Your customers are happy and they’re telling everyone about you, creating a bevy of new leads and customers. This is every business owner’s dream come true. A flood of new customers is never, ever a bad thing! But what if you aren’t seeing a flood of new customers pouring in? You are probably wondering why your customers aren’t talking about your business, and you should consider your Net Promoter Score.
Whether your company gets a ton of new referral business or not, there is something you can do to track word of mouth marketing and the overall customer experience. It’s a little thing called Net Promoter Score (NPS), and it’s not just for large corporations. Any sized business can implement this nifty system.
What is the Net Promoter Score?
The Net Promoter Score system was created by Bain & Company in 2003 and is based on one simple question: What is the likelihood that you would recommend Company X to a friend or colleague?
Referred to often as “the ultimate question,” Bain & Company found there is a high correlation between this question and actions that contribute to a company’s growth, such as repurchases and referrals.
How is NPS measured?
Based on the ultimate question, customers can rate your business on a scale of zero-to-ten based on the likelihood they will tell someone about your products or services. Bain & Company recommends asking your customers why they would or would not promote you as a follow up question so you can better understand what is or isn’t working for them. It’s nice to know where your customers stand with you, but it’s better to know why. The scale is further broken down into the following categories:
Promoters (9 or 10)
Promoters are those people who adore your business. They are telling everyone about your products and making sure that everyone gets a piece of the proverbial pie. Well, it’s proverbial unless you actually make pies. Yum, pie. The best news about promoters: They are responsible for 80 percent of referrals to your business.
Passives (7 or 8)
Passive customers are considered to be the folks who are fine with your business, but who could easily switch to a competitor given better pricing or service. It is unlikely they they are telling many people about you. In fact, they are likely asking around for alternative sources.
Detractors (0 to 6)
These customers are not happy and the closer they get to zero on the scale, the more unhappy they are. These are the folks complaining about you in the line at the grocery store or to their coworkers. And they are most definitely not recommending you to anyone they love. According to Bain & Company, detractors are responsible for 80 percent of bad customer reviews.
Now that we know what NPS is all about and how it works, let’s discuss why it’s used and the benefits of using this system.
Based on the information above, Net Promoter Score can help any business track how its customers are feeling about them at any given time and why they feel that way. But how can implementing the system help your business?
Measure Customer Loyalty
If you want to see how many of your customers are loyal, this is a great way to measure it. There is no other business system that allows you to gauge for customer happiness. The great thing about the system is that you can watch for changes in customer satisfaction by asking the question again.
Create More Brand Advocates
Your brand advocates – the nines and tens on the NPS scale – are the ones singing your praises. You want as many of those as possible. Using NPS allows you to get customer feedback on things you could be doing better and adjust if possible. Making adjustments and following up with former customers on these changes gives customers recognition and could even bring them back and turn them into another advocate.
Reduce Customer Churn
The number one reason for customer churn: bad customer service. Using NPS can help you ensure your customer service is on the right path. It’s pretty lame to think about losing a customer to a competitor because they didn’t feel they were treated right. It seems so easy to avoid! Keeping up with your NPS scores and feedback will ultimately help you to keep that churn in check.
Boost Customer Satisfaction
Anything that is tended to closely is going to thrive. If you keep up with your customers using the NPS system, you can track the progress your efforts are making. For example, you might want to perform customer satisfaction queries every six months, or even once a quarter, to stay in tune with your services and the customer’s overall happiness.
It’s so nice that we’ve educated you on the Net Promoter Score and its value, but how in the heck can you begin using it? Are there tools out there that can help to measure these ratings? You betcha! At PATLive, we use SurveyMonkey to keep on top of our customers’ happiness. Other tools include AskNicely, Promoter.io, and ZenDesk.
The Net Promoter Score can bring businesses of any size a lot of value. All business owners want their customers to be happy with the products and services they provide, so why not pay attention to how your customers actually feel? Your business stands to generate more brand advocates which leads to more growth.