Why is CX important?
Investing in customer experience drives revenue growth and increases customer loyalty.
According to Gartner, customer experience will be the main battleground for competing companies over the next two years. And when researchers analyzed the experience and revenue data from two $1 billion+ companies for a recent study published in the Harvard Business Review, they found that:
In transaction-based businesses, customers who had the best experiences spent 140% more than customers who had the worst experiences
In subscription-based businesses, customers who had the best experiences had a 74% chance of being a subscriber one year later, yet customers who had the worst experiences only had a 43% chance of remaining a subscriber a year later
Temkin Research shows that Happy customers are….
9 x more likely to RECOMMEND
8 x more likely to TRUST
7 x more likely to FORGIVE mistakes
7 x more likely to BUY AGAIN
7 x more likely to TRY NEW offerings
What is Net Promoter Score
A Net Promoter Score is a measure of how happy your customers are with your business. NPS is based on two core ideas.
The first is that the most reliable way to measure customer satisfaction is to is to ask how likely a customer is to recommend your business to a friend or colleague.
The second is that customers fall into three broad groups, Detractors, Passives, and Promoters.
How Net Promoter Scores work.
By asking your customers the question “How likely is it that you would recommend this company to a friend or colleague?”, and asking them to give a value from 0 to 10.
What do Net Promoter Scores mean?
The breakdown of the NPS groups goes like this:
Score 0-6: Detractors
These are customers who aren’t happy with your business for one reason or another. These customers are most likely to spread bad messages about your business, either by word-of-mouth, or on social media.
Score 7-8: Passives
These customers are satisfied, but not enthused by your business. They represent indifferent users who could be swayed to move to your competition.
Score 9-10: Promoters
Customers who love your business, and want to spread the word on your behalf.
What are the advantages of NPS to my business?
Because Net Promoter Scores are a standardised measure based on a single question, it makes it easy to compare your performance both over time and to other businesses in your industry or sector.
For your customers, asking a simple and quick question means that they’re more likely to give you a response where a more involved survey may be off-putting.
For the people in your business, it introduces a quantifiable measure, based on simple terminology; it’s an easy-to-understand measure of customer satisfaction.
® Net Promoter, Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Satmetrix Systems, Inc., and Fred Reichheld