Customer Satisfaction Pays Off
When you’ve placed an online order, reviewed an app or product, or responded to a mobile survey, have you ever been asked, “On a scale from zero (low) to ten (highly likely), how likely is it that you would recommend my company/service to a friend or colleague?” This question is evidence that someone is trying to boost their Net Promoter Score. It is used by many of the most admired companies in the world to measure loyalty, customer intimacy, and their reputation.
Respondents to this question are ranked by their score:
Promoters — Respondents giving a 9 or 10 (customers who are more likely to promote you)
Passives — Respondents giving a 7 or 8 (customers who are “just OK,” or on the fence about you)
Detractors — Respondents giving a 0 to 6 (unhappy, angry customers)
To calculate your actual Net Promoter Score, take the percentage of Promoters, and subtract the percentage of Detractors. It is that simple.
NPS = % Promoters - % Detractors
For example, if 66% of your respondents are Promoters and 14% are Detractors, your score would be:
68% – 14% = 54
That’s a very good score, because more than half of your customers are Promoters…and they are happy with you!
But if 15% of your respondents are Promoters and 45% are Detractors, your score would be:
15% – 45% = –30
That’s a low score, and you should immediately investigate why.
According to ClearlyRated, while organizations like Amazon or eBay operate at an NPS between 50 and 80, while insurance agencies averaged only 28 in 2019.
The importance of the Net Promoter Score is that it gives you insights into your customer loyalty spectrum. As you move up the scoring scale, from 0 to 10, customers will defect at lower rates, spend more, and move from negative word of mouth to positive.
Why is the Net Promoter Score so important?
According to Forrester, better NPS performance correlates to increased revenue. Their 2019 study found that leading customer satisfaction organizations received the following benefits over lagging companies:
- 5.1 times revenue growth,
- Customers are 4.5 times more likely (and willing) to pay a premium, and
- Costs to provide service to clients lowered when the customer was satisfied.
Customer Experience Is All About Perception
To achieve this type of success, you must have a systematic approach to your customer experience journey.
Describe a recent experience that far exceeded your expectations. One that blew you away... driving your emotions in an exhilarating way. Was it a restaurant you visited? The birth of a child? The trip to Disney? Whatever experience comes to mind, two things are probably true:
- After you left that experience, you told others about it, and
- During the experience, you probably felt a strong emotion.
Exceptional customer experiences are made up of the two items above – they elicit emotion, and they make you want to tell people about it.
Consider each step of your customer experience journey. Start from the time they Google insurance agencies in your town to their interaction with your risk consultants to their experience with your account managers. Ask yourself two questions:
- Where can I enhance the experience to drive emotion?
- How can I make it memorable to the point that my clients can't wait to tell the world about it?
Improving your NPS is an ongoing process. By reviewing these two questions and implementing the answers, you’ll discover that people can’t wait to tell their friends about you!