The following post is part of a series that will help inform readers of the power that a company’s Net Promoter Score has on its long-term business goals. The previous posts in the series can be accessed via the following links:
- The Top 5 Challenges That Hold Companies Back from Leveraging NPS Data to Develop and Improve Products
- Using Net Promoter Scores to Boost Customer Satisfaction and Loyalty
- The Higher The NPS, The Larger The Market Share
In this series, we’ve addressed the challenges that often inhibit companies from using NPS data to improve their products, how measuring NPS can lead to increased customer satisfaction and loyalty, and how companies with higher NPS typically hold larger market share.
Now, let’s take a look at why benchmarking your company’s Net Promoter Score over time provides significant value to your business.
Benchmarking Your NPS Against Competitors
One of the most important things to consider while in the beginning stages of adopting NPS into your business strategy is how your score compares with others in your industry. Doing so will give you some perspective, as particular industries trend very high in terms of average NPS, while others tend to get lower scores regardless of great strides taken by an individual company.
For example, 2017 research by Satmetrix found that the average NPS for Department/Specialty Stores was 60, while the average NPS for Internet Service was only 2. Therefore, if you’re in the retail space, you wouldn’t want to compare your NPS to that of a company in the internet service industry.
Without a definitive benchmark comparison to the competitors in your field, it can be challenging to see where you stand in your market, and what score indicates that significant action is needed.
After all, you don’t want to lose your customers to competitors that have the potential to provide them with better service than you can. Today, the average consumer is drawn to companies that put customer service first – you want to be one of those companies.
Calculating Your Score Over Time
In order to maintain a thorough and holistic understanding of how your company’s customer satisfaction stacks up against competitors’, NPS should be collected and analyzed consistently over time. It’s the only accurate measure of whether a company’s strategic changes are having an effect on customers’ perception of the brand.
To get truly actionable data that defines what the customers take is on the experience that they’ve received, you should be administering an NPS question throughout the year, and as close to the act of purchase as possible.
Companies that only send out NPS surveys once a year, or even once a quarter, risk missing out on opportunities to wow their customers, or to address concerns in a timely manner.
You might want to consider randomly selecting people to receive your company’s NPS survey on a daily basis, and and then tracking that score constantly. This real-time connection to your customers can drive much of your decision making, and will provide evidence that your decisions are founded on data, not impulse.
How to Act on NPS Feedback
In order to be truly successful at boosting customer satisfaction, you’ll need a full system in place to support your NPS survey administration and data collection.
This means that NPS needs to be a constant topic of conversation across the teams that comprise your business – from customer service, to marketing, sales, business operations, and anyone else that might come in contact with customers.
Fluctuations in your scores need to be carefully examined so that you can identify and address their root causes. What are you doing well? What could you improve on?
At many tech companies for example, NPS results can often be traced back to small hiccups in software performance. These results may help the company identify growing segments of their customer base that want to see certain updates or changes to the software. This is on-the-ground feedback that should be treated as incredibly valuable across your organization, especially the product team.
It’s also critical to keep in mind that monitoring and administering NPS questions is not a “set it and forget it” process. Someone, preferably several to many people, should have their finger on the NPS pulse at all times, and should be prepared to act on both individual responses and emerging trends.
Feedback as a Promise
Customer feedback data definitely shouldn’t go into a giant well that gets closed off and forgotten. By taking the time to complete a satisfaction survey — even if it’s just the one question NPS survey — your customers are placing their trust in you.
These customers have taken the time to provide input on how they interacted with your product or service, and by asking them about it, you are implying that you’re going to do something about their answer.
If you consistently ignore input from your customers, don’t be surprised if they start to abandon you.
The Secret to NPS Success? Time.
Every company, no matter their services or products, relies on a positive reputation to stay afloat and profitable. As such, most businesses looking to gain traction find themselves requesting feedback. They want to know how happy customers are, how much those customers enjoyed their experiences, and, most importantly, how likely these customers are to speak positively to those around them. Not only that, but companies want to know why their customers feel the way they do.
The biggest mistake that businesses can make is to only ask for customer perception once — most often at the point of sale. Instead, to create an accurate picture of customer opinion, smart businesses connect with customers frequently — before, during, and after they have purchased a product or service — depending on the overall objective of capturing the data using NPS.
NPS, like all metrics in business, is what you make of it. If you simply ask questions when the mood strikes, there’s a good chance your data will be insignificant at best, and misleading at worst. If you don’t act on the feedback you’re receiving, then what’s the point of even asking? When you take the time to reach out, build a community, and use customer insight to improve and fine-tune your operations, the effects of NPS can be quite significant.
The key ingredient to success, both in business and in the NPS method, is time. With a regular approach, an effective methodology, and a strong community, your business is poised to receive realistic, relative feedback that is directly actionable. At the end of the day, isn’t that ultimately what we’re all trying to find?