Most business owners agree that measuring customer loyalty is important. But in our experience, surprisingly few have a system in place. If you don’t have a reliable process for measuring customer satisfaction, you’re going to struggle to improve it.
The Net Promoter Score (NPS) survey is a useful barometer of how customers feel about your service. It can help you identify advocates and drive referrals, as well as plan for growth and investment. It can also help you spot and correct issues before they impact revenue.
There are other customer loyalty metrics out there, but NPS is the most widely-used because it’s easy to calculate, easy to understand and asks little of the customer.
Measuring customer satisfaction and loyalty is more important than ever right now. During uncertain times, customers will only spend money on services from suppliers they trust. Doubling down on the customer experience can help put you in that group.
So if you’ve been meaning to get around to it but struggling to make it happen, here’s everything you need to know to measure customer loyalty and satisfaction.
What is NPS?
NPS is the de facto customer satisfaction metric. A lot of our readers will be familiar with it, but let’s quickly recap.
NPS is calculated by asking your customers:
“On a scale of 0 to 10, how likely are you to recommend our product/service to a friend?”
You then break your answers into three groups:
- Promoters - scored 9 or 10
- Passive - scored 7 or 8
- Detractors - score 0 to 6
Finally, you detract the promoters from the detractors. So if 70% of respondents were promoters but 20% were detractors, your NPS would be 50%.
Or you can use this handy calculator.
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When and how to gather data
The best time and place to gather data will depend on how you interact with your customers, but here are a few common approaches.
If you’re using email, be sure to create ‘suppression rules’ so that you’re not asking the same customer for feedback multiple times in a short period. The general rule of thumb is to collect NPS data no more than once per quarter.
It’s quite common for CRM systems to have an inbuilt surveying function or template you can use. So before you start trying to design your own, check whether someone else has already done it for you.
Automated email after contact with your team
You want to catch customers when your business is front of mind. If you contact them out of the blue when they haven’t spoken to you for two months, they’re going to be less likely to provide feedback than if they’ve just got off the phone with your team.
Sending an automated email a short while after a written or spoken interaction is a straightforward way to gather NPS data.
If you sell physical products, a good time to send a survey could be a week or two after a new order has arrived, so you can get a sense of how the customer feels about your product.
Automated email at a set frequency
This is a less complex option. You send a survey once per quarter or every six months.
Aligned to the customer lifecycle
This is popular with digital products, but may also be of use to conventional businesses with a predictable customer lifecycle. Aligning NPS surveys with key moments in the customer lifecycle can help you identify opportunities to improve your onboarding and customer service processes.
An example might look like this:
- The first survey is sent shortly after onboarding
- A second survey is sent 30 days after onboarding to ensure the customer feels supported
- Surveys then switch to a regular cadence of every 90 days
Voluntarily (feedback section on website or pop-up)
Pop-ups or feedback pages can be hosted on your website to encourage people to leave feedback on an ad hoc basis. This can be a good way to identify snags or frustrations that you may not have been aware of.
Note: Want to speak to an experienced marketer about measuring customer satisfaction? Our part-time Marketing Directors are here to help. Book a free one-hour consultation.
How can you use NPS data?
Gathering data for the sake of it is a waste of yours and your customer’s time. The value of NPS data is what it can help you do. Here are a few ways to use NPS data.
Identify your advocates and drive word of mouth
If a customer gives you a nine or a ten, they clearly feel good about your service. You could reach out to them and ask if they’d be happy to make a referral or testimonial. You could even set up a referral scheme as an incentive to show your top customers that you value their support.
Forecast growth and secure investment
High NPS is a good indicator of future growth. If you have happy customers, you can feel confident that your product or service is viable and ready to scale. This will help you feel good about investing in the business and convince investors to do the same.
If your number of detractors rises, that’s a clear indicator that your service levels are falling and you need to find out why.
Fix customer service issues
Particularly low scores (three and under) are an indicator of a serious customer experience issue. Following up on these surveys for more information can help you identify and correct problems that could harm your business.
Tracking your NPS performance against your competitors and your industry will give you a sense of how your customer experience measures up against others’.
Asking for additional information
Quantitative data like NPS is useful, but it can only tell you so much. Specifically, it can’t tell you why someone gave the answer that they did.
A good workaround for this is to follow up your initial question with one or two follow ups:
- “What are the reasons you have us that score?”
- “Is there anything we could have done to improve the experience?”
Getting people to fill out customer satisfaction surveys isn’t always easy. A lot of people won’t even answer the first question, let alone your follow ups. But there’s no harm in asking.
However, do try to keep your survey short. Three questions should be your maximum.
Getting started measuring customer satisfaction or loyalty isn’t as complex as it sounds. In fact, the advice in this post will have given everything you and your team need to know to make it happen.
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