Resources | 5 min read
Benefits of Net Promoter Score (with 5 super tips)
You’ve heard of NPS, and now you think what good it can do to you. Let’s see the benefits of Net Promoter Score and how you can make the most out of it for your business.
In 2003, Bain & Company established the Net Promoter Score to help companies measure and evaluate customer loyalty. All it takes is a one-question survey based on ‘how likely are you to recommend to a friend or colleague, and now any organisation can effectively monitor the impact of their customer experience strategies. Great, isn’t it!
What are the benefits of Net Promoter Score
The key benefit of the Net Promoter Score (NPS) is that it serves as a proxy for measuring Customer Loyalty. It helps you understand whether your customers are likely to become repeat customers or leave. It also helps you to identify customers who are most likely to become your brand ambassadors and refer you to new prospective customers.
The benefits are massive, but what are they? What do you get out of measuring customer advocacy this way? Let us tell you five salient benefits of Net Promoter Score sequentially.
5 Benefits of Net Promoter Score
1. Increase Customer Satisfaction
One of the key benefits of the net promoter score is that you see instantly how satisfied customers are with the service you provide. Most good companies want all their customers to be happy – of course – and NPS allows you to measure this effectively! When you notice that the ball has been dropped, you can immediately intervene and ensure steps are taken to address the issue – before it lingers.
2. Evaluate and Increase Customer Loyalty
The NPS system goes past measuring customer satisfaction but determining how many of these customers are loyal to your brand. Satisfaction is nothing if they are not coming back, and your NPS is the best way to identify true customer loyalty. Indeed, there is no more fabulous display of loyalty than one who is prepared to share their experience with you to their closest networks!
You can measure your initial NPS then, at a later date, reevaluate your score to see if your strategies are getting results. This allows you to gauge whether what you are doing is increasing loyalty, and if it isn’t, then you can make changes to drive this sentiment going forward.
Here are the ways you’re looking for to close the loop with NPS.
3. Create More Advocates
One thing that goes hand-in-hand with customer loyalty is customer advocates – those who are actively recommending you to friends, family and colleagues. Word of mouth is such a powerful marketing tool which seems to go under the radar in the heavy-spend digital marketing world of today. Luckily, your NPS will give you a clear idea of which of your customers are most likely to recommend you and therefore who you can ask to do so for you!
4. Reduce Customer Churn
Now, while it is essential to focus on how well your business is doing in creating promoters, it is even more critical to focus on level of customer churn. 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…!
Those in amber and red are likely to leave and go elsewhere! Worse, they tell others of their bad experience. Those you keep in the green become the super loyal ambassadors we have been speaking about.
Learn more ways of reducing customer churn here!
All in all, we’re after sustainable business growth! The actionable feedback which NPS provides is precisely what sets us up to achieve this. Promoters are the driving force. 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
- They ultimately have a higher lifetime value
The 5 Super Tips
Here your 5 super tips as promised earlier:-
- Ask for a recommendation right away. Asking for a recommendation at the time of a positive experience with your brand is imperative. You may well have provided an excellent experience to a client, but asking for feedback a year later may not lead to the recommendation you are after.
- Communicate NPS results to all the departments of your industry. This helps build trust among employees, and they tend to perform better.
- Ask for short feedback after the clients are done scoring. This tells you how you can further improve their experience.
- Acknowledge every customer’s feedback and make them feel valued. Acknowledgement builds trust in them.
- After knowing who the detractors are, engage with them and make them believe that you will do everything to give them a delightful experience next time.
Increasing the number of promoters in your business opens doors for 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.