Janice B Gordon Customer Loyalty NPS

You can encourage and measure customer loyalty with this one question. Assessing your customers likelihood of recommending your product is a great starting point for growing your customer relationships.  Research states that the likelihood of recommending is correlated to revenue growth.

This question will help you to identify the customers who love your company or products the most, and those customers who do not. Then you will be able to segment your passive fans and develop strategies to turn them into active promoters of your company or products.

This is the basis of the management tool, Net Promoter Score (NPS) it can be used to gauge the loyalty of your customer relationships. First introduced by Frederick F Reichheld in his 2003 Harvard Business Review article “One Number You Need to Grow.

How NPS Works?

Respondents to the question, ‘how likely is it…’, scoring 9 to 10 are Promoters and more likely to buy, remain loyal and refer your products or company. Respondents scoring 7 & 8 are Passives or indifferent to your products and those that respond 0 to 6 are Detractors and would not recommend.

NPS can be as low as −100 (everybody detracts) or as high as +100 (everybody promotes). Anything positive, higher than zero like +6 is good. A NPS of +50 is excellent.

The actual NPS is calculated as the difference between the percentage of Promoters and Detractors. The NPS score is an absolute number between -100 and +100. If you surveyed your customers and have 20% Promoters, 65% Passives and 15% Detractors, the NPS would be +5 positive which is good!

Bill Gates said, “Your most unhappy customers are your greatest source of learning.” Once you know if your customer is a Detractor or Promoter, you can then investigate the reason for their score and work towards improving your relationship, from Detractor to Passive or Passive to Promoter. By asking your customer a second question: “What’s the most important reason for your score?” Their reasons provide valuable feedback for business owners, front-line employees, account and senior managers. The beauty of this question is to solve relevant problems and follow-up with corrective actions that makes the difference to your customer.

The answers to the second question provide many opportunities to communicate with further open questions and to actively listen and understand more of your customers specific need and perspective.  It is an opportunity to engage and deepen your connection with your most valued customers.

It is critical not to get fixated on the score or numbers.  Yes, we would all love to have Apple Retail NPS of +76, but even if you did everything that Apple does, you still would not obtain Apples score, because you are not Apple. So, there is no point chasing numbers, this is missing the benefits of the process.

Building relationships and fostering that sense of advocacy in customers relies on following up and maintaining conversations. The point is to invest in the relations to build the loyalty of your customer relationships, NPS is only the starting point.

Apply 4 Simple Behaviours That Will Earn Valued Loyal Relationships:

  1. Asking open questions to get feedback
  2. Replying in a timely manner
  3. Listening with active attention
  4. Taking positive corrective action and then feedback

If you miss the opportunity of engaging with your customers feedback, you miss a much bigger opportunity, which is the impact on your bottom-line revenue. Use NPS surveys to build stronger relationships with your customers and increase engagement, this will reduce churn, and strengthen retention over the longer term.

A Net Promoter Score, delivers the opportunity to open the feedback and have the conversation with your most valued customers and build incredible long-term value and engagement. This opportunity helps you improve your products and business relationships and your satisfaction growth score is only a bonus. Scores are not a means to an end, but loyal and happy customer relationships are!

Ask the question: How likely is it that you would recommend our company or our products to your friends and colleagues?” And let me know the results?

3 Responses

  1. How interesting. I had a client who asked his customers to rate his service out of 5, then asked the question “What would it take for you to score me as 5/5?” The answers were very revealing. For example, they said they wanted him to get in touch more often than once each year. This led to him introducing fortnightly blog posts/newsletters (which I write for him). As a result, he is now getting great feedback from his customers.

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