How to use Net Promoter ScoreSM for Customer Referral Success

How to use Net Promoter ScoreSM for Customer Referral Success

CloudCherry | Featured | December 18, 2015

Net Promoter Score For Customer Referral Success

Discover How NPS® can provide you with vital information to Help you Increase Customer Referrals

The Net Promoter ScoreSM and model is highly useful in determining how people feel about your company and in segmenting your customers into promoters, passives and detractors. However, many businesses don’t seem to be aware of the fact that those promoters are only people who are willing to recommend your company to someone else, not necessarily customers who have or will actually refer your products or services.

NPS tells you who is willing to recommend your business, which doesn’t mean those customers have or will provide referrals.

So, while NPS and the whole model can provide you with valuable information, if you want to increase customer referrals you need to take a more proactive approach. Luckily, the Net Promoter ScoreSM system gives you a vital starting point, namely a list of people who are willing to recommend your company. Now, you need to take further action. Here are a few suggestions to help you increase those customer referrals.

1. Create a Plan to Generate Referrals

People don’t automatically refer other customers to your business. Yes, some might just happen, but those occasions are few and far between. Generally, someone will refer your business because you did something that encouraged them to do so. And no, it’s not having a great product or amazing customer service. That just creates a delightful experience for the customer and turns them, in all likelihood, into a promoter. But remember, promoters are only people who are willing to recommend your company. Generally speaking, though, people don’t actually get to the recommendation/referral stage without some prodding.

Referrals are not automatic just because you have a great product or awesome customer service. You need to ask for them, or you’ll never get them.

In other words, you need to ask for referrals. Most customers have no problem with an employee asking for a referral, but make sure you get the timing right. In other words, don’t ask for a referral while you are taking their money. Try asking for referrals before or after you hand over the bill, when your customers are more receptive to the idea.

2. Provide the Right Tools

Asking customers to recommend your business to other people without providing them the right means/tools is a waste of time. Hand out business cards, offer a special page on your website, or a brochure or some other form of printed material introducing your company and the services you offer. This way, there’s a better chance the person on the receiving end of the recommendation will actually get in touch with you. However, if you do not give the customer something to take home, they might talk about your company for a few minutes maybe but then you’ll quickly be forgotten.

Provide your customers with the tools they need for an effective referral, unless you want to be forgotten.

 

3. Establish an Incentive-Based Referral Program

One of the most effective ways to get customers to provide referrals is to offer them an incentive to do so. However, this approach can backfire as much as it can prove successful if you don’t take the time to find out what makes your customers really tick. The better you know them, the more effective the incentive can be. Keep in mind, though, that you want that incentive to be in line with your products or services.

In other words, if you own a pet store, don’t make your incentive a freebie dinner at a restaurant. Instead, offer them discounts on the products you sell or even free items. And you can actually take things further by tailoring each incentive to the person in question. For example, if customer X owns a Chinchilla and customer Y has an English bulldog, you could provide incentives tailored to their specific needs – we’re pretty sure the English bulldog owner would be ecstatic with a gas mask, for example.

Provide incentives, but choose them wisely and tailor them to your individual customers to provide an even more personalized experience that will be highly appreciated.

Once you set up your referral program, let your best customers know about it and, go back to the previous point, which means providing them with the tools they need for an effective referral.

4. Ask your most Influential Customers for Referrals

Influential customers are those customers whose opinion carries a lot of weight with other people in your customer base. An extreme example would be having Paris Hilton as a customer. She might not necessarily be your best customer, but her opinion would carry a lot of weight with other people who might shop at your pet store. This is an especially effective approach if you don’t have a lot of resources because the result tends to be a lot of highly targeted, quality referrals.

Get referrals from influential customers. Even if they aren’t your best customers, they’re still the ones other people listen to most and whose opinions are highly valued, which is the best way to get highly valuable referrals.

Build Relationships

The key to getting great referrals is to build relationships. You have to build relationships with your best and most influential customers. You won’t get any referrals until these people trust you completely, and to achieve that you need to act as if every time a customer comes into contact with your business, that contact will be a deciding factor in whether you get a referral or not, which is exactly what it will be. Every touchpoint, every interaction, every word from the lips of your employees needs to be geared toward meeting and exceeding the customer’s expectations so you can, one day, get those highly valuable referrals you covet.

Building relationships will not only make it easier to get great referrals, but it will also increase the lifetime value of your existing customers.

An added benefit of building relationships is that those customers’ lifetime value will increase significantly and they’ll be loyal for life.

Where does NPS fit in with all of the above, you ask? Simple. NPS gives you the list of customers who are open to providing referrals, which will make your job that much easier. Additionally, you get the list of people who are detractors – i.e. not willing to recommend your company – whom you can tap into to discover more about what improvements you can make so that when those referrals do start pouring in, they won’t go to waste.

NPS helps you by providing you with the information on who to target for referrals, as well as showing you who’s displeased with your company, which will help you make the necessary improvements to ensure those referrals don’t go to waste.

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“Net Promoter, NPS, and the NPS-related emoticons are registered service marks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld”