No matter what industry you’re in or what skill set you to possess, you definitely feel some sort of hesitation before deciding on entrepreneurial pursuits or some personal stuff. From here, you usually do two things: surf the Internet for help and ask friends and/or family for recommendations.
The same things happen with your customers; they also value opinions and recommendations from their friends and family. Besides, Nielsen’s Global Trust in Advertising Report has already proven this in 2015. According to it, 83% of respondents confirmed that they trust recommendations from friends and family more than advertising.
Role of Social Media in Customer Service
To get started, ask yourself: What is the result of my ongoing efforts? In line with this statistic, regardless of the resources, perfect logo, sharing useful content, well-thought email campaign, one negative experience may cost you a customer and new deals. People prefer sharing bad experience to the positive one. In the age of social media, this information will spread like a forest fire, and that’s why NPS is so important for any brand.
Social media has become an indispensable element for lead generation, product, and service promotion, as well as monitoring trends among your target audience. Since multiple viewpoints come in and out along the way, your clients may praise and recommend your brand or disapprove you as a choice in reviews. At the same time, to the collection and fixing customers’ problems and unfavorable reviews as soon as possible, you add a new task to make them (customers) happy to recommend you to family and friends.
Here to rescue comes Net Promoter Score. What does NPS stand for? Why do you need it and how to calculate it? These are the aspects we're covering in this post. So, if you think about customer success strategy upgrade, spare a couple of minutes with us.
NPS in Brief
Net Promoter Score is an indicator which tells about customer experience with your brand. In other words, NPS allows to find out how likely the customer is to recommend your brand to a friend. To calculate the NPS of your brand, conduct a survey, asking one simple question: "On a scale of 0 to 10, how likely are you to recommend our product (or service) to a friend?"
Once you have the results, sort the answers out into three packs:
- Responses 9-10 include the so-called “promoters” who are loyal customers that promote you by word of mouth and drive new clients and deals.
- Responses 7-8 represent the so-called “passives” who are less enthusiastic about your brand and they can either promote you or leave for a competitor.
- Responses 0-6 categorize the so-called “detractors” who are dissatisfied with your brand. Besides, they are quite prone to share a negative review about their bad experience before going to the competitors.
Now let’s calculate Net Promoter Score. You need to define the percentage of promoters and detractors. After that subtract detractors from promoters to get your NPS percentage. If you had 100 respondents, and 60 of promoters, 15 passives, and 15 detractors, your score is 45. So, the bigger number of promoters will give the higher NPS. In case, you bother why we left out the passives - that’s because there are equal chances to get positive recommendations or negative reviews.
Do your surveys regularly towards a specific outcome with significant, rewarding value. Figure out what your customers say about your company and identify pain points and opportunities, as well as the areas requiring improvement. Encourage customers to leave their feedback and ideas for improvement that will bring more qualitative data to upgrading your customer success strategy.
What is the Value of NPS?
To kick things off, customer NPS reveals the degree of customer satisfaction you have at the moment. If you have high NPS, then the number of promoters (or happy customers) prevails the number of detractors (or dissatisfied customers). In this line, you can judge about the following:
- what is the level of customer perception to the actions your team take,
- determine customer loyalty and the likelihood of positive recommendations,
- estimate the crunch rate (subscription canceling, repurchase avoiding, looking for another service or product, etc.)
We already know (and it is proved by numerous researchers) that it is cheaper and more profitable to retain an existing client than to win a new one. So, your ROI will grow higher with empowering customer retention. Instead of throwing tons of money on lead generation, spend more resources to encourage people who are already using your product or service.
Detection of the churning prone customers is vital for ensuring the efficiency of the customer success strategy. Here the measuring of the Net Promoter Score enhances this aspect. Apart from the possibility of getting recommendations, tracking the changes between promoters, passives, and detractors shows the weak spots and directions for further improvement.
That is to say, the increase of passives along with the detractors' drop may point to the positive customer perception. Yet, the decline in promoters and growing of passive numbers could stand for customer churn and unfavorable reviews. Any changes in your NPS serve as the indicator of client satisfaction or displeasure and give hints where to strengthen customer success strategy.
Tracking the Weak Spots
Maintaining NPS survey, you may face the answers with a low score or just zero. You may take the most of these nasty incidents and encourage customers to leave more detailed feedback. This will bring you the direct pointer what to improve. Besides, people value products and services that are continually evolving.
Apply additional space to your surveys and ask the customers to comment why they have given such a score. This may be a life-giving part in point of any business. Collecting qualitative feedbacks will reveal what specific things and features in the product or service you can advance and, therefore, deliver a better experience and meet the expectations.
In an attempt to combat the inefficiency, be ready for useless comments and trolls’ feedbacks. In spite of such feedbacks, there will be notes about the bug, complex UX, unhelpful customer success manager, and the like could be distributed to and fixed by the specially selected team.
Referral Marketing as Untapped Option
Think of NPS this way: you acquire a kind of awareness concerning recommendations from happy customers that play a quite important role in the brand reputation and business. To support this, Nielsen’s recommendation states that 80% of satisfied customers are ready to give a positive review and recommend service or product. Nearly 70% of respondents say that they may buy a product if a friend told about it on social media. What’s more, the referred customers are more profitable than loyal as their lifetime value is 16% higher than others.
At the same time, it is known that a referral marketing or a word-of-mouth marketing is one of the best forms. Also, let’s not forget, people just buy a product based on someone else’s opinion. With Net Promoter Score you will identify the happy customers, so you will make this channel even more useful. Ask your satisfied customers for a case study, testimonial or sharing their experience working with your company in a review. All these things will attract more new clients because people trust the opinions shared by other and people they respect (like family, friends, social media influencers, etc.)
With the expense of NPS data, you will figure out your satisfied promoters who are a powerful and important component of every business. Once the communication waypoints are set out, engage your happy customers to a referral program and win more new customers. Implementing these tactics into the customer success strategy will help to improve the service quality, facilitate the referral process, and gain new deals.