05 Feb 5 Ways that a Cloud-Based Telephone System Increases Net Promoter Score (NPS)
While strategic marketing and advertising are effective ways of reaching new customers, nothing is as powerful or profitable as good, ol’ fashioned word-of-mouth referrals. Consider these eye-opening statistics:
- Customers acquired through word-of-mouth referrals have a 37% higher retention rate vs. non-referrals. (Source: Deloitte)
- Customers acquired through word-of-mouth referrals are worth 16% more in profits vs. non-referrals. (Source: Harvard Business Review)
- Customers acquired through word-of-mouth referrals have an 18% lower churn rate vs. non-referrals. (Source: GfK Marketing Intelligence Review)
Clearly, one doesn’t need an MBA to know that increasing word-of-mouth referrals is good — or make that great — for business, and in the big picture and long run often means the difference between thriving and disappearing. And so, that begs the question: how should businesses focus their efforts when it comes to increasing volume, velocity and value of word-of-mouth referrals? That’s where NPS enters the picture.
Net Promoter Score
Net Promoter Score (NPS) is an index used by businesses around the world to quantify customer loyalty.
Here’s how it works: customers are asked to rate on a scale of 0-10 how likely they are to recommend a business’s product/service to a friend or colleague. Customers are then grouped into one of three categories:
- Customers who respond with a score of 0-6 are considered “Detractors” who are unhappy, and unlikely or very unlikely to re-purchase or generate referrals.
- Customers who respond with a score of 7-8 are considered “Passives” who are reasonably happy with their experience, but they are not necessarily loyal.
- Customers who respond with a score of 9-10 are considered “Promoters” who are highly satisfied, and typically willing to serve as enthusiastic brand ambassadors. This means directing friends or colleagues to choose a business, and encouraging strangers to do so as well (e.g. responding to online posts from people who they don’t know).
Again, an MBA isn’t required to conclude that businesses want — and typically need — to minimize the number of Detractors on their customer roster, and maximize the number of Promoters. This is not just to reap the benefits of having what amounts to an unpaid pre-sales force working around the clock generating qualified leads. It’s also to mitigate the costly reputation damage that can be caused by disgruntled customers. According to a study by Zendesk, 95% of customers share negative experiences with others in their network, and research by Nielsen found that 92% of people trust recommendations — which include warnings — from people they know more than any other type of marketing or advertising.
And so, since high NPS and cultivating Promoters is vital — just as low NPS and triggering Detractors is dire — what can businesses do to achieve the former and avoid the latter? There are a wide range of strategies and tactics. In fact, there is a whole consulting field devoted to helping businesses climb the NPS ladder. However, one of the most effective and affordable methods is something that doesn’t require a $250/hour consultant (plus travel time): upgrade from a landline phone system to a cloud-based phone system.
How a Cloud-Based Phone System Boosts NPS
There are five key ways that a cloud-based phone system boosts NPS, which translates into more profitable Promoters and fewer costly Detractors:
1. Improve Responsiveness
Few things annoy customers more than being shuffled to voicemail; especially if they have a problem. According to research by HubSpot, 90% of customers rate an immediate response as important or very important when they have a customer service question.
A cloud-based phone system lets businesses route incoming calls to mobile phones, as well as use hunt groups and ring groups, to maximize the chances of a pick-up. For even more coverage, businesses can implement a cloud-based contact center for a fraction of the cost of an on-premise contact center. The end result is many more customers hearing “Hello and thank you for your call, how many I help you?”, and far fewer customers hearing “Sorry there’s nobody to answer your call, please leave a message…”
2. Improve First Call Resolution
A survey by analytics company ClickFox confirmed something that customers have been saying for decades: they hate being “bounced around” from one person or department to another, because it means they have to start telling their story from the beginning. And while most customers in this situation could probably not care less, it’s also worth noting that this is a massive source of stress for employees on the other end of the line who find themselves dealing with increasingly angry customers — including some who cross the line between irate and abusive.
A cloud-based phone system features an interactive auto-attendant that lets callers quickly and easily self-direct their call to the appropriate colleague or department. For example, the auto-attendant can be customized to route service calls based on product lines, location, purchase date, and so on.
Furthermore, in the event that customers do need to be routed elsewhere — which can happen when customers self-direct themselves to the wrong place — a cloud-based phone system lets employees continue communicating with customers while they redirect the call. As such, instead of saying: “please hold on and I’ll transfer you to the department you need,” employees can say: “I’m in the process of transferring you to the department you need, and I’m also sending through some notes based on what you’ve told me so that my colleague can more effectively resolve your issue. If you have any additional questions or comments, please feel free to share them as I will remain on the line with you until my colleague is available to join the conversation.”
3. Improve the On-Hold Experience
Let’s face it: customers don’t like being placed on-hold. However, there are times when this is simply unavoidable; particularly in smaller businesses that don’t have dozens, hundreds, or thousands of people in contact centers answering phones all day (and often all night).
A cloud-based phone system doesn’t eliminate the possibility of putting customers on-hold. But it does dramatically improve the on-hold experience by allowing businesses to quickly and easily create customized messaging that customers are likely to find relevant and timely. For example, businesses can share information about special promotions, provide safety and service updates, or simply say sorry for the higher-than-normal call volume. Sometimes an honest, humble apology goes a long way with customers.
Alternatively, customers can hear music while on-hold. A study published in the journal Psychology of Music found that playing music on-hold influenced people to perceive that they spent less time waiting than they actually did. It also increased their tolerance for waiting on-hold (i.e. instead of committing to wait 5 minutes before hanging up, they would commit to waiting 10 minutes before hanging up — and all because of the presence of music!).
4. Stay Connected with Customers
While the business landscape is rapidly becoming more digital, according to research Salesforce.com a whopping 92% of sales interactions take place over the phone — not chat, SMS or email. Yet despite this, the same research also found that 85% of customers are dissatisfied with their on-the-phone experience.
One of the biggest causes of this unhappiness is when sales reps are forced to halt an agreeable conversation, because they are leaving their desk or heading into the office. Once the touchpoint is closed, there is a risk that momentum will be lost and customers will get distracted and busy — or head to the competition, which is even worse.
A cloud-based phone system features live call transfers, which allows sales reps to switch phones/devices without halting conversations, or even pausing them. For example, a sales rep can start a call using the IP phone on their desk, seamlessly transfer it to their smartphone as they walk out of the office, and then seamlessly transfer it again to their car’s Bluetooth system. It’s fast, easy, and extremely customer-friendly. And of course, technical service reps and all other employees/agents can use live call transfer as well to everyone’s benefit.
5. Monitor Employee Performance to Drive Improvements
A cloud-based phone system allows businesses to generate detailed reports that track various metrics that relate to customer experience, such as the number of customers on hold during a particular period, the average time on hold, the number of transferred calls, and so on.
This actionable intelligence can be used to proactively identify coaching opportunities, establish best practices, and optimize human resources. For example, if a business identifies that incoming calls typically surge between 10:00 am and 12:00 pm on Monday, but this changes to between 2:00 pm and 4:00 pm on Tuesday, they can allocate their staffing coverage accordingly. They can also change their auto-attendant and on-hold messaging to inform callers about the average wait during these periods, and encourage them to call back at a different time.
At Carolina Digital Phone, our state-of-the-art cloud-based telephone system can help your business significantly and sustainably improve NPS and overall customer satisfaction — which means more referrals, sales, profits, and success!
Contact us today at (336) 544-4000 for your FREE no-risk, no-obligation and no-pressure demo. We can connect with you in-person at your business, or over-the-web.