Getting feedback from customers is a critical part of our business. Knowing what the customer wants and does not want can guide us in developing the right products and services that meet their needs and expectations. When clients recognize that we value their feedback, it helps us build loyalty and stronger customer relationships, which in turn leads to repeat business and solid growth.
In an effort to improve our products and services for our customers, and to build better relationships with them, we’ve started a Customer Experience (CX) program through our Perfect Execution initiative.
Measuring Customer Experience With The Net Promoter Score
To improve customer loyalty, we first need to be able to measure it. From there, we can determine where to focus our efforts on improving it.
According to research done by Fred Reichheld of Bain and Company, the best measure of customer loyalty is by using an index tied to a single question based on willingness to refer. The following is a good example:
"On a scale of 0-10, what is the likelihood you would recommend a friend or colleague to our company (product or service as appropriate)?"
To measure success, we will be using a metric called the Net Promoter Score, or NPS®. It is based on the fundamental perspective that every company’s customers can be divided into three categories: Promoters, Passives, and Detractors.
Those who gave a rating of 9 or 10 are called Promoters —loyal enthusiasts who will keep buying while referring others, thus fueling growth. The Detractors (0 to 6 scores) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth. Meanwhile, those who answered 7 or 8 are the "passives", which are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. To calculate your company’s NPS, take the percentage of customers who are Promoters and subtract the percentage who are Detractors.
It's important to remember that it’s not just about the score, but about how we use it. We want to engage the detractors, move the passives to the positive territory and get the promoters to bring their friends along.
CX Process Flow
Once a transaction has been completed, the project manager (PM) determines the customers that would be surveyed before initiating the release of the questionnaire. These include any customers that we do business with. It can be a distributor, an application engineer, a purchasing agent or an equipment operator. When the survey is completed, the data is automatically entered into the tracking software, which generates a (corresponding) report. The executive dashboard is updated with NPS.