Want to improve your NPS? Here are 6 proven action plans to increase your net promoter score and gain more loyal customers in 2022.
We live in a customer-centric business world, where
customer experience is regarded as the “king”. It is the most important
indicator of your company’s success, after all a satisfied and happy customer
is the one who is likely to become a loyal customer, and in turn boosts
revenue. That is why more than two thirds of companies say they mostly compete
on improving experiences, instead of outdoing each other with new product
features or constantly engaging in price race.
But, then how to accurately gauge customer
experience and their loyalty to your company?
The answer is simple: Net Promoter Score, in short
NPS.
NPS is a metric that companies use to measure
customer experience, satisfaction and loyalty. Besides, it allows you to
benchmark yourself against your competitors and observe how effective your
consumer-oriented decisions are. Having, a high NPs simple means that customers
are happy with your brand, and would like to continue with your products or
services and will recommend the same to others. Consider this an average NPS
increase of 7% correlates on average with a 1% growth in revenue (Source:
London School of Economics).
Look at companies such as Nike, Amazon, Apple,
Netflix, etc. who have been able to maintain consistently high NPS, and have
been able to build up their brand into the market leaders they are today.
Given its significance, improving NPS has indeed
become a necessity for the businesses?
How to calculate NPS?
But, before going further, let’s quickly understand
as to how to calculate NPS and what is considered as a good NPS.
Typically, NPS comes in the form of a customer
survey typically sent to the customers at least twice a year. To calculate NPS,
survey customers and see how likely they are to recommend your business on a
scale of 0-10.
- Start with the standard one question which is “on a scale of 0 to
10, how likely are you to recommend this business to a friend or a
colleague?”
- Categorize the responding customers according to their scores:
Detractors (0-6), Passives (7-8), and Promoters (9-10).
- Subtract the percentage of Detractors from the percentage of
Promoters to determine your overall NPS.
Generally speaking, a NPS that is below 0 indicates
that a business has a lot of customer satisfaction issues to address. A score
between 0 and 30 is better, however, you can still improve, while a NPS higher
than 30 indicates that the company has quite a good number of happy and
satisfied customers.
How to get a better NPS score?
Now that we have understood the fundamentals of
NPS, let us review the action plans for increasing your NPS to improve and grow
your business
We have come up with the four major action plan
that will help you to improve your NPS score:
- Focus on better customer experience (CX)
Customer experience (CX) is incredibly valuable for
all the businesses, and over the time it has moved from being a competitive
differentiator to a key business imperative. Companies that lead in customer
experience are now outperforming their competitors by nearly 80%.
“71
percent of people recommend a product or service because they received a “great
experience”. - PWC Report
Without being customer-focused, it is difficult for
businesses to stand out of the competition. So, it is essential to know your
customers’ needs and expectations and aligning your solutions closely as this
will encourage customers to be loyal towards your brand and increase the
satisfaction rate.
Besides, being customer-focused means businesses
should put the effort into understanding the customer journey to identify their
needs and expectations. Though, understandably, your customers are likely to
have different journeys in accordance to their touchpoints and engagement
level, so you need to undertake an all-inclusive customer journey mapping to
know your customers’ persona, understanding their needs and desires, framing
out their touchpoints, and more importantly identifying their pain points.
Subsequently, recognize the journey that is pushing the net promoters and
detractors. Once you are aware of your customer journey, you can definitely
improvise on the touchpoints that are driving your net promoters and
detractors, while delivering an excellent customer experience.
2. Segment your customers to
create tailor-made strategies addressing each segment
Customer segmentation is important for understanding
your customers. You can segment audiences based on revenue, products, service
plans or customer personas. NPS naturally segments customers into three
categories – the Detractors (customers scoring between 0 and 6), Passives
(customers scoring between 0 and 8), and Promoters (customers those who respond
with 9 or 10). By diving them into these three segments, you can gain valuable
insights into your customers and leverage your NPS data better. Subsequently,
you can create tailor-made strategies to address each segment by focusing
better on their needs & pain points, your value proposition, and customer
service experiences, and thereby improving them further.
3. Swiftly Follow up with Detractors
For those companies who ignore detractors, it simply
means that they have lost that customer forever. However, if you follow up on
negative feedback quickly not only can you help negate the impact of that
review, there’s a good chance you might also retain (repeat) that customer or
even, turn them into a promoter gradually by showing your attention &
efficiency. For this, it is essential that you get in touch with your
detractors quickly and directly. Let them know that you value them and you are
following up their issues, and try to understand their perspective.
4. Incentivize Your Promoters
Though efforts should be made to make every
customer feel special, but it is important not to forget to nurture you
promoters as they are the largest revenue generator of any company. Remember
that you cannot afford to neglect and just focus on detractors or take this
segment for granted as this could in turn drive away your loyal customers. They
could perceive your actions as rewarding those who complain while they
themselves are getting nothing for their loyalty.
One of the best ways you can opt for is giving them
incentives such as discounts, free giveaways, VIP events, free upgrades and
special buying opportunities to them as these can certainly help in both
acquiring and raising your net promoter score, while also encouraging customers
to give you reviews for your NPS metrics. Besides, to improve your NPS, you can
create a loyalty program or revamp your existing customer loyalty program to
regular customers to demonstrate that you value their relationship.
5. Measure customer feedback regularly to improve
NPS
Keeping a regular check on the scores is an
important way on how to improve NPS. No matter if your scores are consistently
good, still you need to monitor and measure it regularly. By making
improvements continuously based on the score results, you can witness further
improvement, and failing to do so will impact your loyalty. The key area of NPS
rests in the customer insights gained through regular implementation of
surveys, based on which you can develop strategies to improve customer loyalty.
Know and improve your NPS!
Finding your NPS is a great place to start, but
finding out what is behind it and constant monitoring NPS takes your business
to the next level. It not only helps you gauge customer satisfaction and
loyalty but also helps you identify ways to improve, prioritize reaching out to
the detractors, and boost referral marketing. And, as you know referred
customers have a 16% higher lifetime value and ROI than others!
So, are you ready to discover your Net Promote
Score (NPS) and what is driving it? Comment below.
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