One simple question can predict customer loyalty and business growth…
You’ve probably seen this question from many companies that you have done business with or purchased a product:
How likely is it that you would recommend [company name] to family or friends?
This “ultimate question” allows companies to track happy and unsatisfied customers, producing a clear measure of an organization’s performance through its customers’ eyes. It is also the basis for Net Promoter Score®, or NPS®. Conducting an NPS survey measures your customers’ experience and can predict your business growth or areas you need to improve to ensure you retain your customers.
By surveying your customers, you can better understand if your customers are:
- Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
- Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
- Detractors (score 0-6) are unhappy customers who can damage your company reputation and impede growth through negative word-of-mouth.
Why your Score Matters
Customers that are happy with your company, or Promoters, are more likely to provide testimonials and refer you to their family and friends. This can grow your business from new customers and repeat business from loyal customers. Asking additional questions to customers that give your business a 9 or 10 can give your company valuable insight and feedback to use in marketing and advertising. Follow up questions can include:
- What did you like best about the service provided by our company?
- What makes <company name> stand out?
- Is there any area where we could have improved?
- Is there anything else you would like to say about our company?
Personally contact Promoters to ask permission to use their feedback in advertising. Provide them with an incentive (discount on their next service, etc.) to promote your company to family members and friends and on social media. During the call, you may get additional feedback to create a testimonial or an immediate referral to someone they know who needs your service.
What do you do if a customer gives you a low score?
Knowing which customers could be swayed to the competition or are unhappy with the service provided is just as critical. Understanding where your company missed the customer’s expectations can help you change processes, improve communications, further train your technicians, or make other adjustments. By communicating these changes to the customer, you can keep them loyal to your company.
If a customer is very unsatisfied, you still have a chance to turn the situation around. If a customer indicates a score of 6 or less, ask them why and what you could have done to turn their score into a 10. Make a plan to remedy the situation, communicate any changes you’ve made to your processes, and offer the customer a special incentive to try your service again. This can turn an unhappy customer into not only a very loyal one, but an evangelist that will refer your company to many family members and friends.
Determine your Net Promoter Score
Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score, which can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).
For example, if you survey 20 customers, and 16 respondents give your company a 9 or 10, two indicate 7, and the other two indicate a 6 or less, your score would be 70:
16/20 = 80% Promoters – 2/20 = 10% Detractors, 80 – 10 = NPS of 70 (Passives are not counted in the score).
Incorporate NPS to improve customer loyalty and grow your business
Survey your customers after every service call to gauge their satisfaction. Incentivize your technicians to achieve a 9 or 10 for every service call or engage all staff to improve your overall NPS score every year.
In summary, you can improve customer loyalty and expand your business by implementing NPS surveys with your customers on a regular basis:
- Understand your customers’ needs and issues immediately
- Fully leverage happy customers to promote your business and refer their family and friends
- Respond to unhappy customers with a plan to remedy a situation, tell them what changes you have made, and offer an incentive to try your business again to convert to evangelists
- Create a customer-centric business where all staff is focused on ensuring customers are happy and promote your company