Customer satisfaction is the foundation for sustainable growth for any business. If your customers are not satisfied with your services, two damaging things can happen. First, the dissatisfied customer will most likely seek the services of another provider. Second, depending upon the level of dissatisfaction, your customer may become an active detractor and damage your business reputation with negative word-of-mouth or reviews. The latter outcome has become increasingly more damaging to businesses in the age of social media.
Obviously, you work hard to keep customer satisfaction at a high level. But how do you track customer satisfaction? One powerful tool that provides actionable insight is your Net Promoter Score - something you can determine using Reminderly’s integrated survey capacity. What is Net Promoter Score?
Simply put, NPS is a tool to help companies measure and evaluate customer loyalty. In 2003, Fred Reichheld, a partner at Bain & Company, developed a way of measuring how well a business treats its customers, and NPS was born.
Net Promoter Score is a customer satisfaction metric based on the answers to simple survey questions such as “How likely is it that you would recommend this product/service to a friend?” and “How likely would you be to purchase this product/service again?” The customer answers the survey with a 0-10 point scale, with 10 being extremely likely and 0 being not at all likely.
This generates a Net Promoter Score for your business. Scoring is broken down into three different categories. They are:
Once these numbers are captured for your customer base, the NPS is determined by subtracting the percentage of detractors from the percentage of promoters. For instance, if surveys indicate that you have 75 percent promoters and 15 percent detractors, then your Net Promoter Score would be 60 percent.
It is no coincidence that many Fortune 500 companies use NPS to inform their marketing and operating strategies. On average, an industry’s Net Promoter Score leader doubles its sales and growth in comparison to its competitors. This underscores the importance of NPS as a customer metric. It is estimated that customers identified as Promoters account for 80 percent of referrals in most businesses. Additionally, customers who fall into the category of Promoters have longer, more profitable relationships with a company.
The beauty of using NPS is that it holds your business accountable for the way you treat your customers. Because it gives you a clear picture of how satisfied or dissatisfied your customers are, it provides you with opportunities to promote increased customer satisfaction.
NPS links customer loyal to actual business outcomes. Because you can compare your NPS from one reporting period to the next, you can accurately see how your business initiatives are impacting your customers in terms of satisfaction. If your scores begin to drop, you can quickly make adjustments as problem areas are defined.
Prompting customer feedback with simple surveys enables you to find out what your customers truly think about their experience with your company. Once you gather this valuable information, you can share it with your customer-facing employees. This will help them to proactively address problems and focus on creating a customer experience that will wow your customer base, reduce the number of detractors, and boost your overall NPS.
Because NPS also helps you identify your most loyal customers, you can focus on encouraging their good inclinations to spread the word about your company. Happily, research indicates that customers in the Promoter category are less sensitive to price fluctuations and more likely to stick with your brand regardless of minor price adjustments.
Reminderly’s integrated survey tool provides you with access to this powerful Net Promoter Score. For additional information about NPS and other product features, please contact us today.