Do your customers love everything about doing business with you? Or are there some areas they think you need to improve in?
If you don’t know the answer to these questions, then it could be that you have unhappy customers without realising it. And of course, unhappy customers are unlikely to become repeat customers, and may even tell their friends not to do business with you.
So how can you discover if you have unhappy customers, and how can you put things right?
One of the easiest systems to use is Net Promoter Score (NPS). NPS has been around since 2003, and is a really easy way to see where you’re getting things right, and where you need to improve things.
In this guide, we’ll look at how you can use NPS to deliver a better service to your customers.
What is NPS?
NPS was developed by consultancy Bain & Co. They tried to find the best question to ask customers in order to predict revenue growth over time.
That question turned out to be “On a scale of 0-10, how likely are you to recommend a particular brand, service or product to your friends or colleagues?”.
Once customers have answered that, they’re split into three groups. So if customers answer 0 to 6, they’re your detractors, who are customers that are likely to not use you, or talk about you negatively.
If they score 7 to 8, they’re your passive customers. They’re generally satisfied but they might well run off if they see a better offer somewhere else. They don’t particularly love you.
Customers who answered 9 and 10 are promoters. They’re company advocates. You want as many of these as you can because they’re more like to buy more products, or use your services more often and spend more money.
They’re less price-sensitive and they also act as a free extension of your marketing efforts through positive word of mouth, encouraging other people to use you, defending your brand in public and that sort of thing.
So with NPS, you can understand what proportion of your customers fall into each group, and then gather the feedback from each set of customers and find out what’s going wrong and work how to fix it, and what’s going well, so we can do more of that.
As well as individual scores, you’ll also be able to calculate an overall NPS score. This is done by subtracting the percentage of customers who are detractors from the percentage who are promoters.
The score can range from -100 (everyone is a detractor) to 100 (everyone is a promoter).
Although the overall NPS score is a good way of measuring progress, it’s not actually the most important piece of information you’ll get from this process.
This is because the NPS score on its own can’t tell you why people like or dislike your business.
In order to do that, you’ll need to ask a question that allows people to explain the reasons behind their score.
So, something like “What are the main reasons you gave the score that you did?” should work well.
By doing this, you’ll be able to gather detailed information on what people really think of your business.
How can my business use NPS?
Obviously, the first thing you need to do is find some way to survey your customers. If you have a large number of customers to survey, the easiest way to do this is by using a tool like Survey Monkey, which has an NPS survey template that you can use.
(There are free and paid for plans, so see which best suits your needs.)
Then you’ll need to email the survey to your customers. Something like the 123 Reg Email Marketing tool will help you do this.
Alternatively, if you have a small number of customers, then you can actually carry out the survey face-to-face. Just be sure you don’t encourage people to give you a high mark by saying something like “if you think we’re good, you should mark us 9 or 10”, because if you do, your results won’t be accurate.
Once you get your survey responses, you can download them into a spreadsheet and calculate your NPS score. (If you’ve used Survey Monkey, it will calculate the score for you.)
When you’re just starting out, the NPS score won’t be of much use. However, you should compare it to the average NPS score for your business sector, to see how you compare to your rivals.
Over time, the trend of the score will help you see whether you’re heading in the right direction.
However, the most useful parts of your survey data will be the responses to the narrative questions we talked about earlier.
The reasons people give for scoring you poorly will help identify areas where things can be improved.
At 123 Reg we invest a lot of time in listening to the needs of our customers. One such example of this was that some customers found it difficult to find exactly the information that they were looking for on our customer support site. By taking on this feedback, we have redesigned it to make it easier to navigate.
So if you find the same issue is cropping up again and again in the responses to these narrative questions, then try to address that problem as quickly as you can.
You should also get back in touch with customers who made criticisms of a certain aspect of your business to discuss their thoughts on how things can be improved.
Not only will this show customers that you are listening to them, but it will help you get an even better understand of how you can improve things.
It’s also important that you understand the root cause of an issue. For example, if a customer is unhappy because a product arrived damaged then you need to work out where that damage occurred, so you can solve the problem. If it was damaged before leaving the warehouse, then that’s a different issue, and a different solution, than if it was damaged in transit.
Finally, make sure you “close the loop”. That means getting back in touch with customers who had problems, and explaining what you’ve done to fix things.
Of course, it’s not only criticism that can drive change in your business, if you get positive comments via your NPS survey, you should identify why that particular customer is so happy, and use that reason to help drive positive change in your business.
It’s also vital that you consider all of a customer’s feedback. Sometimes you’ll find that the same customer says something positive and something negative in the same comment. It can be tempting to view this as positive feedback, but if you do that, you’ll miss out on learning about an issue that could be affecting your other customers too.
NPS might sound complicated, but in reality it’s an easy way to gather a lot of information about what you customers really think.
With tools like Survey Monkey, and the option to conduct face-to-face interviews, businesses of all sizes should be able to quickly and easily set up an NPS scheme.