With this powerful knowledge, you can, among other things, understand how you are performing and how well you are retaining your customers and how loyal they are likely to be to your business.
If you've wondered how to increase customer retention, NPS can help you attain your business goals, here we explain how NPS can help do just that.
NPS: a reality check like no other
Often, NPS is a reality check for companies, as it exposes how their business is performing. It’s also an indicator of future growth as you are in effect measuring your customer satisfaction levels (the potential for repeat business—customer acquisition—and word-of-mouth through positive referrals). If you feel that you’re missing something when it comes to your customer retention, NPS might be just for you.
Related content: How to acquire new customers and retain them
Save the customers you're about to lose
With the NPS methodology, you can identify and personally contact your "most at risk" customers, those who are most likely to stop using your products or services, and save them as customers by resolving the situation quickly. In addition, you'll get a valuable insight into why they'd want to leave. With that knowledge you will immediately know what you need to improve on to retain your existing customers, and acquire new ones.
Measure your customer loyalty concretely
To actually put a concrete number on how loyal your customer base is, many companies today across the globe use the Net Promoter Score as an established method for measuring loyalty over time because it’s not only easy to use but also has a direct connection to profitability.
You're essentially measuring your customer satisfaction and the likelihood of your current customers to recommend your business, thereby you're able to measure your customer loyalty and retention rates.
Not convinced? The following is a statistic that we love to use to describe this. It has been demonstrated that companies with the top NPS scores in their industry outgrow their companies by 20 per cent.1
Getting strategic, actionable insights will mean that your customer feedback survey will pay for itself in the long run, and you’ll able to make solid business decisions based on the insights provided. Check out our case study on howWesfarmers made customer experience work for them.
Customer retention trumps acquisition any day
When you know how many of your customers are unhappy, and what you need to know to keep them loyal, you are on your way to increasing your customer acquisition rates. Basically, keeping your existing customers loyal is more cost efficient than constantly trying to acquire new customers. The stats say it all: a 5 per cent lift in customer retention will actually result in an increase in profit in upwards of 30 per cent.1 Having invested into your CEM solution will pay for itself when considering the lifetime value of saved customers.
Related content: How to cut through the noise to acquire new customers
Know the score
Watch the magic happen
Using NPS is an ideal way to manage your retention levels as it enables you to develop a long-term relationship with your customers that is authentic and real. The insights NPS gives you are valuable and actionable. By using NPS, knowledge really is your best asset.
The magic lies in how you actually leverage the information that transpires, and how you follow up with the respondents and thereafter engage them.
It’s a score that provides a trusted perspective of your position in relation to other companies and industries, it’s easy to understand and means you don’t have to analyse the results of a large and complex survey.
To learn more about how you can use NPS for your business, get our free e-book on how to leverage NPS: "Capture the power of the Net Promoter Score® - the Leaders Guide".
NPS enables your business to:
- Measure how healthy your customer relationship is over a period of time, and do so continually
- Receive actionable customer data, identifying and targeting important customer segments and even competitors.
- Close the loop between employees and customers to make sure you improve your services on a continuous basis
- Understand what exact initiatives create your promoters and detractors
- Track your customer experience to identify the key touch-points where you can improve your service, resolve issues and provide additional support.
Want to learn the top industry secrets to customer acquisition and retention? Download our ebook below:
- Bain & Co.