The Net Promoter Score (NPS) is a powerful metric that allows you be the fly on the wall when it comes to understanding what your customers think of your brand. From insight into the strengths and weaknesses of your customer journey to identifying unhappy customers who are at risk of churning and resolving their issues, NPS can also play an important part in your customer retention strategy.
Related content: How to aquire new customers and retain them
NPS: a reality check like no other
NPS can be a reality check for your organisation as it exposes how your business is performing. It’s also an indicator of future growth as you are in effect measuring your customer satisfaction levels (the potential for repeat business—customer acquisition—and word-of-mouth through positive referrals). If you feel that you’re missing something when it comes to your customer retention, NPS might be just for you.
If you're not familiar with the Net Promoter Score (NPS) here's a brief rundown of what it is and why it's so valuable for businesses all over the world.
NPS enables your business to:
- Measure how healthy your customer relationship is over a period of time and does so continually.
- Receive actionable customer data, identifying and targeting important customer segments and even competitors.
- Close the loop between employees and customers to improve services on a continuous basis.
- Understand what exact initiatives create your promoters and detractors.
- Track your customer experience to identify the key touchpoints where you can improve your service, resolve issues and provide additional support.
Related content: How to cut through the noise to acquire new customers
Using NPS to monitor and manage customer retention
According to Bain & Co (the creators of the NPS methodology), a 5 per cent lift in customer retention produces more than a 25 per cent increase in profit.1 With this in mind, it makes sense for businesses to cultivate a loyal customer base and respond quickly to unsatisfied customers before they churn.
This is where NPS can help.
With NPS, you can identify and personally contact your most at-risk customers, those who are most likely to stop using your products or services. By resolving their issues quickly there's a good chance you can prevent them from leaving. In addition, you'll get valuable insights into why they want to leave. With that knowledge, you can make improvements to better retain your existing customers as well as acquire new ones. Lastly, the methodology also helps you to develop a long-term relationship with your customers that is authentic and real, which will keep customers coming back over and over.
Not convinced? Check out our case study on how Wesfarmers made customer experience work for them.
Want to learn the top industry secrets to customer acquisition and retention? Download our ebook How to acquire new customers and retain them below:
- Reichheld F., Loyalty Rules! How Today's Leaders Building Lasting Relationships, Harvard Business School Publishingm, 2001. Available at Bain & Co. www.bain.com
