SightMill
July 2018
Here’s the biggest mistake that business owners and customer service managers make in the context of NPS scores: they focus too much on the absolute scores, and fail to look at the bigger picture. Here’s what you need to keep in mind - without taking the breakdown of your responses into consideration, and looking at the percentage of your customers who are detractors, passives and promoters, you have no way of truly understanding your customer’s sentiment.
Here’s an example: if company A has 40 detractors, 20 passives and 40 promoters, they would have an NPS score of 0. Say company B has 0 detractors, 100 passives, and 0 promoters. They would also have the same NPS score of 0. While both companies have the exact same score, it’s obvious that they’re dealing with different issues when it comes to customer service. Bearing this in mind, these companies will have to employ different strategies in order to improve their operations and customer satisfaction.
The difference between promoters and detractors
Now, let’s take a look at how your detractors and promoters interact with your company. According to research, promoters are...
- Five times as likely to repurchase from companies
- Seven times as likely to forgive companies
- Nine times as likely to try new offerings from companies
As compared to detractors. On top of that, internet service providers and insurance carriers have the largest gaps between their promoters' and detractors’ likelihood to purchase. The way forward is clear: to increase your Customer Lifetime Value (CLV) and company revenue, you’ll need to maximize your number of promoters, and minimize your number of detractors.
Looking at the same example discussed above, company A’s strategy might be something along the lines of:
- Address detractors’ problems and perform service recovery
- Identify patterns among promoters to figure out what the company is doing right
- Replicate the same strategy to convert more passives into promoters
- Implement a brand advocate program and get promoters on board
Company B, on the other hand, would probably adopt a different strategy:
- Walk through customer journey and identify all touchpoints
- Brainstorm strategies to increase customer delight in each touchpoint
- Train sales and support reps in providing warm and personalized service
- Incentivize sales and support reps who receive good reviews or compliments from customers
Having a neutral or positive NPS score does not suffice
If you’ve got a neutral or positive NPS score (say, 0 or +10), you might be tempted to keep things running as they are. But if your customers are extremely polarized, and they either love or hate your brand (like what we see with Company A), then you should be reaching out to your detractors and taking in their feedback - even if you have more than enough promoters to make up for your detractors.
Why do we say so? First, statistics show that an average business only hears from 4% of its dissatisfied customers, with the other 96% of dissatisfied customers choosing to leave without writing in to complain. Here’s what this means: the detractors whose responses are captured by your NPS tool are just the tip of the iceberg. For every 50 detractors that you’ve identified, you actually have a whopping 1,200 detractors who are churning quietly, without you even knowing.
On top of that, we also know that 50% of your NPS detractors are likely to churn within 90 days. Given that it’s 5 to 25 times more expensive to acquire a new customer than retain an existing one, you’ll want to get in there and perform service recovery. Don’t let your customers slip through your fingers!
A final word on understanding your NPS score
The moral of the story? Instead of just keeping an eye on your absolute NPS score, you should also monitor the breakdown of your promoters, passives, detractors, and make sure that you’re resolving your detractor’s problems, and converting as many of your customers into promoters as possible. Regardless of whether your end goal is to expand to a new market or to grow your revenue, having more promoters can help you get there more quickly!
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