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How one group of customers can cause serious Net Promoter Score problems

Posted by Perceptive Customer Insights Team - 26 March, 2018

Blog_How-one-group-of-customers-can-cause-serious-Net-Promoter-Score-problems

There’s something wrong with your Net Promoter Score.

It isn’t low. It hasn’t dropped. These are obvious Net Promoter Score problems—easily spotted, and hopefully easily resolved.

No. You are dealing with something far more insidious. You are dealing with the only true death of any business:

Stagnation.

And it’s caused by one small group of customers.

 


 

The law of diminishing returns

Consider the 80/20 rule: 20 per cent of your customers will create 80 per cent of your revenue. A similar phenomenon occurs with your NPS; a small, vocal minority of customers can pull a handbrake on your overall performance at higher scores.

Read more: What is a good NPS score?

Once you reach a certain level in your NPS, you will begin to see smaller and smaller gains. After you have reached out to and appeased the majority of your customers, your NPS gains will slow, and slow, until you plateau and can’t quite shift it any further.

Moving from 10 to 20, for example, is far easier than moving from 50 to 60—depending on your industry benchmarks and averages.

The key to breaking that ceiling is to forget, for the moment, the vast majority of your customers and instead seek out those customers who are ambivalent about your products or services.

Only once you’ve found them, and their distinctive qualities, can you begin to convert them.

 


 

An example

Pretend that you are the owner of a clothing retailer. You sell a wide variety of products, each of which appeal to different people—but most of your products will fall into the middle of the bell curve; medium sizes, moderate colours, common fits and styles.

Over time, your NPS plateaus, as you exhaust opportunities in this ‘average’ space.

Once you hit the plateau, it may be tempting to think that you need to keep switching up your core product line to keep boosting your score, but the reality is that this well is tapped out. Any gains you see will be small—at best.

Instead, it’s time to look out to the fringes. Find out what your passives and detractors aren’t happy about. Perhaps you need to expand your product line to include smaller and larger sizes to capture the fringes, or maybe it would be best to start investing in more outlandish cuts and styles. Your core product offering will continue to appeal to the vast majority and keep your NPS steady, but your efforts in the fringes will convert your remaining detractors and passives, helping to boost your NPS to new heights.

 


 

Going for the 20, not the 80

By appealing to the vocal minority, the 20, rather than the 80, you can breach that plateau. But in order to do that, you need to know what they are actually upset about—and acknowledge that they are upset in the first place.

This is why any NPS software that you use needs to have the ability to segment and isolate this minority of problems from the majority. In Customer Monitor, users can apply segments to do exactly this, and quickly find details—including commentary and suggested areas of improvement—of those few remaining customers and clients they need to convince.

If you find that your NPS is plateauing, it may be time to shift your focus from the happy majority to the dissatisfied minority.

 


 

To find out more about finding commentary from your most important customer segments using Customer Monitor, check out this tutorial here.

 

Get in touch now! 

Topics: Market Insights


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