In short no. I recently got given a book to read (thanks LB), "If Disney Ran Your Hospital," (by Fred Lee) where customer loyalty is described as ‘the emotional bond fostering trust and a desire to return for future healthcare needs. On the other hand, customer satisfaction refers to the patients' contentment with their immediate healthcare experience at the hospital, without necessarily guaranteeing their long-term commitment or advocacy’. Satisfied customers are not necessarily loyal.
So it got me thinking, how do we want our customers/clients to think about us? In the competitive landscape of modern businesses, customer loyalty plays a pivotal role in sustaining success. Building a base of loyal customers can lead to increased revenue, brand advocacy, and long-term business growth.
To gauge the loyalty of your customers and understand their sentiments, one powerful tool at your disposal is the Net Promoter Score (NPS). In this blog, we’ll look at the significance of seeking customer feedback, the goals you can achieve through NPS, and how to effectively implement it in your business strategy.
Customer feedback serves as a compass guiding your business towards success. Gaining insights into what your customers think about your products, services, or overall brand experience allows you to identify areas for improvement and capitalise on your strengths. Not only does this enhance customer satisfaction, but it also cultivates loyalty, leading to repeat business and referrals.
Seeking feedback demonstrates to your customers that you value their opinions, fostering a strong sense of connection and trust between your brand and its customers. This invaluable relationship builds the foundation for a loyal customer base that stands by your brand through thick and thin.
Now I try and get feedback on a regular basis (Survey Monkey is my tool of choice), but it's normally after a workshop, board meeting, or tranche of work, and is specific to an activity.
Sounds good right? Well not really. The last time I did a full survey and went to the folks I work with to get feedback was – wait for it – 2017! I can’t believe it. And there was 32 questions!
So just before this was published, I have gone out to the folks I have worked with over the last 12 months via Survey Monkey and asked two questions:
The results won’t be in for a couple of weeks, but I’m following the NPS methodology below and I’ll let you know how it goes! Warts and all.
Measure to improve, not impress: When implementing customer feedback strategies, it is essential to have clear objectives in mind. In the book, Lee says "Measure to improve, not impress" which emphasises focusing on gathering feedback and data to make meaningful improvements in service and patient care, rather than merely showcasing metrics to create an illusion of excellence.
Constructive feedback from your customers highlights areas of your business that need improvement. This insight enables you to take targeted actions, refining your products, services, and customer interactions to enhance overall satisfaction. Just don’t leave it for six years!
Understanding your customers' loyalty level is paramount to your success. With NPS, you can quantify and track customer loyalty over time, allowing you to identify trends and make informed decisions based on the data.
My 32 questions gave me some insights, but really, I could have asked my two questions above and pretty much got the same answer.
Satisfied customers are more likely to stay with your brand and become loyal advocates. Regularly seeking feedback allows you to address issues before they escalate, reducing churn rates and increasing customer retention.
Loyal customers who are promoters of your brand are enthusiastic about recommending your business to their network. Positive word-of-mouth can significantly impact your brand's reputation and attract new customers organically.
These customers are loyal enthusiasts who actively promote your brand to others. They contribute to your business's growth and success by word-of-mouth recommendations.
Passives are satisfied customers, but they are less likely to recommend your brand compared to promoters. They may be easily swayed by competitors and do not actively advocate for your business.
Detractors are dissatisfied customers who might speak negatively about your brand and deter potential customers. Addressing their concerns and turning them into promoters should be a priority.
Reach out to your customers through surveys or emails and ask the question, "On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?"
Group respondents into three categories based on their scores. Scores of 9 or 10 represent promoters, scores of 7 or 8 are passives, and scores of 0 to 6 indicate detractors.
Subtract the percentage of detractors from the percentage of promoters to obtain your NPS score. The formula is: NPS = % Promoters - % Detractors.
Let's say you received responses from 500 customers. Of these, 250 were promoters (50%), 150 were passives (30%), and 100 were detractors (20%).
Indicates that you have more promoters than detractors, reflecting a positive customer sentiment and a good foundation for growth.
Suggests that you have a healthy proportion of promoters, but there's room for improvement in converting passives into promoters.
Signifies an outstanding level of customer loyalty, with a significant majority of customers being promoters.
Understanding customer loyalty is critical for any business that aims for long-term success. Seeking customer feedback through the Net Promoter Score (NPS) system provides a comprehensive and actionable way to gauge loyalty, measure customer satisfaction, and refine business strategies.
By proactively collecting and analysing feedback, you can identify areas for improvement, increase customer retention, and harness the power of word-of-mouth marketing. The NPS score provides a quantifiable metric that can guide decision-making and ensure the continual improvement of customer experiences.
Investing in customer loyalty through NPS not only fosters a dedicated customer base but also builds a robust and sustainable foundation for future growth. So, embrace the power of NPS and create a customer-centric culture that propels your business towards unrivaled success.
So I encourage you, seek feedback, understand if you’re creating loyalty, because if you don’t ask you won’t know. And don’t leave it just for every six years!
