It’s no secret that loyal customers are a treasure сhest for any business. They not only drive more profit but also bring in new customers through referring their friends and family, which helps you save resources for customer acquisition.
The ingredients of building a loyal customer legion are also well-known:
- Meet and exceed their expectations.
- Listen to what they have to say (and react promptly).
- Work to provide value to your customers.
Most companies add an insufficient amount of each ingredient to the Customer loyalty mix, correspondingly resulting in an insufficient number of happy customers.
One way to ensure you know what your customers really want and feel about their experience with your company is to ask them—via NPS, which can be invaluable in helping grow the number of your advocates.
Net Promoter Score and Its Potential For Improving Customer Loyalty
First of all, what’s NPS? It stands for Net Promoter Score, the metric companies use to measure customer loyalty. It is calculated based on the customer's response to one question—the likelihood they will recommend a company to others, on a 0-10 scale.
Interpreting NPS Survey Results
| 9-10 | The customers who responded with 9-10 are called promoters; they will likely refer others to your company and be happy with the service. |
| 7-8 | Those with scores 7-8 are passives. They are less likely to recommend you and can also switch to your competitors. |
| 0-6 | Customers whose scores are 0-6 are detractors. They are unsatisfied with the overall experience with your business and not only unwilling to recommend it but can also prevent others from becoming your customers with their negative reviews. |
The Net Promoter Score is calculated by subtracting the number of promoters from the number of detractors. The higher the result - the more loyal your customers are. Obviously, your goal should be to increase the number of promoters while also decreasing the number of detractors.
Here is another use of NPS surveys: asking customers for reasons behind the scores. This has the potential to indicate the most common pitfalls repelling your customers as well as opportunities for further growth of customer loyalty and satisfaction.
Make sure the identified problems are dealt with as soon as possible and communicated to the frontline people, like sales and support staff. Also, pay attention to the advantages that promoters are most happy about—working on those can be a factor in more new customers coming and staying with you for a long time.
Building an Effective Marketing Strategy to Get More Loyal Customers Using NPS Data
Marketing can benefit from the insights provided by NPS and use them for customized campaigns. Their goal is to turn detractors and passives into loyal customers and reward advocates for being with your company. The way to achieve this is to segment existing customers based on their responses to the NPS survey and create offers for each segment.
Promoters
Since they usually buy from you on a constant basis, discounts should not be the key policy for treating promoters. Instead, think of valuable and relevant surprises as a way to show you care for them. Exclusive offers, pre-sales, event invitations, and personalized gifts can hit the spot. Nevertheless, if you’re about to offer discounts to new customers, make sure your fans can benefit too. Otherwise, you risk turning your happy customers into disappointed and angry ones.
Passives
Usually, passives are the less happy customers who aren’t committed to buying from you, have a shorter buying history, and don’t engage with you often. The secret to winning their trust can be in keeping your company top-of-mind, making them spend more time with you, or checking out more features/functionalities.
Therefore, cross-sell and upsell offers, as well as bundled product discounts that stimulate passives to extend their product use, would be most appropriate.
Detractors
These customers most likely have a negative experience with your business or encountered problems that caused frustration. They might require extra attention and incentives to turn the situation around.
First and foremost, it is crucial that you communicate personally with them to acknowledge the issues and check that the problem has been resolved. It may be a good idea to offer some freebies or discounts to compensate for the inconvenience. Next, have staff members pay extra attention to such customers when they are about to make a purchase and do your best to ensure their future experiences with your company are positive.
Bottom line
It goes without saying that Net Promoter Score data is beneficial for building an effective customer loyalty growth strategy. It allows you to identify three groups of customer segments and tailor your marketing approach to each.
It would be a huge mistake to leave out the loyal customers when trying to re-engage the disengaged and unhappy ones. By acknowledging how important they are for your company and rewarding them, you ensure more repeat business and increased revenue.
Finally, integrating your NPS tool with the CRM software will provide an even more in-depth insight into how and why your customers evaluate you.
All in all, with the right data and the right approach, you can change how customers perceive your business and shape your success by caring about your customers' success.
