Get CloudCherry to analyse your customer’s journey, solve problems and delight them
Puma enhanced their ‘Customer Experience’ with the help of CloudCherry.
Who are Promoters and Detractors?
CloudCherry | Featured | October 30, 2015
Promoters and detractors are terms that have been popularized by the Net Promoter Score® metric, which is used to measure customer loyalty. Promoters are highly satisfied and loyal customers who act as evangelists for your brand, while detractors are displeased customers who not only will abandon ship as soon as they can but will also let everyone know why they are displeased with your business and its products and/or services. But let’s take a closer look at these two categories of customers and how they can help your business thrive or cause it to crash and burn.
The Net Promoter Score (NPS®) is used to measure customer loyalty via a simple survey that includes only a few questions, of which the most important one is:
How likely is it that you will recommend this company/product/service to your friends and colleagues?
The respondent selects an answer on a 0 to 10 scale, where 0 represents extremely unlikely and 10 represents extremely likely.
Customers are then split into three groups. Those with scores of 9 and 10 are considered promoters, those with scores of 7 and 8 are passives, while those with scores of 6 and below are classed as detractors.
The actual Net Promoter Score is calculated by working out the percentage of promoters and detractors and then deducting the latter from the former. So, if your business has 50% promoters and 5% detractors, then your NPS is 45%.
The NPS is one of the most powerful metrics that can provide you with a glimpse into your business’ future because it allows you to determine the impact your current way of doing business has on your customers. It’s a simple survey and can be conducted every time you implement a change to determine how effective your actions have been.
Determining customer loyalty is an important indicator of the future because of the effects promoters and detractors have on your business.
Studies have found that promoters are responsible for at least 80 percent of a business’ referrals. In other words, your business has achieved such a level of customer delight that they have turned from mere customers into advocates for your brand, recommending it to their friends, family, and acquaintances.
Furthermore, promoters are much less likely to “cheat” on your brand and are much less price sensitive. In other words, if you keep offering them the delightful experience that turned them into promoters in the first place, they won’t abandon you in favor of your competition.
There is evidence that companies with high NPS grow much faster than their competition. In fact, according to a research conducted by Bain & Company, Net Promoter System℠ leaders on an average grow at more than twice the rate of competitors.
On the other hand, detractors are responsible for 80 percent of the negative word of mouth related to your company. Sadly, this negativity can do a lot of damage, especially since people who are unhappy tend to be a lot more expressive and much “louder” than their happy counterparts, who are somewhat less likely to leave positive reviews of the same magnitude by comparison. In other words, a detractor will leave ten bad reviews for every one good review a promoter will leave.
A business with a high NPS is more likely to thrive and expand than one with a low NPS. However, don’t rely solely on the figure itself. You need to constantly track your NPS so you can determine the overall trend and to ensure the actions you are taking are having a positive impact on the NPS as well as on the customers. An upward trend is what you should be aiming for, which means promoters growing faster than detractors.
Start Measuring your NPS®, Increase your Promoters and ultimately score higher in Customer Loyalty.
Sign Up For A Free Demo
“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 “