Net Promoter Score (NPS) is a great tool for measuring customer loyalty. A tool which, however, is only effective and useful when used in the right way. To be able to do that, it is important to fully understand NPS.
In Net Promoter Score (NPS), loyal customers are called Promoters. These are essential to your company. Sounds obvious, but why is this the case? It’s not just the money your customer spends that is important, his enthusiasm and the things he tells others about you are at least as significant. Promoters keep doing business with you, which is actually 5 times cheaper than acquiring new customers. Promoters are more involved, love to help you and provide you with useful feedback about your business. 2% increase in customer retention has the same effect as decreasing costs by 10%.
A promoter increases the amount of people you reach, because he tells others about you in a positive way. Social media play a key role. To give you an idea: Twitter and LinkedIn get more than 250 million visitors a month, for Facebook this number reaches over 1 billion. The impact and power a customer has, has become bigger and bigger, which makes it more important than ever to make sure your customers are indeed promoters. Gartner research shows 91% of marketing leaders believe that in two years they will be competing primarily on the basis of the customer experience.
So, we want as many promoters as possible. To achieve this, you need to know when and why your customer becomes a promoter. Understanding this is only possible when you think from the customers’ perspective. Go back to the basis of a customer experience, the customer journey. By taking a closer look at every step in the customer journey, you can understand what a customer experiences and at what point you can improve his experience.
Factors that affect customer experience
In her book ‘How to use Net Promoter to drive business growth’ Deborah Eastman points out the following factors companies tend to overlook, but which are key to the customer experience:
- Multi-channel service: Customers contact your company through different channels, sometimes even at the same time. Make sure your communication is aligned.
- Operational metrics: What kind of factors are you measuring on a daily basis? What targets do you set out for your employees, and are these realistic and achievable? Do they really improve the customer experience? Make sure operational metrics make sense to your employees and encourage them to put the customer in a central position on a daily basis.
- IT Systems: IT is a basic requirement. Both to customers and to employees, failing IT systems are frustrating and they slow down the customer journey. This makes it impossible to get the most out of the customer experience.
- Organizational silos: Does everyone in your company work together as one team, or is everyone only concerned with their own small department? Do your sales people understand the problems retail staff have to deal with? Do your consultants understand the choices the marketing department makes?
Every customer could be a promoter: it’s up to you to make the transformation happen.
Source research data: Satmetrix