Growing Your Healthcare Business Using Net Promoter Scores (NPS)

Lobbie staff
April 1, 2022
More and more, patients are taking control of their relationship with healthcare providers and the services they offer. The COVID-19 pandemic has accelerated this trend by putting the majority of the population online and has made providers and patients familiar with various internet-based tools that help provide access and information for most aspects of healthcare workflow and interaction.

As a result, one area that is becoming critical to the business of healthcare is patient loyalty and its impact on online referrals and ratings, and ultimately the bottom-line. When patients need care, it’s critical for the growth and reputation of your healthcare business that the patient experience is as positive and successful as possible.

Regardless of what industry you’re in, it’s important to remember that you’re engaged in customer service at every level. In healthcare, those customers are your patients, and you are “selling” optimal care that is delivered in a way that is as effective and seamless as possible. With that mindset, you can use data to find ways to improve the customer experience Whether it be improving the way they are greeted at intake all the way to making the discharge experience hassle-free and even, in some instances, celebratory.

One of the most effective ways to consistently measure your patient experience and loyalty is by utilizing a Net Promoter Score (NPS), an important tool for health providers to use in order to measure and improve your customer's experience and communication post visit or treatment.

The impact of healthcare NPS drivers (e.g easy access to information and service, privacy, and a comforting and caring patient-doctor interaction) cannot be understated in their impact on patient loyalty, Your referrals are the ultimate test of service value and patient care. They are also the number one indicator of company health and your future growth rate. And for healthcare, loyalty reflects a customer's experience of service delivery, which is even bigger than the company's bottom line... It is also critical for patient wellbeing and outcomes.

What is a Net Promoter Score (NPS)?

NPS is a gauge of the strength of your relationship with your patients. How loyal they are tells you a lot about how they’ll behave in the future. Will they be open to new marketing? How compliant will they be with their care plan? How powerful is their word of mouth?

Specifically, NPS is a loyalty metric that measures how customers answer a single question:

“On a scale of 0–10, how likely would you be to recommend [SERVICE/PRODUCT] to a friend or family member?”

Based on their answers, consumers can be placed in categories as Promoters, Passives, or Detractors, with specific future behaviors.

A Net Promoter Score (NPS) is a single-question metric that measures how your organization and its services are perceived by your patients. Data collected via Net Promoter Score can indicate how satisfied and loyal your patients are. A strong healthcare NPS shows that your patients are noticing delivery efficiency and quality of care.

NPS surveys are quick and straight to the point, asking one question: How likely are you to recommend company X/product Y/service Z to a friend or colleague? Using a rating system of zero to 10, customers fall into one of three categories:

  • Promoters (9-10): These customers rate their experience either a 9 or 10. They are  typically the most loyal and will continue to utilize your services and products. More than that, they would recommend your organization and services to others, which ultimately contributes to your company’s growth. Every health care business wants loyal patients who are happy to refer other clients, so the goal is to attract and retain as many promoters as possible. Promoters are drivers for growth and increased revenue, and as they are already satisfied customers, they are usually open to hearing from you more often. “The threshold for Promoters is high,” Gwin says. “They have to provide a score of 9 or 10 on this question. These Promoters display all the behaviors that you want to see from your customers: they’re more likely to come back, they’re open to new services, they promote your system in a way that creates more Promoters, and their feedback makes you even better.”
  • Passives (7-8): They rate their experience a seven or an eight. Customers in this group are satisfied. They are a concerning group because they could churn to a competitor even though they expressed a generally positive view of your company. Although passive responses are not included in the calculation of your healthcare net promoter score (NPS), identifying indifferent customers is an essential step in the process. If patients are on the fence about the quality of your services, they are more likely to leave you for a competitor or regress to a detractor in your next survey.
  • Detractors (0-6): These are unhappy customers that rate their experience from zero to six. They would not likely refer a friend or colleague. Worse, they could potentially hurt your organization’s brand through online reviews and other social media or negative word-of-mouth, etc. The good news here is you have identified problems and can now set goals—both internally and externally—to enhance and improve patient experiences. You can also reach out to the customers and  dig deeper or communicate changes as they occur. Detractors are dissatisfied customers, and dissatisfied customers are bad for business. NPS surveys identify unhappy customers early, allowing you to reach out and offer support before they slow your growth with negative word of mouth and online reviews.

How is NPS calculated?

Once you have collected the scores, it is time to calculate your overall score. Based on your calculations, you will receive a percentage for each set of respondents (Detractors, Passives, and Promoters). In calculating your Net Promoter Score, ignore the percentage of passive results and subtract the percentage of detractors from the percentage of promoters:

(Number of Promoters – Number of Detractors) / (Number of Respondents) x 100

This means your NPS Healthcare rating can range between -100 and +100. However, it’s unlikely your respondents will be made up of just promoters or detractors, so somewhere in between is more likely. For example, if 70% are promoters and 20% are detractors, your net promoter score will be 50. The average healthcare provider net promoter score is known to be around 38, but NPS benchmarks vary across the country and industry.

Why are NPS surveys important in healthcare?

NPS provides a benchmarking tool that is continually being updated as new responses are received so you can track patient perceptions, benchmark against internal and industry averages, and monitor progress over time. This allows organizations to make operational and service improvements, or add products and treatments that can increase patient loyalty and referrals that ultimately grow revenues. NPS has even been shown to help provide better health outcomes for your patients.

Net Promoter Scores can grow your business

The goals for growing your business are relatively straightforward: Attract patients and retain them. NPS can be a key metric in that effort by providing a steady stream of feedback about how your customers feel about your company, so you can address any issues to improve satisfaction and loyalty. But NPS’ ability to help attract new customers extends beyond growing your business through pure referrals. When you take actions that continue to improve your business, it can build buzz that draws even more customers. Further, NPS helps your staff see the bigger picture in regard to how your company is doing over time and in relation to your competitors.

There is clearly a correlation between NPS scores and increased business growth. The London School of Economics studied this relationship and discovered that “an average NPS increase by seven points correlates with a 1 percent growth in revenue.” Another study by Temkin Research showed that promoters are 4.2 times more likely to buy from the same company again, 5.6 times more likely to forgive a company after a mistake, and 7.2 times more likely to try a new offering compared with detractors.

NPS sounds straightforward enough, but the simplicity does not reflect its predictive power. Most healthcare organizations tend to focus on patient satisfaction with their care encounters. Research indicates that satisfaction is not the same as loyalty, and satisfied customers will still defect. NPS provides insight into both growth and improvement. Customer retention, customer acquisition, and ultimately margin improvement have stronger links to loyalty than to customer satisfaction.

By analyzing all the factors that contribute to your net promoter score, you can:

  • Pinpoint problem areas for improvement
  • Identify gaps in the market for new products and services
  • Reach out to supporters for reviews and referrals
  • Prevent customers switching to an alternative provider
  • Ensure staff, providers and partners are engaged

Improve customer loyalty with NPS

NPS surveys can help reveal ways you can improve customer retention, acquisition, and loyalty.

Promoters—those repeat customers who are most likely to recommend you to friends and family—are likely to remain loyal. And they can help bring new, potentially loyal patients into the fold. In fact, research suggests that promoters may account for up to 80% to 90% of all referrals.

Identifying these valuable promoters provides the opportunity to let them know that you appreciate their loyalty. It may also open the door to asking if they would be willing to provide a testimonial or share the story of their positive experience in marketing materials, such as case studies or videos. Loyalty indicates whether a person is likely to repeat business, and importantly, to recommend a brand or organization to someone else. This is where NPS questions prove most valuable by gaining insight into whether the experience was positive enough for them to recommend your organization to a friend or family member.

Buying healthcare products and services is a more emotional purchase than most others because consumers are looking to protect the welfare of their own lives or that of their families or client base. Customer experience is key, especially in the wake of the COVID-19 pandemic. Research reveals that 88 percent of healthcare executives think understanding patient experience is more important now than before the pandemic. NPS surveys in healthcare remain one of the best ways to measure that experience.

Being able to demonstrate you are a reputable company with an excellent rating goes a long way to alleviating what can be a stressful time for a patient. Also, when consumers choose a healthcare provider or product, they’re often signing up for a consistent service rather than a one-off experience. So by leveraging an above-average net promoter score, healthcare companies can attract and retain customers more effectively.

Increase revenue and profitability by utilizing Net Promoter Scoring

Customer experience is not just about research, though. Studies conducted by Harvard Business Review, Bain & Company, and CustomerGauge have identified a strong correlation between high NPS scores and revenue. Consumer loyalty and clinical service are inextricably intertwined and healthcare leaders should commit to excellence in both... it will be rewarded.  Research from Bain found that a 5% increase in customer loyalty boosts profitability by 25%.

A report by The Deloitte Center for Health Solutions has demonstrated that healthcare organizations with high patient-reported experience scores have higher profitability. This research suggests that while there is increased costs associated with investing in improving the patient experience, revenue increases even more. In other words, the old maxim, you have to spend money to make money holds true for healthcare organizations committed to improving patient experience.

The steady metric provided by NPS scores can offer a clearer, more efficient pathway to greater profitability. The reason is pretty simple. If you’re taking steps to assure that patients have a positive experience, really listening to them, it only makes sense that will ripple through to your bottom line in a straight-forward manner.

Manage online reputation and brand

Every business needs to be keenly aware of its online reputation. However, it is particularly critical in healthcare. When it comes to people’s health and the care they receive, the stakes are higher.

NPS scores allow you to consistently track how your patients view your healthcare organization. If you start to see negative trends, you can quickly start instituting changes to address issues that may lead to  negative reviews. You can also quickly capitalize on positive feedback to encourage new and returning patients, which can lead to an increase in your patient base and revenue.

Higher NPS correlates with better clinical outcomes

It turns out it's not just the bottom line that benefits from NPS improvements, it also is good for your patients’ health. University of Missouri Health Care tracked the behavior of Promoters for six months and ended up with “striking” results. Clinical outcomes improve as well. The numbers at the University of Missouri speak for themselves.

For patients who are Promoters (scoring 9 or 10 on NPS questionnaires):

  • Average readmission rates were lower: 7.2%, compared with 11.9% for Detractors
  • Average ED return rate was lower: 5.2%, compared with 12.9% for Detractors
  • Average care compliance was higher: 68.2%, compared with 52% for Detractor

How to run an NPS survey campaign in the healthcare environment:

If you are doing it from scratch, there are a lot of ways to create and send an NPS survey but deciding which channel to use can be daunting. The most common methods to send surveys include email, SMS, phone, website and in-app. There are also various NPS software services you can use to design and run your NPS surveys, and there are even a few online applications, such as SocialNPS, that can automate all parts of the NPS survey process as interactions happen, utilizing multiple channels of contact and communication with continuous, real-time tracking of results.

Once you’ve decided which approach to take, the steps to implement your NPS survey are straightforward:

  1. Create your survey using your chosen survey method, tools or software application
  2. Determine a strategy that will attract your customer's attention and clicks
  3. Add a description to help customers understand what you need and why
  4. Compose a sign-off note thanking respondents for their time or any action you’d like to see
  5. Add your NPS question, and consider how long to make the entire survey
  6. Consider your follow up questions and drivers
  7. Determine your sample size, ideally it would cover all patients after they receive service, over time
  8. Send the survey, trying to time it to a recent visit or treatment so it is in context, but batched can also work (1-4 times a year, etc)
  9. Collect the survey data, continuously, near to the service delivery, is best
  10. Analyze the results as the data set is added to

How to Analyze Net Promoter Score Results

As we have stated above, use the single question score of 0-10 to identify your Promoters, Passives and Detractors and follow up accordingly. Those scores should then be used to calculate your NPS for the organization over time epochs.

For the open-ended questions, the best tactics are:

  • Categorization - Tag feedback according to topic so you know which areas to focus on. Examples include waiting times, customer service, and by service or provider.
  • Demographics – Separate responses into groups based on location, age, gender, income, etc. You can use this data to develop new workflows and customize the patient journey.
  • Score Comments – Identify potential changes for promoter, detractor, and passive categories by recording patient sentiments as positive, negative, or neutral.
  • Measure Change – Compare findings between surveys over time to determine whether any changes you implemented had an impact.

Key takeaways

Peter Drucker once said, “what gets measured, gets managed.” And few measurements can match the ease, consistency, and effectiveness of Net Promoter Score. Using NPS in your organization is a great way to improve the overall health and prosperity of your business, your staff, and your patients.

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