Measuring customer satisfaction

Differentiate your business by the way you treat and serve your customers

Happy customers are much more likely to stay with your business long-term, and they’re also likely to provide you with referrals – one of your best methods of acquisition.

This makes knowing the satisfaction of your customers pivotal if you have ambitions to grow.

While there is no single metric that will tell you everything you need to know when it comes to customers satisfaction, the Net Promoter Score (NPS) is your best place to start. This is a tool that measures the experience your customers have with your business to predict its potential for growth. And this is all measured by asking your customers one simple question:

“How likely are you to recommend our business to a friend or colleague?”

This question goes beyond just a customer’s satisfaction; it learns what action they would take based on their experience with your business. Many companies across various industries including Intuit, Apple and Tesla use NPS to improve their profitability, and it’s becoming increasingly adopted.

These are the steps you can follow to use NPS in your business.

Step 1. Capturing

Begin by identifying customers to answer the question, “How likely is it that you would recommend our company to a friend or colleague?” on a scale of 0-10. You should also ask for a reason behind why the give you the rating.

The easiest way to capture this is to use a survey tool such as SurveyMonkey or Typeform.

As for when to ask, you have several options, each with their own advantages:

  • End of a project or deliverable: the most logical place to start because your customer has had a chance to see your work from start to finish. For the customer, it will also feel like an appropriate time to give feedback.
  • End of a customer call, resolution or office visit: in a follow-up email include a link and ask if they would mind filling out a short 1-2 question survey.
  • Beginning of a formal relationship: this will measure customer satisfaction at a relationship starting point to compare to further on. It will also tell you how your team performs at the prospecting, sales, or onboarding phase.
  • End of a relationship: in the unfortunate event of a bad situation at the end of a customer relationship, you should make an effort to ask for feedback. If a customer isn’t happy, you need to know why so you can fix any issues in the future. Don’t dodge feedback even if you expect it to be negative.
  • Post-seasonal: the end of a busy financial year or post-Christmas can be excellent times to send out a survey to your customers to ask how satisfied they were with you during that period.

Step 2. Measuring

NPS scores work by placing your customers into one of three categories based on the feedback they provide you.

  • Promoters (scores 9 – 10): loyal and enthusiastic customers who will keep using your services and refer others
  • Passives (scores 7 – 8): satisfied but unenthusiastic customers who are at risk of moving to a competitor
  • Detractors (score 0 – 6): unhappy customers who can damage your brand and impede your growth with negative word of mouth

You’ll notice that this scale is weighted more towards the detractors. This is so that you can discover who was really wowed by your service, who was dissatisfied and who was somewhere in the middle.

Net Promoter Score = % promoters – % detractors

You can determine your NPS by calculating the difference between the percentage of promoters and detractors as an absolute number. You could end up with a score anywhere between 100 and -100. For example, if your business has 50% promoters, 40% passives, and 10% detractors, your NPS is +40.

Any positive NPS is what you should be aiming for at a minimum, and the higher the better. Globally, the best performing businesses are achieving NPS scores of 40 or more.

Step 3. Capitalising and repeating

Once you have your NPS, you need to consider why you have that score. What drove your customer to give you that rating? This is where each customer’s individual reason for their score is worth analysing.

Look for common themes across promoters, passives, and detractors and determine areas of your business that you can improve in. Use your gathered information to determine where changes should be made and always be aiming to improve your NPS.

Measuring your NPS is an ongoing process

Make it part of your regular work to approach customers to answer your question and provide feedback. Be aware of any changes made to your business and be on the lookout for how they affect your score, along with any other dramatic changes—good or bad—to your NPS.

Customer satisfaction is crucial to the growth of your business and your NPS is the best way to tell you what experience you are giving your customers. This makes it one of the essential metrics you should be tracking for your business.

With this knowledge, you can make educated strategic decisions and calculated changes that will improve the service you provide to your customer and the strength of your business.

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