Get recommended. Grow profitably.
Net Promoter Score (NPS)
For the Net Promoter Score (NPS) customers of one company are categorized in three categories: Promoter, Passives and Detractors. The central question behind the NPS is: “How likely is it that you recommend [your company] to friends, family or colleagues?”. The answer is collected on a scale from 0 to 10 and categorized as follows:
Promoters (9-10 Points) are loyal and enthusiastic customers that continue to buy and help you to generate new customers.
Passive (7-8 Points) are satisfied customers which are vulnerable to competitors.
Detractors (0-6 Points) are unsatisfied customers that hamper your companies’ growth through negative word of mouth publicity
The NPS is generated by subtracting the percentage of detractors from the percentage of promoters. The NPS is known as a good indicator for loyalty because the customer invests in the customer business relationship based on a personal initiative. On top of that, the cost free recommendations facilitate profitable growth.
Promoters’ added value
- They buy more
- They stay longer
- They recommend more
- They provide feedback and ideas
Implementing NPS – added value of CFM customer feedback systems
NPS is an important indicator when it comes to evaluating the performance of customer orientated enterprises. However, NPS alone does not provide you with a basis for targeted improvement measures. That’s why we combine NPS with a Root Cause Analysis and integrate customer-, process- and company data to provide a complete system with live dashboard reporting. That way it is possible to use the NPS assessment systematically. The combination further allows to connect the root causes and improvement suggestions with the NPS assessment. In case a customer has a concrete reason why (s)he does not want to recommend you it is possible to reproduce and analyse the customer journey allowing you to react accordingly.
“Loyalty is the desire to invest in a relationship (time, money, effort etc.) in the
belief that those investments will enhance the relationship.”
Fred Reichheld, creator of Net Promoter System℠.
The importance of Promoters
Loyal customers are important. The money a customer spends in your store or for your service is only part of it. It is at least as important how the customer experienced the contact with you and whether or not (s)he wants to recommend you or speaks about your business in general. His/her enthusiasm about your business counts more than ever before.
Promoters will continue to engage with your business, which is 5 times cheaper than creating new customers. They are also very much involved in your enterprise and like to assist you and give useful feedback about your business – a priceless asset. To put it simple, tie 2% more customers and you safe 10% in expenses.
- The Net Promoter Score tells you what your customer are enthusiastic about
- The Customer Satisfaction Score gives you insight in the total satisfaction
- The Customer Effort Score informs you about the basic expectations that your customers have
The CES provides you insight into which services the customers expect, i.e. it reflects what the customer takes for granted. If you do not match these expectations it will cause the customer to become unsatisfied and in the end lead to the loss of the customer. Matching the expectation does not lead to a tie between you and the customer, however. Demanding unnecessary effort from your customers is reflected in a low CES value, which should be increased.
CSAT helps you to improve your performance in terms of customer satisfaction. Extra effort that you invest in your customers is perceived consciously, highly valued (unlike the basic expectations) and can help to rise satisfaction levels and to tie the customer to your business. As a side effect you diminish weaknesses and ensure that your services or products keep what they promise.
The NPS aims for the enthusiasm of your customer and the creation of more and more promoters. You have to offer added value that is unexpected by the customers and that distinguishes you from your competitors. Increasing NPS means putting a marvellous customer experience on top of your enterprise’s priority list.
Every promoter increases the number of people that you reach as (s)he spreads good news about your business creating a better reputation. Social Media play a key role in the distribution of promoters’ opinions.
To give you an idea: Twitter and LinkedIn have more than 250 million visitors per month, Facebook has even more than 1 billion visitors. The influence and power of the customers increases every day. Thus, it is more important than ever that your customers are promoters!
According to research results of the technology research institute Gartner Inc., 91% of the marketing managers believe that the main competition will be about customer experience in two years time.