118: Sturdy McKee on Tracking the Intangibles with Net Promoter Score

I think a lot of times, especially as we grow, we don't really know what's going on. The bigger you get, the harder it is to know what's going on and how you're really doing. You may know your financial numbers, you may see some people smiling around the business or unhappy around the business, but to really know definitively, objectively about the business, it would be great to have a system. And the system that we most recommend is called Net Promoter System, or nps. Today's show is all about how to implement nps, not as a simple metric, but as a whole system for understanding what's going on with your business and making it better. This is not a talk with an expert guru, but a talk. It's a case study talk with another entrepreneur on what they did, how it changed the business, how it made it better, and the practical things that you can do to implement this in your business. So listen in. Hello and welcome again to the Scaling Up Business Podcast. I'm your host and growth coach, Bill Gallagher. On the show with me today is another entrepreneur CEO who's going to talk about the implementation of the NPS system, the Net Promoter system, how they do it in their business, what they learn from it. This is not a case study of a perfect example. This is somebody who's done quite a bit with it for some time and who's still working with it. I want to welcome to the show a dear friend and a student of all good business practices, Sturdy McKee. Sturdy, welcome to the show.

Thanks, Bill. That's lovely introduction. Thank you very much. Happy to be here.

So Sturdy is the. His business is San Francisco Sport and Spine Physical therapy. And you've been using NPS for five to six years now. Yeah. Haven't you?

Yes. Yeah, we implemented it about five years, it may even be six years ago into the business.

So we're going to talk about the business insights you've had from it, how you've done it operationally, some of the ways you're addressing both promoters and detractors, and hopefully it'll give some of our listeners some ideas of how to turn it into more than a number. I've had some clients and people that I interact with, people in our accelerator programs think of the NPS as simply a number. And they like it because there's some industry comparables to look at, but it's more of a whole system for improving your business overall. That's what I really want to address. That's why I'm excited to have you on the show. Today to talk about that and how to make it work. Before we get into that, why don't you give folks a little bit of background? When did you become an entrepreneur? How did you start? San Francisco Sport and Spine. Give a little background on yourself and the business.

Thanks, thanks. Yeah, we've talked a little bit. And I think I was an entrepreneur before I knew what the word was. You know, like you. I was when I was 10 years old. I was selling candy at school. I bought a lawnmower at 12 and was mowing lawns and stuff. I've always been doing something, you know, even when I had a job, there was always kind of a side hustle or gig or something I was interested in or planning or doing or what have you. And I've had a couple different businesses, but the private practice, the company I had gone out there had been kind of an implosion at ucsf University of California, San Francisco, where I worked there. They had merged with Stanford and there was a demerger. They divorced and split up the medical centers. And at that time, a bunch of people, I think more than 2/3 of the outpatient rehab department got cut. And that was one of those moments in time where I went out and looked for other jobs. I was one of the last to get cut and went and interviewed and came home and just talked to my wife about I really don't want to work for any of these people, any of these opportunities I've looked at. What do you think about going out and just me doing it on my own? And that was way earlier than I ever thought I would go into practice for myself. I was probably only three years out of school at that point, out of grad school, and. But I did, and it worked and did that for about two years solo, just me. And then after about two years, had an opportunity to open another location and teamed up with another therapist and we opened up a clinic in the Marina district. And we still had his and I still had mine. So the two of us had three locations and did a very typical kind of e myth crash course in entrepreneurship. We decided to do this thing and had no training or background in management, didn't know the first thing about hiring people or growing a business that way. And meanwhile we're running around to different locations and stuff. So we very much learned early on through the school of hard knocks. And really, when we went outside of the profession of physical therapy to learn more about business, that's when things really changed for us. That's when we became profitable. It's when we were able to start settling down into a routine and a business that was an actual business, not just us working our tails off 12 hours a day. And that gave me the opportunity, I guess, to realize that these things that we can learn in business, we can use them however we want. So I really, it fit very well with my desire to learn more and grow more and you know, as a person, not just as a business, and just kept devouring information and learning from other people and you know, seeking out new people and coaches and teachers and mentors. And by doing that, we were able to create a much more stable business. And I say stable. I mean it's been 17 years. It's been up and down like everybody, like everybody, I think experiences. It's not. It doesn't mean it's been smooth sailing by any stretchy match nation, but. And that's also, I guess, a little bit hopeful. And we were more than a decade into the business before we even considered and put in place the NPS process.

Yeah. So let's talk about the NPS thing. You collected a couple different ways. So talk to us about the introduction of it. What tools did you use the beginning of bringing it into the business?

Yeah, we, we were really looking at ways to survey our patients and to learn more about their experience. You know, we have especially as we had at one point we had six locations and 40 some employees and you know, you start to lose touch with the frontline contact and even if you're working with patients, you don't customers, we didn't know what their experience was across the board, didn't know what was happening, you know, in any kind of disciplined way with what was happening at all the other places and interactions and what have you. So what we had come up with and you know, was this really complicated multi question, you know, involved survey and stuff. And we didn't implement it. We kind of dragged our feet in part because I just was like, who's going to fill this out? Who's going to complete it? Is it answering the questions we really want?

And for people who are brand new to this Net Promoter system, NPS is really asking one question and then an open end. Now people complicate it, add more to it, expand it and so on. But it is an answer to some of the complicated things that you get so little response on. So in the Net Promoter survey question, we ask how likely are you to recommend this company, this product service to a friend, to a family member, to whatever. But it's the likeliness of recommending 1 to 10. And in that system we consider 1 to 6 as detractors, 7s and 8s as neutrals, and 9s and 10s as promoters. So net promoters are the number of promoters, the 9s and 10s, the count less the detractors, the 1 to 6 count. So how many people said 1 to 6? And we subtract that from the other, we divide the remainder by the total surveyed and we end up with our net promoter score. That becomes an industry comparable number and gives you a percentage of the total that are promoters less detractors. So that's the survey structure and the score in the system. We're generally ignoring 7s and 8s and we're looking at the 1 to 6s to see what can we learn from them. Do we need to change our targeting so we don't attract those people? Is there something wrong operationally or executionally that we need to address that has somebody be unhappy? Is there a specific customer we need to fix or save? So there's all of that. Then the promoters we want to figure out how do we get more people like them, how do we get a testimonial referral, that kind of thing. So we want to leverage the promoters, we want to, we want to address the detractors and the 7s and 8s. You can largely leave them alone. So that's kind of the system like recapping in a nutshell. Let's go back to your case. So you're implementing this, you want to know the business has now grown to a number of locations you've lost touch with, what are the tools you used, what had you first do it, how has it evolved?

Sure. Well, you know, talking about the complexity of these big involved surveys that people weren't going to answer and weren't sure whether it was going to address our objectives. When we learned about, I learned about the NPS and the process and how simple it was and that it was evidence based, that it's been tested and tried. And as you said, you can compare across other companies in your industry. And that was very, very appealing. And even from the get go we realized it was a process, it wasn't just a number. And what we, what we did was we worked with a company, well they were rolling it out called Strive Labs and strivehub Breach was the product. Very much focused on the physical therapy space, but basically it's an automated email system. But one where you, it's a CRM. Basically you segment your audience and give relevant information. So we'd also Never done newsletters and stuff because they didn't want to spam people with stuff they didn't want. But we could target people and give them relevant information this way. I liked that and I liked the automation of the nps. And what we did was we. So two weeks, we decided that two weeks after the initial evaluation we would send out the NPS score or question how likely are you to recommend San Francisco sport and spine physical therapy to your friends or colleagues or what have you? And that was it. Right. And then we did that again at six weeks and the reasoning was, and it turned out to be a really good decision. You know, not all of our decisions are we're doing something new. But this worked really well because it gave us a chance to follow up on those people that responded negatively in the first two weeks if something was going wrong, we were able to call them, talk to them, intervene, figure out and solve, you know, that problem or do our best to fix that experience and then follow up at the six weeks to see if we actually had changed it. You know, the good news was there weren't that many people the falling below, but there were and early on in the implementation and by the way, we didn't ignore and still don't the sevens and eights. We call all of them. We call anybody who's not a 9 or a 10 because we want it to be awesome, we want the experience to be great. But so anyway, we discovered there were two patterns that we were completely unaware of. And the two things were around volunteers, an observation and around students and what our brand. We've tried to provide a superior experience. And in all seriousness, we're not just saying that we want to be different from your run of the mill medical kind of experience and our patients expect that of us. And what we found was, well, I'll give you one example. We had a 21 year old ACL reconstruction patient who, who was paying out of pocket, he had a high deductible and didn't have benefits with us. And when we talked to him, three or four, which isn't, you know, that's not good and figure out what was going on. So got on the phone with him right away and found out that, you know, he was being, he was being treated by a student and the therapist and student made the decision that we do student rotations and all like most clinics. But we, well we, I'll go into how we change things. But he felt that he was paying for the services of a skilled and experienced therapist and meanwhile he was Getting the services from his students. And he had not fully consented to that. And that for us was a huge red flag. Like, that's not okay. Among other things, you need to get consent from anybody to have anyone else even present. That was the kind of the thing around the volunteers as well. There were people watching and observing without getting full consent away from the volunteers. So in case somebody said, no, I don't want them watching, they didn't feel bad about saying that in front of the volunteer, the student or whoever. So those were the two things that we found out. And, you know, we did our best to immediately change and fix. And, you know, we went to the person who ran the student program and shared it with her and she's like, well, I don't do that. And like, exactly, you don't. But we don't have a thorough process, you know, across all, across all locations to deal with. You know, to do this consistently. We need to make sure that you're not assuming. We're not assuming, you know, that when we do bring on a student or when we do have somebody in the practice that's doing volunteer hours, what have you, that we have a documented, consistent process that addresses the needs of the patient, period. And, you know, so it allowed us pretty quickly to solve for those and make that better and, you know, make corrections, fix it. So since then, the other good news is, even over the course of several years, there have been very few patterns that we've discovered. There have been one offs and, you know, mistakes and bad experience and what have you that we try to work with and fix. But we've, we've kind of fortunately, I guess, eliminated like systemic things that were just being done wrong across the board. But we wouldn't know that either without continually, you know, putting this out. And I think, you know, the thing I run into too, with talking to other people who haven't implemented this yet, Bill, is, oh, I have to call on all those people. Well, number one, the cool thing was for us, there wasn't a lot of people to start with. You know, it was a couple calls a month that we were trying to fix across several six locations. But, and even to today, you know, out of a hundred new patients a month and stuff, we're making one call every month or two. So even, you know, 0 through 8, we're still making those calls, but there aren't very many of them. And the longer you do it, the fewer and fewer of them there are because you've addressed the kind of the patterns and the processes and things that don't meet and exceed people's expectations.

Yeah. Your scores then improved over time as well as addressing the systemic kinds of things. Right?

They did. But the thing that when we started out, I think we were what I think our initial scores came in like overall for the company at around 80, a positive 80, which is world class, is what they'll tell you. We were looking across different industries that was higher than the highest big company in healthcare was rating at the time and what have you. But fortunately, we didn't know enough to be complacent with that. We were just looking at, okay, so why is it not higher? And as we kept going and going and going, we're well over 90 at this point, which is awesome. But, you know, it's still, it's not 100. And I don't know that we'll ever get there. Anybody can truly get there. But we consistently strive for it and try. And, you know, aside from, we look at it as a company, but we also look at it by provider, so we can segment it by therapist and see. And those early days, we had a range of people from the 60s to the 90s. And, you know, we wanted to figure out, why is that? Why are you running 60s? You know, especially when we're dealing with someone with experience who's a really good, has really good clinical skills, what can we do better to make that patient's experience better? Because they're not always, you know, they're not always in the best position to judge the clinical skills. They're judging the communication, how they're being treated, how they feel about the experience and those things as well.

So you're using it operationally across clinics and you're using it at a granular level to look at a specific clinician to see how are they doing. And if somebody is falling behind, you can go address and work with that person to address the communication or service issue that has them falling below it.

Right. And like any, I mean, you know this, like any metric, it doesn't necessarily tell you what's wrong, but it does tell you where to look and where to investigate. So then you go do the digging and the differential diagnosis and figure out on the business side of things, what's going on.

So we've got your tracking score and you're addressing the systemic operational issues. You finding, you found the pattern where student practitioners were doing without the express consent or agreement participation of the patient, and you were able to address that. So that's all on the detractor side and the tracking site. But then you also said something interesting to me as we were getting ready and you said you encouraged the promoters to go give you a public review. So we know that so many businesses live and die by Yelp and TripAdvisor and things like that today, but you picked out your 9s and 10s and asked them to go review you publicly. Yeah, talk to me about that. How did you do that? What did that do?

Yeah, I mean that was actually really simple in the system that we put in place. So for those respondents it's just another was a follow up email to them the next day saying thanks so much for rating us. Glad you're happy. If you have time, would you be so kind as to da da da review us on Google or on Yelp and we put those links in there. The reason we were looking at Google was for Google rankings and all the things they were coming out with and that type of thing. We already had a presence on Yelp so I think you can target and kind of choose. So yes, we did follow up and ask and it wasn't a hard ask and it wasn't, you know, we just did it once. So we are not bothering people and what have you. But. And we did get some reviews and we continue to, but it's not a lot. It's not an avalanche or anything like that. We're also not a retail business with people walking in and out all the time either. We don't have, you know, thousands of customers of a few hundred at a time. But we, you know, we did talk about that. But I, what I still haven't solved for and what I want to do is figure out something more, not just to leverage and ask from those people, but to do something more for them as well. And we haven't really figured that out. We've offered a free screen to the promoters and stuff in the past just as a courtesy, that type of thing tell you what's going on. But we haven't really figured out how to engage them and make them feel as special as they've made us feel.

So a couple of things I've seen from other clients and they're certainly talked about in the system overall, is to go and see if you can profile those people so you can ask them for referrals, you can ask them for testimonies, you could pull them up on a Skype call or FaceTime or something like that, and you can take a video testimonial from them that you can use online in other settings where they talk about the great experience and how you're different and like that. The other thing you can do is go and profile them and figure out what are the common characteristics of the people who love us. Maybe it's specific ailments, maybe it's age, maybe it's what their sort of activity or sport interest is. Any number of characteristics that you might find and you might discover. Oh, the people who really love us all have this in common. I've ended up over time. So it can help to get to that like bridging to another thing like the core customer profile. It can help you to determine how to find more people like that and how to target more of them by discovering characteristics and, and usually you can do that with a little bit of follow up or an in depth interview or a client home or office visit and you'll notice things about them that they might not think of themselves or volunteer when you're looking at them in that way. So it's worth doing.

Cool. Thank you. Yeah, it's a great idea.

We have another company that we've worked with that has a very visible public company in the travel and tourism sector and they've taken their promoters and asked them to give a positive rating on TripAdvisor. And that goes a huge way to making their marketing sort of self generative by asking the people who love them to go out and say what they loved about them and so on. Then they incentivize their local shop, their retail outlets for their business with some reward every time they get a positive TripAdvisor review. And that has a. In every industry there are things that influence our purchasing decisions. And that's only going to keep growing, right, over time?

Oh, for sure. Yeah.

Yeah. So what's next do you think, in the evolution and your use of the NPS system, how do you see it going now?

And well, I'm taking your idea and kind of merging it with where we think our target customer is and looking at that and basically validating, verifying that we're on the right track or we're doing the right thing for those people particularly. Yeah, that would be something we could do and should do. You know, still trying to figure out what, what else we can do for them to make it an even better experience. Whether that's while they're working with us or afterwards. Some. Something. I mean, I haven't yet figured out how to maintain and keep, you know, long term engagement from individuals. We obviously have relationships with other businesses and with physicians and people near you, but you know, it's a little bit harder when you get better, go off and do your thing for a year or two and then maybe you need us again. How do we really provide some kind of value and stay in touch without, you know, just spamming and annoying people?

Sure. Well, and obviously the promoters generally don't mind and the detractors appreciate you reaching out and trying to fix something that they're unhappy about. Right. Which is part of the reason for addressing detractors and promoters and ignoring the others who are just fine but don't have anything particular to say about it. We can focus on that. The other one to bring up for people. I don't know if you've tried this, but I have two clients with our client companies tend to have a rapidly growing employee base, but we have a couple with over 100 employees this quarter where they feel like they're not sure how to close the gap for them. There's a version of this that we call Employee Net Promoter Score ENPS and the ENPS system is exactly the same thing It'd be how likely are you to recommend working at this company to a friend or colleague and in that system then we're asking why? And we can look at the people who really love working at the business and encourage them to refer someone they know to work for the business, ask them to help find people and so on and figure out who are these people that really love working here and how do we find more people like them? If they love working here and they perform well, chances are good that we should profile them and figure out how to find more people like them and get them referring their friends to work for the same company. And by the same token, the people who hate us like you know they should not be there. They should work somewhere else.

Can we fix it? Should we fix it?

Or is there something where they've been wronged or there's been a problem, there's some systemic problem that we need to address, or are they just not good fit? Right. In either case, there's something to address on the detractor side. So ENPS works great. A tip, you didn't talk about it, but you can go use a simple free tool like SurveyMonkey and you can enhance it by doing their paid versions as well. And they have some variations on NPS there and you can use this in a way as your regular tracking collector. So you can do this for free and append it to invoicing statements, follow ups customer lists into your CRM. There's a variety of ways to integrate the prompt into the request for the response into that. We're all used to that at this point. So you can integrate that with a simple free tool. Of course, many of the commercial products that you're using, the CRMs and things like that may have NPS and enps as options that you can turn on or enable within that, but it's a really straightforward thing. How likely are you to recommend the purchase or the employment? And why do you say that? And then we simply deal with the two extremes. I want to also turn people on to the book. So if you want to read more about it, more examples and that kind of thing, we took this as a practical case study with a small business, but the book is the ultimate How Net Promoter Companies Thrive in a Customer Driven World. The author is Fred Reichelt and you can find this on Amazon. Fred Reichelt with Bob Markey from Bain and Company. Anyway, there's a lot that you could read and understand about implementing this as a whole system and I want to encourage folks to do that. We'll put a link to the Amazon book right here if you want to learn more about Sturdy's business. Sturdy SF Sport and Spine Physical Therapy. I think you have a web address for that too, don't you?

Oh yeah. Our web address is sfysicaltherapy.com awesome.

And so if you want to see and learn about the business or maybe you need help fixing something, you live in San Francisco Bay Area.

That's what we're here for, right?

And as always, look, we have all of the tools of scaling up. We have worksheets and instructions and tips and things like that for for you. On our website@scalingcoach.com We've also got a free book offer. You can go there and go to the free book offer and we'll send you a free copy of Scaling up if you pay the shipping and handling charge so you can get it, read it and refer back to it and so on. And then of course we have workshops and things like that on Scaling up on a regular basis. Just go to scalingcoach.com and and we'll be back here every week with a new podcast episode on some aspect of growing your business and scaling up. Thanks again for being on the show with us today, Sturdy. And we'll talk to everybody next week.

Thank you so much, Bill. Really appreciate it.

One of the things that we didn't cover in today's recording about Net Promoter System, NPS and ENPS is the notion that you have to talk to people who are unhappy the Detractors and a lot of folks that implement this are a little bit afraid of this. I want you to know that talking to detractors is not something you have to be afraid of. It's normal and natural, but they will be happy to hear from you. Think about it. When you are unhappy with a business, if they actually reach out to you and ask what happened, what's going on, how can we fix it? Even if they can't fully fix it, that you're happy with the outreach, so even if you can't satisfy that person, ultimately they're happy that you made the effort to try. The calls that you do there will be much better than you think. And when you are able to fix something for someone, those people don't go to neutral. They tend to go to ecstatic promoters. If you fix someone who is unhappy, they become a passionate promoter and advocate for your business. They really feel like you care. So that's the thing we want you to know about dealing with detractors on the on the negative side. I want to give special thanks to our original growth guru, Vern Harnish. Our show is produced by Niobed and audio productions done by Podfly. Audio editing is done by Albert Burge and our show notes are compiled by Ein Codena with proofreading by Tim McGowan. If you got some value out of the show today, please share it with somebody else and let us know the part parts that you loved. We always love hearing from you and what makes a difference for you. Thanks again for listening and keep scaling up.