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Businesses understand how important an excellent customer experience is. Many companies go to great lengths to maximize the customer experience in hopes of increasing business growth.

At the very least, they hope to maintain their customer base. Yet, how does a company know if it has been successful in their goal? One popular method is measuring a business’s Net Promoter Score. Utilizing a customer service software helps aid in this process.

How Does the Net Promoter Score (NPS) Work?

The NPS is a measuring tool used to determine how loyal or connected your customers are to your brand or business. Why is this important? Connected customers yield greater returns than customers who are only lukewarm or worse yet, cold. Characteristics of connected customers are evident by their enthusiasm and loyalty. Therefore, it follows that the Net Promoter Score (NPS) gets to the root of these characteristics with one question: “How likely are you to recommend this business to other people?” Customers are given a scale on which to rate the business — 0 being not likely to recommend and 10 being extremely likely to recommend the business. The customer falls into a category based on the score he or she gives the company.

• Detractors score 0 – 6

• Passives score 7 – 8

• Promoters score 9 – 10

The company tabulates the NPS by simply deducting the percentage of detractors from the percentage of promoters. Based on this, it’s obvious that increasing your promoters and eliminating your detractors will improve your score. But you may be wondering, what’s in a score? Does it really matter? The answer is yes, it does matter to the success of your business. Research reveals that there is a “strong link between organic growth and a company’s Net Promoter Score relative to the relevant competitors in its industry.” Pumping up the score, then, will lead to an increase in the NPS.  Let’s look at each of these categories a bit closer to see how companies can increase the score.

The Benefits of Promoters

Promoters are the people who are extremely likely to recommend your business to others. The value of these customers cannot be overstated. Here are a few of the tangible benefits (from Bain & Company):

• Free advertising: Word of mouth advertising is among the best forms of advertising. Nielson reported, “92 % of consumers believe recommendations from friends and family over all forms of advertising.” Furthermore, 64% of executives believe word of mouth advertising is the “most effective form of marketing.” Net promoters are a powerful channel to boost business for the company.

• Less maintenance=Saves Money: Highly satisfied customers do not complain as much as the other groups. Complaints require employee assistance. Those who do not need as much maintenance save the company time and money.

• Purchasing power: Happy customers tend to buy more products.

Eliminating Those Detractors

Detractors put a drain on the company. Not only are they unhappy with the company, but according to a recent survey published in Inc.com, 75% of detractors are likely to tell others about their negative feelings. This can have a drastic impact on your company because so many people believe their friends. Leaving is bad enough, but spreading negative reports about a business has multiplied repercussions. For example, if Joe tells five friends about the bad experience he had with Company X and they each tell five friends who tell five friends, it adds up fast, wreaking havoc to Company X. In the age of social media, negative reviews multiply by the hundreds or even thousands depending on the number of Twitter or Facebook followers a person has. Companies will always have some detractors, but catching them before they leave can help minimize their potential damage in four ways:

• Gain insightful feedback for future customers.

• Use extended dialogue to address their complaints.

• Prevent them from leaving by resolving their issues.

• If they decide to leave anyways, they will most likely not put out negative reports about your company. Thus, you minimize the damage.

What About the Passives?

Most businesses look at increasing their score by eliminating the detractors. So, much is written about the promoters and detractors, but not as much attention is given to the middle group referred to as the passives. Some companies may ignore them altogether because they are not openly complaining or overly vocal. Yet there are some good reasons a company may want to take another look at the passive group:

Positive characteristics of passives

• Passives are only a step away from being a promoter so they may not require as much work to bump them up to that level.

• Any addition to the promoter column is going to increase the NPS.

• Passives are individuals who, unlike detractors, do not despise the company. So, they do not say negative things about it.

Negative side of passives

• They are lukewarm.

• They are unenthusiastic.

• They are not loyal so other options may catch their eye.

• They are vulnerable to leave. 

If companies delve deeper into what motivates and excites the passives, they will move some of these up the point or two needed to become a promoter.

Conclusion

When companies understand the workings of the Net Promoter Score (NPS) on businesses, they gain a useful tool that delivers financial gains. At the heart of the NPS is the customer experience. Businesses who dedicate to customer loyalty will reap an increase in scores and see a greater ROI. At Vision Helpdesk, we specialize customer service software. Contact us for more information about the increasing your Net Promoter Score.