Brand advocacy part 3: Don’t forget the poor relation
In this article in our series about Brand Advocacy we’re taking a more detailed look at a popular technique used to gauge the loyalty of a company’s customer relationships – the Net Promoter Score.
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Brand Advocacy Part 1: Showaddywaddy were wrong!
Brand advocacy Part 2: Creating your biggest fans.
The Net Promoter Score
Measurement of customer satisfaction, or otherwise, is often the poor relation when it comes to achieving brand advocacy. However, you need to measure everything from complaints, churn, satisfaction and retention rates. Integrating these metrics into your Quality Management System will ensure you have the processes in place to handle this and will help no end.
The pie-chart below shows there are a number of ways to measure customer retention.
A popular measurement technique is the Net Promoter Score or NPS for short. It’s a metric that can be used to gauge the loyalty of a company’s customer relationships and was developed by Fred Reichheld, Bain & Company and Satmetrix.
It works like this.
On a scale of 1-10, you ask your customers to respond to the question: How likely is it that you would recommend [Company x] to a friend or colleague?
Their answers get them placed into one of three categories:
1) Promoters – those who give a response of 9-10. These are loyal fans.
2) Passives – those who give a response of 7-8. They are satisfied – for now!
3) Detractors – those who give a response of 0-6. These are your unhappy customers.
The diagram below is from Bain & Company and shows this in a more graphical format.
While there are some critics of NPS, the real benefit is that the results produce a clear measure of a company’s performance through the eyes of its customers. The results enable businesses to understand the position that each and every customer is in when it comes to customer loyalty.
It enables businesses to review their operations and take positive actions with regards to enhancing their systems and communications with their customers and to innovate to generate more promoters.
Further information about NPS is available on here on the Bain & Company website.