Loyal customers are the backbone of any company, and vital to its long-term growth. They act as a brand’s natural promoters, helping it to win new business and increase profits. Understanding the importance of customer loyalty is one thing; measuring it, however, is quite another.

The net promoter score (NPS) is becoming an increasingly popular tool for measuring loyalty. Used correctly, it can provide you with a good idea of how happy your customers are. Nonetheless, understanding and building strong customer relationships takes more than data capture. To get the most out of NPS data, you need to understand how it fits it into your wider CRM strategy.

Think bigger

NPS is measured using a single question survey that asks customers how likely they are to recommend your brand on a scale of 1 to 10. The results are divided up into ‘promoters’ (9 or 10), ‘passives’ (7 or 8) and ‘detractors’ (0 to 6). The final score is calculated by subtracting the percentage of detractors from the percentage of promoters, and provides invaluable knowledge that can inform your marketing and sales activities.

That said, your NPS can only track customer loyalty at a particular point in time – it can’t on its own give you a full, continuous picture. Other factors at play must be considered, including your customer churn rate and repeat purchase rate, as well as how well customers are engaging with your marketing and sales communications. Additionally, customer sentiment data can be collected from a number of different channels such as phone, email and social media interactions. This data can then be fed into your CRM and analysed for key insights, establishing an ongoing barometer of customer health that responds to shifts in customer circumstances and opinions.

Act on insights

The more you get to know your customers, the easier it is to sell to them. Using your NPS as a baseline, you can build a more detailed CRM picture that outlines your customers’ likes and dislikes, their personalities and priorities. Armed with these actionable insights, you can deliver a highly specific and personal service to each of your customers, and stay ahead of the competition. If a potential problem is looming, you can identify it and deal with it efficiently, preventing a promoter or passive from becoming a detractor. You can also spot opportunities to up- and cross-sell to happy customers, strengthening your relationships as well as increasing profits.

Sophisticated CRM technology that collects and analyses NPS data in collaboration with other important customer relationship data is vital to creating well-informed sales and marketing strategies. Only by fully understanding your customers’ levels of satisfaction can you create targeted action plans for maintaining existing loyalty and winning new business.

 

By Peter Linas, international managing director, Bullhorn

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