5 reasons why you should use NPS!
Our top reasons why your company needs to be calculating Net Promoter Score
In 2003 Bain & Company created the Net Promoter Score to help companies measure and evaluate customer loyalty.
It uses the question ‘how likely are you to recommend to a friend or colleague’ as a proxy to effectively monitor the impact of their customer experience strategies.
Here are our top 5 reasons why your business should be monitoring NPS.
1. Increase Customer Satisfaction
One of the main benefits of the NPS is that you can see directly how satisfied customers are with your service. We all want as many customers as possible to be happy and NPS gives us the opportunity to measure this effectively. If you can see satisfaction levels are not what you want it to be you can take steps to increase it.
2. Evaluate and Increase Customer Loyalty
Happy customers leads to loyal customers – ones who come back time and time again. Satisfaction is nothing if customers are not returning. Your NPS is the best way to identify true customer happiness.
HOT TIP: Plot your NPS over time and to see if your strategies are getting results. This allows you to measure whether what you are doing is increasing loyalty and if it isn’t then you can make changes to move forward.
3. Create More Advocates
Hope you’re following the pattern here! Happy customers, lead to loyal customers. Loyal customers are the ones who drive advocacy. Your advocates are those who are going around recommending you to friends and colleagues. This is an extremely intimate action. Think about your own behaviour. You are only likely to recommend if you have complete confidence in the business you are recommending. A recommendation is a major vote of trust in what you are doing for customers.
Word of mouth is such a powerful marketing tool which unfortunately seems to go under the radar in the heavy-spend digital marketing world of today. A customer which comes to you via a PPC ad and one who has come via an existing customer recommendation are at different starting points.
4. Reduce Customer Churn
It’s important to focus on how well your business is doing in creating promoters, but even more important to focus on how to reduce customer churn. Chasing new customers when you are struggling to retain existing ones is a foolhardy approach. It’s important to ensure we are satisfying existing customers and ensuring they return, before trying to attract new business.
Promoters are understandably much less likely to churn but knowing your NPS means you can invest more into creating an unforgettable customer experience which encourages passives and detractors to move into the green.
All in all, we’re after sustainable business growth and the actionable feedback NPS provides is exactly what sets up us to achieve this. Once we’ve identified and put measures in place to reduce customer churn, we can switch our attention over to growth!
Promoters are the driving force for us so we want as many customers as possible to be in the green and here’s why:
- Promoters spend more (and are less price sensitive)
- They’re more likely to try new product offerings
- They encourage others to buy from you
- They churn less
- Promoters ultimately have a higher lifetime value
In closing, if you are not measuring customer experience and are relying on gut feel, you may have a whole crowd of dissatisfied customers which you are unaware of who may be damaging the brand of your business. On the flip side, increasing the number of promoters in your business opens up doors for advocacy and massive growth potential. Through simple to use customer feedback tools like GroHawk, working out your NPS and using it to achieve positive growth has never been easier. It’s done for you…!