Adam Dorrell on How to Monetize the Net Promoter Score
How do you use the Net Promoter Score® to retain your customers? How can you make money by understanding the numbers behind this survey? How can you sell the C-Suite on the benefits of investing in Customer Retention?
Shep Hyken interviews Adam Dorrell, the CEO and co-founder of CustomerGauge.
Shep Hyken’s opening comments focus on the Net Promoter Score®, which is the result of a survey question that asks a customer “How likely would you be to recommend us?” Shep feels that NPS is one of the simplest, yet most powerful feedback measurement tools. However, according to the annual Net Promoter Score® benchmark survey from 2016, it was found that 90 percent of the companies were not clear if, after implementing their Net Promoter Score® program, whether they had increased customer retention. The score is nice to know, but what does it mean to your business?
Shep begins his interview with Adam Dorrell by discussing the Net Promoter Score® Benchmarks, The Annual Survey, which discusses the latest in the Net Promoter® industry, best practices, and recently added company scores.
CRM software tools have been around for about 30 years, but these tools are about the acquisition of a customer, not so much about the maintenance or retention of a customer.
Adam said that about 40 percent of survey respondents were not sure how much business they retain each year.
The average retention number for companies is about 80 percent, so the average American business loses 20 percent of their customers every year.
- A repeat customer will do more business with you than a new customer. Repeat customers spend more.
- The CEO and leadership team must buy in to the power of the NPS measurement and approve a budget for customer experience and retention. Success must be measured with proper KPI’s.
- Customer feedback should be responded to in a timely matter. Too often companies push the survey out once a year and then take three months to process the feedback. By then it’s too late to properly respond to the customer.
- Low scores require attention in a timely manner. Dorrell recommends focusing on detractors first, typically within 48 hours. Find out why the customer scored the company low and what the company can do to retain the customer. Beyond trying to “save” the customer, use the feedback to eliminate the same issues from happening to other customers.
- High scores are also worth responding to. Find out the “why” behind the score. Your promoters are gold and will share information that can help create an even better customer experience.
Adam Dorrell started CustomerGauge in 2008 to help companies solve the problem of retaining customers. Compatible with the Net Promoter Score®, CustomerGauge allows organizations to improve customer relationships and encourage loyalty, most immediately in e-commerce functions.
“Some companies (we call them NPS Leaders) are doing things right. Not only do they measure, but they also act on customer feedback in a timely manner, and grow by using referrals and social reviews.” – Adam Dorrell
This episode of Amazing Business Radio with Shep Hyken answers the following questions … and more:
- How can you retain more customers and get more referrals?
- Why should I use NPS to measure customer satisfaction?
- How can I determine the ROI for customer experience and customer retention programs?
- Why don’t more companies measure customer satisfaction?
- How can we monetize Net Promoter Score?
- Should I focus on my detractors or my promoters first?