NPS Best Practices

The stupidly simple secret to monumentally increase your profits

Written by: Kushal Dev | Co-founder, Customer Guru

Do you know why your customers like or dislike doing business with you?

The connected world has offered immense opportunities for all of us to grow. A key criteria for growth is customer acquisition, for which we spend a lot on marketing, discounts, loyalty programs, 24 hours sale….its endless! But is this sufficient? Imagine a customer getting such poor experience that she defects even faster than she was lured through these “smart” customer acquisition strategies.

Customers should be given such stellar experience that they become loyal to you and stick around. Losing customers at a rate faster than acquiring new ones will only lead to a shrunk customer base and decline in profit.

Both Loyal (read “promoters” according to Net Promoter Score® philosophy) and not so loyal customers (read detractors) have their own lifecycle and impact the bottomline accordingly

Promoters Detractors
  1. They are happy doing business with you and hence buy more
  2. Come back for repeat purchases
  3. Recommend to their friends and family leading to more business
  4. Willing to understand your genuine problems
  5. Complain less which means service cost is low
  6. Fewer complains means happier employees
  7. Happier employees are more efficient and serve your customers better!!
  1.  Detractors buy less
  2. Unless you dominate your market they will not come back. Will defect at the first opportunity though!
  3. Spread negative word of mouth creating a –ve chain reaction
  4. Enraged at minuscule issues
  5. Escalate at every opportunity consuming more of your team’s bandwidth
  6. Dent your employee’s morale.
  7. Unsatisfied employees means low efficiency, job dissatisfaction, higher attrition!!

Since loyal customers lead to lower costs, happier employees and repeat business, its imperative that companies focus on setting a customer centric culture in their organisation.

Like any any other change this cultural shift may also face some resistance from within the company. To ensure its adoption is seamless a simple and easy to understand metric like Net Promoter Score® (NPS) goes a long way. NPS helps you quantify and measure customer loyalty.

As Peter Drucker rightly puts it

Source: http://www.strategicmanagementforum.org/

Source: http://www.strategicmanagementforum.org/

NPS with its simplicity, shifts the focus from analyzing the score to the WHY! It makes it easy to question the reason behind this score and makes the different departments in your organisation action oriented rather than the research oriented.

You can establish a flow of information across the organisation creating a social environment around it. Individuals, teams, departments and different entities within an organisation can use it as a mirror to evaluate and improve themselves.

When the teams understand how their actions directly impact customer loyalty they stop waiting for the higher management to show them the way and start thinking and taking action on how to improve customer loyalty  themselves.

A detailed explanation on how to implement NPS successfully in an organisation can be found here.

Reach Kushal at kushal@customerguru.in

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