More often than not customer loyalty metrics are measuring the wrong things. They measure what the company thinks is important to the client and not really what the client is basing his decisions on.
This skew in the reporting can very mean that you are missing the picture completely and are not really focussing your attention on what really matters.
A Metric And A Discipline
Using a measurement tool such as Net Promoter means that you can cut through all the technical set up and question structuring and ask your clients one simple question. “How likely are you to recommend my company?”
This powerful, yet simple question cuts straight to the core of customer loyalty: “Have I treated you in such a way that you would be willing to tell your friends and colleagues to use me?”
The scores are based on a simple 1 – 10 scale. Those scoring you as a:
- 9 or 10 are your company’s promoters.
- 7 & 8 are passive.
- 0 – 6 are detractors.
The Net Promoter Score (NPS) is the Percentage of promoters minus the percentage of detractors. The higher your NPS, the better you are doing.
Clear, Relevant Customer Segmentation
By having your clients broken into these 3 simple groups, a very clear picture emerges on which clients you need to focus your efforts. Further to that, we can dig deeper in to the detractors group and find out why they have an issue with you and then correct along the way.
NPS is not as simple as I have make it out to be. There is quite a bit of science behind the structuring of follow ups with detractors and then the questions that you ask them to try and find out why they are in the detractors group.
About Michael Cowen
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