Just how loyal are your customers? Think about this: A Harvard Business Review study found that 48% of customers who had negative experiences with a company told 10 or more people. Eek! Talk about some bad word of mouth! Not exactly something you want in a business, is it? So if you don't have a clue about how satisfied your customers are with your products or services, you might want to consider putting a system in place to figure out just that.
Luckily, there's a pretty simple survey method to help you determine how loyal your customers are. The Net Promoter Score, or NPS, is a customer satisfaction metric that measures, on a scale of 0-10, the degree to which people would recommend your company to others. To calculate NPS, you subtract the percentage of "detractors" (customers who wouldn't recommend you) from the percentage of "promoters" (customers who would recommend you). Obviously, the fewer detractors, the better. Regularly determining the NPS for your business allows you to establish benchmarks for your business so you can figure out how to improve the loyalty of your customers.
Interested in learning more about how NPS works? Check out the helpful infographic from referral marketing software company Ambassador below for more information, including some industry NPS averages, how some big brands fare, as well as the benefits of building a loyal customer base ... referrals!
(Click infographic to enlarge.)
Want to know more about customer loyalty and retention? Then the following HubSpot blog posts are just for you!
- "7 Customer Loyalty Programs That Actually Add Value"
- "What B2B Marketers Need to Know About Customer Retention"
- "11 Ways to Give and Get Customer Love"
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Leanne Hoagland-Smith 9:40 AM on January 11, 2013
I appreciate the research behind the Net Promoter Score espcially when it comes to negative feedback.
However, how likely are we to take action and did we take action to actually make a referral for me is the Grand Canyon?
This is the Achilles' heel in this metrix, IMHO
Leanne Hoagland-Smith
Kelley 10:20 AM on January 11, 2013
Really guys? You opened with a stat that is from 2010? I usually love your articles and often look for awesome stats like these. But ONLY if they are current.
Josh 11:25 AM on January 11, 2013
Awesome resource! Great to use in our presentation. Thanks!
Ken Horst 3:51 PM on January 11, 2013
Thanks for sharing this. I'm in the process of convincing the leadership at our company to roll out a NPS program and this will help me explain it!
Jeff Epstein 9:07 AM on January 12, 2013
@Leanne,
Great point. Knowing if promoters actually refer new business is critical.
We view NPS as one the fundamental building blocks in a broader referral marketing strategy.
Once identified as promoters, it will be that much easier to give customers a call to action to actually refer your brand.
At that time, it would make sense investing in software or tools to track and manage referrals.