How to Retain Customers and Increase Revenue with NPS Surveys
NPS stands for Net Promoter Score and is the industry-wide standard metric to track customer loyalty. NPS can impact your valuation and it’s a good indicator of how your customers view and value your service. It measures the relationship between your company and your customers objectively.
One of the key benefits of NPS is that it is very user friendly. (Check out: What is a Net Promoter Score and How Can it Improve Revenue for more information.)
You will be able to easily interpret the results yourself, even if you have little or no experience in dealing with metrics. The base question of all Net Promoter surveys is whether or not customers are willing to recommend your business to their friends and family. The rest of the survey usually consists of follow-up questions that seek to find out why anyone would or would not recommend your business. The survey is easy to administer through email. It is a short, two-question survey that tells you how good your customers think your business is (question #1) and why (question #2).
The system asks your customers to rate the satisfaction with your business on a scale from zero to 10 and puts them in the corresponding categories according to their response. The NPS survey breaks down respondents into three categories, which includes Promoters, Detractors, and Passives. These categories make measuring customer loyalty an easy task and also help identify disloyal customers:
- 9-10 are Promoters. These people are thrilled with your business and they are promoting it through word-of-mouth.
- 7-8 are Passives. These people are satisfied with your business but aren’t loyal to it.
- 0-6 are Detractors. These people are most likely to churn from your business.
The NPS score can range anywhere from -100 to +100.
It’s calculated by subtracting the number of Promoters (those that rate 9-10) with the number of Detractors (those that rate 0-6).
The NPS isn’t just a number. It’s directly correlated with revenue.
Research done by Bain & Company found out that the NPS score accounts for anywhere between 10 and 70 percent of revenue growth among direct competitors.
Another benefit of NPS is the fact that you can discover trends in your customer base. There are two important things to do when it comes to NPS surveys and that is to reduce the number of Detractors and to increase the number of Promoters.
And here is how Crewhu can help you with that.
Reduce the number of Detractors by using Crewhu’s platform
In today’s market and the aftermath of the pandemic, you want to minimize the churn rate of your customers as much as possible and Detractors are the prime suspects for that. (Check out this article to get help on how to build NPS surveys in Crewhu.)
It costs five times as much to attract new customers than it is to retain an existing one. Fifty-one percent of B2B customers will avoid your service for up to two years if they received poor service. Eighty-nine percent of consumers begin doing business with a competitor following a poor customer experience.
And the final statistic is the scariest one. Only one out of 26 unhappy customers complain—the rest churn.
NPS acts as an indicator of long-term customer happiness and great service experiences and Detractors don’t get any of the two. It would be wise not to ignore this group since they can actively damage your brand.
Using Crewhu’s platform, you can automate the NPS survey and send it to your customers to receive the survey response. But what comes after the survey is completed is what matters.
Forty-nine percent of consumers say that feeling unappreciated is their number one reason for switching to a different solution. So you need to have a closed-loop system in place that helps you take the data from the NPS survey and use it to improve your processes and services as an MSP.
We at Crewhu use a closed-loop feedback system where we actively gather data from surveys, get insights from it, and then improve our service accordingly.
But it’s not just about working on Detractors, you need to work on keeping your happy customers (Promoters) happy.
Keep your Promoters happy with Crewhu
The success rate of selling to an existing customer is between 60 - 70 percent, while for a new customer, it’s around 5 percent. And highly engaged customers buy 90% more frequently, spend 60 percent more per transaction, and have three times the annual value compared to other customers.
As you can see, it pays to retain the happy customers happy and NPS is a great way to make that happen.
The two questions in the NPS can tell you not only that people are satisfied with your business and are recommending it to a friend, but it also tells you why they are satisfied.
The second question in the NPS survey (“Why?”) gives you insight into why they are so satisfied with your service. This is something you should include as much as possible in every one of your customer interactions.
Your Promoters are telling you what they like and why they like it. So if you want to keep them happy, you should continue doing the things that make them feel like that.
But you also need to innovate on behalf of your customers because, as Henry Ford said, “If I asked people what they wanted, they would say faster horses, not cars.”
Are you ready to get started with NPS? The first step toward increasing custmer loyalty and revenue is to download the FREE NPS Framework and Starter Kit we created exclusively for MSPs. And why don’t you try out Crewhu for FREE!