On a scale of 1 to 10, how likely is it that you would recommend a product or service to a friend or colleague?
This deceptively simple question is the core of a Net Promoter Score (NPS), a measuring system that allows companies to better understand customer loyalty and brand happiness without employing traditionally complex surveys about a specific product or service.
During a recent lunch with one of our long-time clients, Independence Blue Cross, I started talking to Brian Lobley, President of Commercial and Consumer Markets about his focus on his members, and he said something that resonated with me – NPS is the new EPS, Earnings Per Share.
Specifically, NPS and a customer’s obsession with a brand is at the core of a company’s success to attract, engage, and retain customers. If brands continue to prioritize and focus on the customer experience and engage them in valuable exchanges, they will obtain a higher NPS, which leads to greater profitability for the company and higher EPS. EPS is a derivative of NPS, not the other way around.
Even if businesses understand the need to provide a seamless experience and value with every engagement opportunity, C-suite level executives and key decision-makers are often driven by quarter-by-quarter financial outcomes. Despite their very best intentions, companies are often swayed by the promise of short-term profits and growth, instead of building promoters. We need to turn this business thinking on its head. Consider the fact that customer engagement drives business value throughout all departments and positive financial results will follow.
According to Maxie Schmidt-Subramanian in a recent Forrester survey for customer experience professionals, “NPS is not, however, a direct measure of customer experience quality – it’s one step removed.” Essentially, your brand’s NPS score determines how strong your relationship is with customers.
NPS will tell you where you stand. It won’t give you insights into the engagement platforms and experiences your customers will find valuable. First, you must understand what your customer values in the context they are engaging with your product or service. For instance; if you just had an accident and you open your insurer’s mobile app it shouldn’t show you comparative quotes. That isn’t what you need in that moment.
According to recent industry studies, it can cost 500% more to acquire new customers than it does to keep current ones. If you take into consideration the enormous marketing, advertising, and promotion costs needed to add new consumers – especially in a mature industry – it makes tremendous financial sense to improve customer satisfaction and, therefore, NPS.
So how do brands with an incredible following of loyalists, like Amazon, Apple, Southwest Airlines, and Subaru, keep customers satisfied while generating profits? Their approach is simple – treat customers the way you would like to be treated – and offer desired products and services, inclusive rewards programs, and accessible customer service. You must be transparent with customers to earn their trust and loyalty and add value at every interaction.
In return, promoters, who are delighted with their experience, are willing to come back for more and recommend your business to friends and colleagues. The ROI received on boosted referrals is unmatched – it’s truly the most economical way to sustain growth, increase profits, and satisfy consumers.
As Lobely explained, Independence Blue Cross is focused on improving member engagement from a bottom-up approach. This requires a mindset shift for how employees think about what they’re doing vs. completing a task because they’ve been asked to do so. If employees can understand that their roles – whether it’s creating new member benefits apps or answering customer service calls – are critically important to the overall goal of improving member engagement, they’ll perform better. Today, talented and ambitious employees want to pursue a bigger goal and purpose that transcends shareholder profits.
At LiquidHub, we value similar ways of thinking. For every Associate – in sales, marketing, technology, design, creative, research, or strategy– we’ve introduced a cultural framework around the company’s purpose, vision, and core values. Associates can relate to a higher reason for being, and we’ve reinforced this way of thinking by better explaining different business functions and putting context around daily work tasks. For example, if we employ a tester who executes hundreds of test scripts a day without understanding the purpose of the test script or who will engage with the platform they are testing, the task can seem mundane. However, once the tester understands that executing these test scripts will deliver value for a person interacting with that platform and how it will add value, he or she will perform the right number of tasks with more efficiency and thoughtfulness.
As a customer engagement service company, we understand the importance of delivering solutions that help companies reimagine their engagement platforms. It’s clear the power of loyalty is transformative. Customers will drive revenue for businesses, and in fact, loyal customers – on average – are worth up to 10 times as much as their first purchase. To attract and retain loyal clients, brands need to personalize customer experiences that resonate with their customers. Insights obtained from customer feedback through knowing where you stand in your customer’s mind by way of the NPS will help companies further align their offerings and investments with their needs, priorities and wants.
Hank Summy is Partner at LiquidHub, and serves as Vertical Markets and Global Sales Leader. Hank can be reached at firstname.lastname@example.org.