our previous posts.

As time goes on we’ve continued to make incremental improvements, and we’re proud to have improved our eNPS to +21. Well that’s a marked improvement from when we started, you’re probably wondering what kind of score that is. We had the same question ourselves so we looked within our industry for some comparisons.

What Are the Scores in the Market?

As you can imagine, this sort of information isn’t so easy to come by. However, we were able to find one baseline. We found the alleged eNPS scores of the following tech companies:

eNPS Scores
Snap 57
Facebook 53
Alphabet 42
Airbnb 37
Microsoft 18
Twitter 5
Apple 3
Amazon 1
Cisco -5
Uber -20
Oracle -31
IBM -33
HP -35

Given our current score of 21, that would place us among the top 25% (according to what we found in the market), ahead of Microsoft, Twitter, Apple and Amazon. Not a bad place to be if you ask us :p In all seriousness, we understand that these figures are arbitrary at best, but it was good to find at least some sort of measuring stick.

The important thing is to focus your concentration internally on your team. It’ll be very clear whether or not your people are happy. You just need to listen.

At Yieldr, we follow the philosophy of People, Product, Profit and in that order. Therefore, we pride ourselves in listening to our team and creating a dynamic, fun and empowering workplace. Thanks to the implementation of an eNPS framework, it’s become much easier to do so. You put numbers and metrics on your product(s). Why not try putting a number on your employees’ satisfaction too!

This article was originally published on Medium.

Boaz Shkolnik

Boaz Shkolnik