by Customer experience is one of the hottest buzzwords in business these days.
And it should be.
If you don’t know what your customers are saying about their experience with you, how can you make improvements?
At the Loyalty Zone, we’re certified providers of the Net Promoter Score (or NPS) and use this for our customer research.
The NPS was developed by Frederick Reichheld, Bain & Company, and Satmetrix. The purpose of the NPS is to measure customer experience and predict business growth.
Many businesses will have some form of research, but the problem is the questions are too long and customers ignore it or the research asks the wrong questions. Overall you’re trying to measure the customer’s satisfaction, not their experience. Who cares if the customer is satisfied or not? What you really want to know is, are they coming back and telling other people about you?
The NPS starts with a single question, and it takes very little effort for customers.
The question is – how likely is it that you recommend your business to a friend or colleague, on a scale of 0-10, with 10 being ‘Definitely’ and 0 being ‘Definitely Not’?
As a customer, you’re much more willing to answer a simple question.
But what do the numbers mean?
Customers fall into three zones, these are promoters, passives and detractors.
Promoters have a score of 9-10.
They had a great experience and will sing your praises to other people.
One-quarter of your customers fall into this group.
Passives have a score of 7-8.
They received what was expected but the experience did not stand out to them and will be easily wooed by your competitors. About one-third of customers fall into this group.
Detractors have a score of 0-6.
They’re unhappy with their experience and will spread negative word-of-mouth and complain to others about you. About one-tenth of customers fall into this group.
The NPS has no variation in the questioning, we don’t prompt the customer for a score or let them know what the numbers mean.
At times we’ve seen the misuse of the NPS, with businesses asking for customers to rate them a 9-10. You may even recall seeing this while waiting in line, or you’ve been asked directly.
Gaming the NPS will inflate your promoters, but it’s not really telling the true story of the customer experience with your business.
When you identify who your promoters, passives and detractors are, you can move on to understanding why the customer gave you those scores.
Of course, you will always get detractors, but the goal is to get as few detractors as possible because they will actively harm your business. Even vitriolic detractors can become your greatest advocates if you address their problem well.
The group in the middle, the passives, they’re the most at risk. Their experience did not stand out, they’re not promoting you to their family and friends and are easily wooed by your competitors.
The average guaranteed repeat business rate for promoters is 85% whereas passives are around 50%, a huge difference. You have a chance to learn from their experience and turn them from passives into promoters.
Your customers hold the key to unlocking the ways you can improve the customer experience, it starts with asking the right question.
How are you identifying your net promoters?