Take a second and think, how do your best, most loyal customers act? They don’t just engage with your brand once but return again and again. Astute CX professionals know that return customers (and customer retention) are the backbone of a business. Why?
In short, what this means is the revenue stream you have been working for is already there, waiting to be utilised. In fact, it has been doing cartwheels right under your nose hoping to get noticed.
So, Customer Retention is important for long term growth. And, Net Promoter Score® is brilliant loyalty metric. In a sentence, NPS® measure the referability of your brand. It quantifies whether your customers like you enough to want to refer you to others.
It is based on 1 simple question. Which is,
On a scale of 0 to 10, how likely are you to recommend (a product/service) to others?
The net score is calculated by subtracting the percentage of Detractors from Promoters.
(To read about how you should analyse NPS® to predict Financials, go here.)
One of the biggest strengths of a Net Promoter Score® program is that it divides all your customers into three main categories, based on their score.
These categories are-
(More on that, here)
Now, no brand can completely avoid customer complaints. But you can handle them effectively so that your customers feel heard. Net Promoter Score® makes it easier for brands to understand how their customers feel about them.
What’s more, since NPS® is a real-time feedback metric, you can promptly contact disgruntled customers and deploy a close looping mechanism to engage them. Basically, NPS® helps you identify your most at-risk customers and lets you reel them back.
This not only helps in increasing Customer Retention but also assists in building Brand Loyalty, the holy grain of all CX practices.
Customer Retention is crucial for prolonged growth. Think about it. Brands spend a massive amount of money on marketing, trying to get new customers who usually only give you ONE shot. Doesn’t it make more sense to spend resources nurturing your relationship with the customers you ALREADY have?
Loyal customers are not a (revenue) gift that keeps on giving. They are also your cheapest and most effective advertisers. (Everyone now knows that word-of-mouth advertising is gold). So, there really is no good reason for you to not utilise NPS® for Customer Retention in your CX initiative.
Want to learn how to turn indifferent customers into ardent fans of your brand?