How do you make important day to day consumer decisions ? Who do you consult when choosing a service provider ?
- 83% of people trust a recommendation from a colleague, friend or family member
- 66% of people trust other consumers opinions provided through online forums
That proves that referral marketing plays a more and more important role
The real question is, how do can we measure it ? Net Promoter Score (NPS)
Its simple isn’t it ? NPS only consists of two questions:
- How likely are you to recommend your brand to a friend ? and
- Why ?
Seems pretty straight forward to me.
The NPS scoring system divides all responders into 3 groups:
- Promoters (answered 9-10): typically loyal and enthusiastic customers likely to recommend you
- Passives (answered 7-8): currently satisfied but easily tempted by your competition
- Detractors (answered 0-6): unhappy customers, a high likelihood for negative word of mouth, high churn rate.
An average NPS increase of 7% correlates on average with a 1% growth in revenue. Isn’t that a solid reason to think about how to increase your NPS.
Keep in mind that NPS only becomes a truly valuable metric, if its “why”-question is properly collected, analysed and heard.
The golden source is WHY – it shows why customers gave this or that score and allows you to get inside their head.
A number simply isn’t enough.
How to collect NPS:
- Get the wording right
- Why did you give that score ?
- Collect the information in the right way – when ? the right time is paramount and you can only do this if you understand the journey pain points
- Consistency – reschedule in 90-180 days
- Where – website, mobile app, support call, non-digital ? If you don’t understand your customers preference, try all options to understand where you achieve the greatest uptake
- Divide the responses into 3 buckets – positive, neutral or negative – seek the assistance of technology to scan this feedback and cluster as it can be time consuming analysing thousand of responses
- Have faith – consumers will typically always mention the most important things on their mind
At the same time, the NPS segments: promoters, passives, and detractors can quite accurately predict how those customers would keep the relationships with the brand.
- Promoters are more than five times as likely to repurchase from companies
- More than seven times as likely to forgive companies if they make a mistake
- Almost nine times as likely to try new offerings from companies.
Promoters also recommend a company to an average of 3.5 people and to the contrary “If you make customers unhappy in the physical world, they might each tell 6 friends. If you make customers unhappy on the Internet, they can each tell 6,000 friends.”
More than a third of all companies don’t regularly ask customers which leaves them in the dark about what matters most to their customers.
Net Promoter Score gives you a chance to do both. NPS is very easy to implement for businesses and is very fast and simple for customers to understand.
By using NPS properly, businesses can achieve great results, growth and start benefiting from being surrounded by promoters.
Contact THINK Global to track your NPS performance and understand the why.
Leah McConville – Account Manager