According to Lumeo, Net Promoter Score (NPS) is the most used KPI for customer experience, with 2/3 of customer experience directors utilising the method. NPS has become the leading indicator for customer satisfaction but what is it?
NPS begins with a fixed question; ‘How likely would you be to recommend us on a scale of 0 to 10, with 0 being Extremely unlikely and 10 being Extremely likely?’. Depending on the score given, respondents are categorised. A 0-6 score would be labelled as a ‘detractor’. This is a person who is not particularly impressed by your product/service and could potentially harm your business through negative reviews. A score of 7 or 8 is categorised as ‘passives’. These customers are largely indifferent towards your business and with neither recommend nor speak of you in a negative tone. Customers who score you as 9 or 10 are ‘promoters’. They are satisfied with your product/service, it is likely they will provide you with repeat business and will actively recommend you to their friends and family. These are the kind of customers you should be looking to increase.
Although collecting the score is important in its own right, it is the actions which follow, that are of the most value. A number becomes of little use unless you can understand the motivations which lie behind it. ‘Closing the loop’ is a term used to describe the gap left when customer feedback is left unanswered. Responding directly to negative feedback provides you with the opportunity to maximise your promotors. You can understand why that score was given and curate an action plan for improvements. It also allows you to contact existing promotors, providing referral incentives and maintaining their positive opinion of your business.
With nearly 20,000 submissions last year, Leisure-net is well experienced in dealing with NPS. Our online platform, e-Focus, allows businesses to directly manage their NPS responses and track their progress over time. Staff are alerted when submissions are received and can read comments that have been left and then choose to action the feedback if the customer has requested to be contacted. Automatic reports and analysis are also available.
Closed loop NPS is incredibly beneficial for businesses looking to progress further and enrich their customer base. It can:
- Provide a quick and succinct view of how you are currently performing
- Be easily understood by wide range of people, all ages and abilities
- Be accessed on any device, at anytime, anywhere
- Provide direction for businesses who are unsure on how to move forward
- Track changes in customer behaviour with ‘lifetime scores’
- Be benchmarked against your competitors to see how you measure up
Our client, South Downs Leisure (SDL), knows exactly the difference NPS can make to a company.
“Having a standardised measure of customer satisfaction gives SDL the ability to interact with all our members over a specified time period and more importantly directly respond to any individual comments. By addressing any issues at source and “closing the loop” managers have seen a steady rise in the overall NPS for the organisation over a 5-year period. The simple reporting tools and easy to use platform allows officers to share data and highlight positive and negative themes across our 5 Worthing based sites.” It is clear that NPS is a great solution to customer feedback woes and how important it can be for retaining customers and promoting your business further.