This week one of our Hubspot customers provided us with a review of our services. Aside from feeling particularly humbled by this client feedback, it led us to wonder how many companies invite feedback regularly from customers and how many invite customer feedback proactively?
"We have been working with Nick and his team for nearly a year now, the service we receive is attentive and personal, Nick really understands our business, the advice he gives is targeted and works. We would not hesitate to recommend Nick Spalding Ltd to anyone wanting to get a real grip of their marketing and drive their business forward"
Ian Graham, Managing Director, Perfect Octave
According to a recent survey, Global Trust in Advertising, a whopping 83% of respondents said they trust recommendations from family and friends much more than they trust advertising.
This statistic seemingly makes it more important to ensure customers are happy with your products or services. After all, customers are much more likely (3x) to tell a friend or colleague about a bad experience rather than all of the good experiences they receive.
Which adds further to why businesses need to collect customer feedback.
Customer feedback allows companies to promote good feedback and work to understand the detractors.
Domino's Pizza, currently growing faster globally than most tech firms, despite receiving some of the worst customer feedback in 2010 embarked on a campaign of researching why, analysing feedback from customers and calling itself out for having lacklustre product in a historical advertising campaign 'Oh Yes We Did'.
Domino's aimed to understand why they were performing so badly and undertook massive internal reviews to improve service and products to customers. Net result has been a massive increase in growth, sales jumped from $3.1 billion to $5.9 billion (2017).
A big factor in this example was understanding feedback from customers, changing the products and services and then asking for customer feedback again, and again, and again, until they felt they had the products and services right.
So how can your business do this?
Net Promoter Score (NPS)
Net promoter score is a customer satisfaction benchmark that measures how likely customers are to recommend you.
It is different from other benchmarks in that it measures customers' overall sentiment, versus their perception of a singular interaction or purchase.
How to calculate NPS
- Survey your customers, asking them 'On a scale of 0-10, how likely are they to recommend you to a friend (or colleague)'.
- Categorise respondents i.e. 0-6 = Detractors, 7-8 = Passive, 9-10 = Promoters
- Disregard the passives for the moment, subtract the percentage of detractor responses from the percentage of promoter responses to determine your Net Promoter Score. Scores should range -100 to 100.
Why is NPS Important?
Customer NPS helps brand evaluate customer loyalty and changes in NPS gives companies a good indicator of the current state of customer satisfaction.
Ways to Improve
Low scores allow companies, as much as it may hurt initially, to zero in on where improvements can be made to products or services, particularly if the NPS survey has allowed customers to provide comments about why they gave the score they did. focusing in on detractors can lead to them later be converted to promoters, if you are able to improve your product or service and show your detractors how their feedback has contributed to the improvements.
Referral Marketing
High NPS scores provide indications of happy customers most willing to promote your company, and we all know positive referrals carry a lot of weight.
- More than 80% of happy customers are willing to provide recommendations
- 70% of respondents are more likely to purchase a product if an industry colleague or friend talked about it on social media or email
- Referred customers have a 16% higher lifetime value (and better ROI) than others
Companies can harness the power of referral marketing by asking for customer cases studies, testimonials and online reviews to tempt potential new customers and could consider running customer loyalty schemes and brand ambassador programmes, but only if they have happy customers first.
Net promoter, Net promoter System, Net Promoter Score, NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.
