Customer feedback is crucial to improving a business. Your customer service representatives could be doing many things that keep customers from returning. Until you ask your customers, there is no way you can know.
Customer Experience Management (CEM) is an all-inclusive system that collects feedback from customers, converts it into plans for improvement, and disperses these insights to every relevant department within a company. As with any comprehensive program, it needs an simple initial metric that tells decision makers, in a general way, whether overall trends are positive or negative.
Net Promoter Score (NPS) is a scale that measures how customers view your business. It starts with a very basic question: “On a scale of 0 to 10, how likely are you to recommend this business to a friend or colleague?”
The responses are then broken into three categories: Detractors, Passives, and Promoters. Detractors gave a score from 0 to 6. Studies have shown that people in this range are likely to tell people to avoid the business in question. Passives answered 7 or 8. These customers are unlikely to sway others one way or another. Promoters gave a score of 9 or 10. Such customers tend to be evangelists who will spread the word about their good experiences.
The Net Promoter Score is determined by subtracting the percentage of Detractors from the percentage of Promoters. The NPS can thus range from -100 to 100. In 2003, the average business was calculated to land at a score of 16. If your business lands in negative territory, you know you definitely need to dig deeper into customer responses to find problems with your customer service.
Even if a company’s score lands solidly in positive territory, there could be areas in need of improvement. The score is not meant to provide a comprehensive diagnosis; think of it like taking a company’s temperature. It is a thumbnail metric that everyone within an organization should watch closely as a matter of habit. Despite its simplicity, it can be vital to a company’s success. According to Bain and Co., inventors of the Net Promoter Score, it can account for 20-60% of a company’s organic growth.
Every company needs customer feedback. Even successful organizations may find their success short-lived if their customers are unhappy and then tell others to stay away. The first, and perhaps most vital, step in assessing customer experience is in finding out whether customers are likely to recommend the company to others. Armed with that basic information, companies can begin the process of making major improvements.