Net Promoter System: The way to customer loyalty

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Net Promoter System: The way to customer loyalty Data Mapping
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You must be more familiar with the term Net Promoter Score; if not, no worries, we will cover that too. 

A Net Promoter Score is a methodology used in gauging customer satisfaction and loyalty to your brand. The customers are asked a simple question “How likely are you to recommend our services to others (friends and family), on a scale of 1 to 10?” Based on the score each respondent gives, they are sorted into three categories promoters, passives, and detractors. 

However, simply gathering Net Promoter Scores does not guarantee an improvement in customer loyalty. That’s where Net Promoter System comes in. 

Putting customers at the heart of business & at the center of every decision requires a customer-centric effort. Companies that excel in a customer-centric approach and earn the highest score for customer loyalty use the Net Promoter System. 

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What is a Net Promoter System?

If we quote Fried Reichheld, the inventor of the Net Promoter Score, 

“Net Promoter System is the way of running a business.”

It is a business/ management philosophy embedded at every layer of the business to earn the loyalty of the employees and the customers. 

Taking advantage of the Net Promoter Score to measure customer satisfaction and loyalty helps you pool the insights and knowledge discovered. When these insights are put to practice, they take the form of a Net Promoter System. 

A Net Promoter System thus essentially touches every inch of the business – marketing, IT, product design, customer support, HR, and more – and the organization – CEO, executives, and frontline employees. 

What is the importance of the Net Promoter System?

Net Promoter System: The way to customer loyalty Data Mapping

Suppose you want your customers and employees to stay longer and recommend your company to others. In that case, every employee in your company needs to focus on earning their loyalty by building better services and developing better relationships. 

A well-thought Net Promoter System enables a company to focus their effort on earning the loyalty of their customers and employees. 

Loyal customers are made for a lifetime. They are likely to spend more on the company, thus contributing to revenue. Moreover, loyal customers are also the advocates who praise your brand and its offerings to their acquaintances. 

Loyal employees enjoy working with the company, so they stay for a longer time. A loyal customer means you save the cost of acquiring and training a new employee. Moreover, delighted customers spread their positivity in the work environment resulting in increased productivity. 

Gaining loyalty amongst customers and employees means sustainable and profitable growth. You need to put effort and do the right thing for your employees and customers. 

Net Promoter System requires the company to revamp its engagement with customers from within the business. Unlike other loyalty strategies that focus on short-term profit, the Net Promoter System looks far ahead in the future. 

Net Promoter System is a customer loyalty and experience system that enhances the company’s capabilities and aligns with goals to improve customer and employee satisfaction every day. 

Exploratory Research Guide

Conducting exploratory research seems tricky but an effective guide can help.

How can you develop your Net Promoter System?

Net Promoter System: The way to customer loyalty Data Mapping

Net Promoter System involves understanding the reason behind the Net Promoter Score and working your way to resolve the reasons and improve the overall customer experience and business growth. 

Start with the question: 

On a scale of 0 – 10 (0 being the lowest and 10 being the highest), how likely are you to recommend our company (products or services) to your family or friends?

Don’t limit the question to the score, but dig deep into gathering customer opinion on

  • Why did you give us this score?
  • How can we improve your experience?

Following the responses, segment the respondents into the three Net Promoter Score categories, promoters (9 to 10), passives (7 to 8), and detractors (0 to 6). These customer responses will help accomplish the first step of measuring your Net Promoter Score. 

Net Promoter System: The way to customer loyalty Data Mapping

You can analyze the Net Promoter Score by the industry, geography, customer segment, channel, or any other factor. You can also track it weekly or monthly, depending on your business’s domain, to see the efficacy of your loyalty-building efforts. 

Closing the feedback loop & keeping it short: 

Solely depending on the collected scores cannot help improve CX. These questions hold more insights than the scores themselves. 

Exploring the reasons behind the Net Promoter Score can help you understand what you are doing right and wrong. And so, these questions contribute to your Net Promoter System. 

Closing the feedback loop involves sharing the customer feedback with the relevant employees responsible for customer experience. The relevant team not only counts for the CX team, but it may also be the product design team, IT, sales, pricing executive, or any other team that contributes to designing customer experience. 

To close the loop, you need to take effective action and communicate those actions with your customers. 

You can contact the customers to discuss how you can improve their journey or investigate deeper individual problems. You can also identify which actions are driving customers into becoming promoters. This can help you develop your CX strategies on proven actions. 

Delighted employees help delight the customers: 

Your employees are your key to delivering an exceptional customer experience. They are also a key part of making your company truly customer-centric. 

To embed a customer-centric culture, you need to make sure all your employees throughout the organization are actively onboarding. 

Motivated employees put more effort into raising productivity voluntarily. They are likely to be enthusiastic about creating memorable experiences for the company’s customers. Moreover, when employees know that their work creates positive outcomes in customer experience, they will work towards enhancing the outcome.  

Experiencing the satisfaction of earning customer loyalty employees will bring energy and creativity to the workplace. 

When is the time for you to measure NPS?

NPS surveys ask a simple question to measure customer loyalty. However, that simple question answers how satisfied the customers are with your brand or its products/services. So, it is better to measure the Net promoter Score right after a customer interaction when the experience is still fresh. This will help you gain more sincere insights from the customers. 

Based on when you distribute your NPS surveys, they can be categorized into Transactional NPS surveys & Relationship NPS surveys. 

Transactional NPS surveys: 

These surveys are deployed immediately after a customer interaction. Transactional NPS surveys can enable you to generate customer feedback at a particular touchpoint. 

These NPS surveys determine customer satisfaction regarding an event, product quality, sales interaction, customer service, etc. The question is designed to measure customer loyalty for a specific event or touchpoint. 

Relationship NPS survey: 

Relationship NPS surveys are sent at a regular interval – once every quarter or half-yearly. This category of NPS survey helps you identify customers’ satisfaction with your brand. 

The relationship NPS survey is designed to analyze customer engagement, relationships, and the overall loyalty they have with your brand. 

What are the essential components of the Net promoter System?

An NPS survey question is simple, which creates a misconception that it is all about the score. The leading company of the Net Promoter System understands that the simple question is the first stage of creating an entire system dedicated to improving the customer experience. 

The simple question is a catalyst that helps you learn how and when to dig deeper into customer insights. 

Strong leadership across the organization: 

 Leaders who talk about improving customer experience must also take actions that support their mission. They should make it a priority to earn the loyalty of their customers and employees, rather than only focusing on monetary value. 

Leaders can effectively build a customer-centric culture by demonstrating their commitment to earning employee and customer loyalty. They can exhibit that the customers and employees are the top priority. 

To establish a Net Promoter System across the organization, talented leaders must be appointed to lead important initiatives. The leaders should work to facilitate collaboration and cooperation among departments. 

To create more promoters, leaders across the company should commit to embedding customer centricity in the business process. 

NPS is your trusted metric: 

Focusing on customer-centricity is challenging to achieve if you don’t have a single most reliable metric to measure loyalty. 

NPS enables you to establish a common metric that allows your employees to understand what inspires customer loyalty and how you can earn it. Leading companies use the Net Promoter Score to measure customer loyalty across every touchpoint and interaction. 

With NPS as your common metric, you can learn where you stand in the industry and how your actions impact experience over time.

Customer and employee Net Promoter Score can help you understand the lifetime value of the different segments – promoters, passives, and detractors. This understanding can help analyze the investment value for every segment and its return in improving employee and customer experience. 

Thorough feedback loop for experience improvement: 

The full potential of a Net Promoter System can only be realized when it addresses pain points directly and leads to a positive outcome. 

As Bain & Company defines, the Net Promoter System has three phases: The Inner Loop, the Huddle, and the Outer Loop. 

Inner loop: This phase involves sharing real-time customer feedback with frontline employees and relevant teams. The insights allow them to improve their strategies to excel in customer experience. The feedback helps them learn and correct their efforts and actions. 

Frontline employees or managers can contact the unhappy customers to probe further their experience of how the company can serve better.

Huddle: This phase consists of an interactive working session. These sessions allow teams to collaborate and brainstorm ideas to address customer issues. The team working session connects the inner and outer loop and reinforces the company’s commitment to earning customer loyalty. 

Outer loop: The outer loop helps make decisions that frontline employees cannot make by themselves. After the huddle session, the company uses the insights to conduct a root-cause analysis of customer pain points. 

Net Promoter System: The way to customer loyalty Data Mapping

Conclusion

The Net Promoter System is a complicated process that requires revamping of company culture. The system defines the company’s customer-centricity and economic values. The approach helps you gain a competitive advantage while allowing you to focus on earning customer loyalty.

FAQ

NPS is a market research metric used by companies to measure the loyalty and satisfaction of their customers. The metric was developed by Fred Reichheld in the year 2003 and it has since been used to gauge a customer’s willingness to recommend a company’s product/ service to friends and family. 

There are four types of NPS used by organizations for different objectives- 

  • Relational NPS
  • Transactional NPS
  • Employee NPS
  • Benchmarking NPS

To calculate the obtained NPS score you can use the following formulas

%of Promoters – % of Detractor = NPS

ENPS offers companies a way to measure how satisfied the employees are with the company. It measures the propensity of recommending the company as a suitable working place or under a superior.

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