Law firms are starting to understand the importance of net promoter score (NPS) in driving enterprise value. NPS is a metric that measures customer loyalty and is calculated by subtracting the percentage of detractors from the percentage of promoters.
Promoters are customers who would recommend your product or service to others, while detractors are customers who would not recommend your product or service. Firms that want to create more enterprise value must focus on increasing their NPS. This article will discuss how law firms can implement NPS and grow their enterprise value.
What is a net promoter score, and why should law firms care about it?
The net promoter score (NPS) is a metric that measures customer satisfaction and loyalty. It is calculated by subtracting the percentage of customers who are detractors (customers who are unhappy and would not recommend the product or service to others) from the percentage of customers who are promoters (customers who are satisfied and would recommend the product or service to others).
NPS is essential for law firms because it is a leading growth indicator. Studies have shown that companies with high NPS scores grow faster than companies with low NPS scores. In addition, NPS can predict other important business outcomes, such as customer lifetime value and employee engagement.
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How to calculate net promoter score for a law firm
To calculate NPS, you first need to ask your customers two questions:
- How likely would you recommend our product or service to a friend or colleague?
- On a scale of 0 to 100, how would you rate your overall satisfaction with our product or service?
You then group the responses into three categories:
- Detractors: Customers who answer 0 to 60 on the recommendation question or have a satisfaction score of 0 to 70.
- Passives: Customers who answer 61 to 80 on the recommendation question or have a satisfaction score of 71 to 85.
- Promoters: Customers who answer 81 to 100 on the recommendation question or have a satisfaction score of 86 to 100.
Once you have your groups, you calculate your NPS by subtracting the percentage of detractors from the percentage of promoters. For example, you surveyed 100 customers and found that 60 were promoters, 30 were passives, and 10 were detractors. Your NPS would be 50.
It’s important to note that you should only include customers familiar with your product or service in your NPS calculation. For law firms, this means surveying current and former clients.
How to increase net promoter score for a law firm
There are a few things that law firms can do to increase their net promoter score (NPS):
- They can survey their clients regularly to determine their satisfaction levels and track any changes in NPS over time.
- They can work to improve the quality of their services and make sure that they deliver on their promises.
- They can focus on creating an outstanding client experience by providing excellent customer service and making it easy for clients to do business with the firm.
By increasing their NPS, law firms can improve their enterprise value in several ways, namely:
- They will be able to retain their existing clients better and grow their business through referrals;
- They will be able to attract new clients who are looking for a law firm that delivers on its promises;
- They will be able to improve their profitability by charging higher prices to clients who are willing to pay more for a superior experience.
Improving NPS scores can be challenging, but it’s worth the effort.
What are the benefits of having a high net promoter score for law firms?
One of the benefits of having a high net promoter score for law firms is that it can drive enterprise value. A high NPS score means customers will likely refer their friends and family to the firm, leading to more business and higher profits. In addition, a high NPS score can also help attract new clients and employees and retain existing ones. Eventually, a high NPS score can give law firms a competitive edge. These factors can contribute to an increase in enterprise value for law firms.
Examples of how law firms have increased enterprise value through better net promoter scores
Here are a few examples of how law firms have increased their enterprise value through better net promoter scores. One example is the law firm King & Wood Mallesons (KWM), which saw its enterprise value soar after it began using a net promoter score system.
KWM’s net promoter score began to rise in 2013, and by 2015, the firm’s enterprise value had increased by $800 million. This is a direct result of KWM’s improved net promoter score, which helped the firm attract new clients and grow its business.
DLA Piper is another law firm that has used a net promoter score system to increase its enterprise value. 2014 DLA Piper implemented a net promoter score system across its entire business. As a result, the firm’s enterprise value grew by $500 million in just two years.
These are just a few examples of how law firms have increased their enterprise value through better net promoter scores. If your law firm wants to increase its enterprise value, consider implementing a net promoter score system. It could be the key to unlocking your firm’s true potential.
Related: 7 Ways to Promote Employee Engagement and Increase Productivity
How you can use the data from your NPS survey to improve customer satisfaction and employee engagement in the legal industry
You can use the data from your NPS survey to improve customer satisfaction and employee engagement in the legal industry. First, you can use your NPS score to track the success of your customer service and marketing efforts. If your NPS score is high, your customers are happy with your services. If your NPS score is low, you must make changes to improve customer satisfaction.
Second, you can use your NPS data to improve employee engagement. If you see that employees are giving high marks on the NPS survey, you know they are happy with their job and engaged with the company. If you see that employees are providing low spots on the NPS survey, then you know that you need to work on improving employee engagement.
Third, you can use your NPS data to improve your bottom line. A high NPS score makes you more likely to retain and attract new customers. If you have a low NPS score, you will lose customers and have them go to your competitors.
Fourth, you can use your NPS data to improve your brand image. People will perceive your company as a great workplace if you have a high NPS score. People will perceive your company as a bad workplace if you have a low NPS score.
Overall, you can use your NPS data to improve communication between you and your customers. You know you are excellently communicating with your customers if you have a high NPS score. If you have a low NPS score, you must improve customer communication.
If you want to improve customer satisfaction and employee engagement in the legal industry, you should use your NPS survey data to make changes in your company. Using your NPS score, you can track the success of your customer service and marketing efforts, improve employee engagement, improve your bottom line, improve your brand image, and improve communication with your customers. NPS data is a valuable tool that you should use to improve your company.
