The Net Promoter Score (NPS) lets companies gauge how customers view them. It separates respondents into three categories: promoters, passives, and detractors. Unlike other performance indicators, NPS looks at overall customer sentiment, giving greater insight into customer satisfaction.
NPS is a globally recognized benchmark measuring customer loyalty. It does not focus on satisfaction with a specific brand, service, or interaction. It does not focus on satisfaction with a specific brand, service, or interaction. However, any individual interaction impacts NPS as well.
Many Fortune 1000 companies use Net Promoter Scores to measure customer satisfaction. This method determines the likelihood of customers leaving and helps companies take aggressive measures to prevent it. Targeting unhappy customers and addressing their negative issues, helps companies keep customers. This also reduces damage from negative word-of-mouth. According to consultants, reaching out to customers can prevent 11% of customer churn.
While strategic marketing and advertising are useful ways of reaching new customers, nothing is as powerful or profitable as good, old-fashioned word-of-mouth referrals. Consider these eye-opening statistics:
- Customers acquired through word-of-mouth referrals have a 37% higher retention rate than non-referrals. (Source: Deloitte)
- Those customers earned through word-of-mouth referrals are worth 16% more in profits than non-referrals. (Source: Harvard Business Review)
- Customers gained through word-of-mouth referrals have an 18% lower churn rate vs. non-referrals. (Source: GfK Marketing Intelligence Review)
You don’t need to be an MBA to know that increasing word-of-mouth referrals is good for business. In the long run, that often means the difference between success and failure. So, 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
Businesses worldwide use the Net Promoter Score (NPS) to measure customer loyalty. The index asks customers to rate on a scale of 0-10 how likely they would recommend a business’s product/service to a friend or colleague. Based on their responses, customers fall into three groups:
- Customers who respond with a score of 0-6 become “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 “Passives” who are reasonably happy with their experience, but they are not necessarily loyal.
- Customers who respond with a score of 9-10 are “Promoters” who are highly satisfied, and typically willing to serve as enthusiastic brand ambassadors. This means directing their friends or colleagues to choose a business and encouraging strangers to do so as well. An example of this is responding to online posts from people who they don’t know.
Improving the Customer Journey
Customer experience is a critical factor in any business’s success. Companies must strive to create positive experiences for their customers at every touchpoint along the customer journey. This journey includes pre-purchase, during-purchase, and post-purchase. Doing so will increase customer loyalty and satisfaction, leading to higher Net Promoter Scores (NPS).
Businesses want to limit the number of Detractors 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 damage often caused by unhappy 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 advice — which includes warnings — from people they know more than any other type of marketing or advertising.
And so, since high NPS and growing Promoters are vital – what can businesses do to gain the former and avoid the latter? There are a wide range of strategies and tactics. There is a whole consulting field devoted to helping businesses climb the NPS ladder. However, one of the most effective and affordable methods is simple: 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 increases Net Promoter Scores (NPS), which translates into more profitable Promoters and fewer costly Detractors:
1. Improve Responsiveness
Few things annoy people more than getting someone’s voicemail; especially if they have a problem. According to research by HubSpot, 90% of customers rate a quick 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 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. The result is that they start telling their story repeatedly. 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 easily self-direct their calls to the right person or department. For example, customizing the auto-attendant to route service calls based on product lines, location, purchase date, and so on.
Also, if customers do need to be routed elsewhere — which can happen when they self-direct themselves to the wrong place — a cloud-based phone system lets employees keep talking 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. I’m also sending through some notes so that my colleague can more effectively resolve your issue. If you have any more questions or comments, please feel free to share them as I will remain on the line with you.”
3. Improve the On-Hold Experience
Let’s face it: Placing customers on hold is not ideal. Yet, there are times when this is unavoidable; notably 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 remove the chance of putting customers on hold. However, it does improve the on-hold experience by letting businesses quickly and easily build customized messaging that customers are likely to find relevant and timely. For example, businesses can share information about special promotions, provide updates, or simply say sorry for the higher-than-normal call volume. Sometimes an honest, humble apology goes a long way with customers. This goes a long way toward increasing Net Promoter Scores.
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 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 from Salesforce.com a whopping 92% of sales interactions take place over the phone. Yet despite this, the same research also found that 85% of customers remain dissatisfied with their on-the-phone experience.
One of the biggest causes of this unhappiness is when sales reps must halt an agreeable conversation because they are leaving their desk or heading into the office. After closing the touchpoint, there is a risk of losing momentum. This results in customer distraction. At this point, there is even a risk of them going to the competition.
A cloud-based phone system features live call transfers, which allows sales reps to switch phones/devices without ending conversations. For example, a sales rep can start a call using the IP phone on their desk, and seamlessly transfer it to their smartphone as they walk out of the office. From there, they can 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 different metrics that relate to customer experience. These include 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 identify coaching opportunities, establish best practices, and optimize human resources. For example, if a business identifies that incoming calls typically surge between 10:00 a.m. and 12:00 p.m. on Monday, but this changes to between 2:00 p.m. and 4:00 p.m. 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.
The Bottom Line
The Bottom Line: Increasing the Net Promoter Score (NPS) requires a focus on customer loyalty, identifying and addressing detractors, and leveraging promoters to enhance customer experiences.
To improve NPS, companies need to focus on creating amazing customer experiences by personalizing interactions and surpassing expectations. Understanding the customer’s journey, from initial contact to post-purchase support, helps identify pain points and opportunities for improvement.
Using a cloud-based telephone system as part of your strategy to improve NPS is one of the keys to giving customers a better experience and creating happy customers for life.
Collecting feedback from customers is essential in gaining valuable insights and measuring NPS accurately. This can be done through customer surveys, open-ended questions, or real-time interactions.
By focusing on customer loyalty, addressing detractors, and leveraging promoters, businesses can increase their Net Promoter Score and build a base of satisfied and loyal customers.
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.