Have you ever wondered why you feel an attachment with some of the brands you interact with, even after they mishandled your last order or service? While there may be many reasons, brands people love all have one thing in common: a customer-obsessed culture coupled with operational excellence.
These brands, have implemented systems that enable them to be close to customers and discover new ways to deliver superior product and service experiences. One of those systems is Net Promoter Score (NPS), which measures the likelihood of customers to recommend a company's products or services.
The intriguing part of the NPS System is an open framework that you can adapt to fit within both the type of business you are in and the cultural differences surrounding your organization.
This brief shows you the core building blocks of NPS and offers insights into how to implement them within your organization to increase customer loyalty and improve business results.
Accessing the full benefits of an NPS System requires the organization to view NPS as a long-term strategy commitment in which the adjustments are made across the entire company. It is a complete overhaul, but one proving to be the greatest asset to a successful business in this day and age. The system is about more than improving an occasional CX; it is not a short-term or intermittent project. It requires executive commitment, dedicated leadership, widespread acceptance, financial investment, and ongoing review and flexibility to adapt as necessary. This is not an initiative that will be wrapped up in a few months but rather an ongoing process that will become an integral and pervasive part of how you do business.
So, why NPS? Simply put, data shows that leading brands who made this commitment and adapted their organizational structure tend to grow at more than twice the rate of their competitors.
The benefit is well worth the organization-wide commitment and strategy overhaul. Business thrives on growth, so aligning the NPS System to corporate objectives is key to ensuring its successful adaption. Any successful CX initiative understands the value of the effort and the investment that it requires. it is important to set the right expectations at all levels in the organization, meaning applying the right benefit to the right level of management and team.
At the highest level, the C-Suite, management cares about business growth and alignment. Within management and operations, priorities are still growth-focused, but revolve more around what can be controlled in this environment i.e. keeping customers satisfied and controlling costs.
Business growth can be achieved by boosting revenue from products and services or by increasing the profitability of the operation by minimizing costs. Revenue increases usually come from one of the following four sources:
According to Word of Mouth Marketing Statistics from 2020, people are four times more likely to buy a product or work with a business when referred by friends.  Therefore, keeping customers happy and focusing on customer loyalty is not just important for existing business but for future business as well.
"Without trust, there can be no loyalty - and without loyalty, there can be no true growth."
- Fred Reichheld
The Q2 2020 Economics of Net Promoter Score (NPS) Benchmark study by Qualtrics XM Institute found that NPS is strongly correlated with the quality of customer experience a company delivers and that promoters are significantly more likely than passives or detractors to exhibit all three key loyalty behaviors (purchase more, trust, forgiveness) – to name a few examples by vertical.
● Banking: Promoters are
● Health Insurance: promoters are
● Software: promoters are
The core benefit of the system is driving growth. But there are three indispensable benefits of the system as well:
Some top brands that reap the reward of this system include Amazon, First Republic bank, Apple Retail, and Intuit. Despite minor hiccups or inconveniences, customers are staunchly loyal to these brands.
Successful systems must be updated every 18 to 24 months as changes continually occur in the customer base, market, employees, management, and processes.
Updates will ensure system robustness, put your customer at the center of everything you do, and continuously drive improvements and actions on their behalf.
As Bruce Temkin sums it up, "Promoters are significantly more loyal, so most businesses would do well to create promoters and decrease detractors." Does your NPS System creating more promoters? Schedule your free one hour call with us at firstname.lastname@example.org.
Net Promoter Score, Net Promoter, and NPS are registered trademarks of Bain & Company, Satmetrix, and Fred Reichheld.
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