Most people measure loyalty by how many clients leave. But it’s unfortunate to be measuring loyalty once it’s too late to keep a client.
Luckily, loyalty can actually be measured in advance; and as Management Guru Peter Drucker says, “If it can be measured, it can be managed”.
At Step Change, we use the Active Net Promoter Score (NPS) to measure client loyalty. This powerful indicator of future growth provides a clear measurement of client satisfaction over time, drives innovation and potentially performance management, creates a simple and easily actionable system at an individual customer level, and supercharges testimonials, referrals, and innovation opportunities. Just as important, it provides the opportunity for you to address and fix issues for dissatisfied clients.
The Active NPS lets you track customer satisfaction by asking one simple question:
“How likely is it that you would recommend us to a friend or colleague?”
How It Works
The NPS is expressed as a number between -100 and +100. One of the best scores in the marketplace is Apple, which has an NPS of 76. On the other hand, just about ever player in the financial services has a negative net promoter score.
Here’s how it works.
A survey respondent indicates how likely they are to refer someone, with a rating between 0–10, 10 being the most likely. If for example 35% of respondents are Promoters, 25% are Passives and 40% Detractors, the NPS is -5. An NPS that is positive is good, with an NPS of +50 being excellent.
You can track the results with the following groupings to get a clear measure of the business’s performance through customers’ eyes. Customers respond on a 0- to 10-point rating scale and are categorised as follows:
- Promoters (score 9–10)
These are loyal enthusiasts who will keep buying your product or service and refer others, fuelling growth. Those that give you a 10 will refer three times as many people as a nine would.
What you should do: Request for testimonials. Get these testimonials up on your website or on Google My Business. You may want to use software, like Bravo, to capture video testimonials. The benefit of getting a testimonial is that it cements that person’s loyalty.
- Passives (score 7–8)
These are satisfied customers but not thrilled enough to recommend you to their network. They are likely to continue buying your product until they come across a supplier with a competitive value proposition.
What you should do: Engage them by asking for feedback and ideas on how to get a 10 from them in the future. You can use a crowdsourcing innovation platform, IdeaScale, where customers can suggest ideas that they would like your business to implement. Users can then vote on the ideas by promoting or demoting until they reach a critical response level, which you set. You don’t need to overcommit yourself by promising to respond to every post or to activate every idea.
- Detractors (score 0–6)
These are unhappy customers who can damage your brand and impede growth through negative word of mouth. People are wired to remember painful moments; this explains why when people had a terrible experience with your product or service, they are going to talk about your business almost 10x as much as a promoter.
What you should do: Call immediately and resolve the issue that’s bothering them.
It’s not enough to just measure customer loyalty. We need to attend to it. One of the two biggest mistakes concerning the Net Promoter Score is that businesses do it quarterly or annually. This just doesn’t work. If you sent your survey today to a customer who purchased a product six months ago, you are just wasting your time. People forget quickly. So when you send out the NPS survey, make sure it’s in proximity to the actual purchase or peak intensity of the experience. For Step Change, we give out the Active NPS survey after we conduct our Intensive (or workshop), but before the end of the project — that will give us some time to address and fix issues.
Second, don’t just measure it; act on it. The only worse thing than giving people a poor experience is asking for their feedback and then doing nothing about it. Only ask for their feedback if you are prepared to do something about it.