During an economic downturn, as budgets are slashed, acquiring new customers can become exponentially more challenging. As a result, businesses often respond with a re-energized focus on retaining existing customers. Our recent study found 37% of organizations have increased focus on customer retention and loyalty as a direct result of the COVID-19 pandemic.
With retention top of mind for brands today, it’s key to establish a process for measuring customer satisfaction and checking in on customer health.
Running a Net Promoter Score® program is a great place to start. While “transactional NPS” provides a more granular view of which customer interactions are surpassing expectations and which are missing the mark, “relational NPS” offers an overall snapshot of customer satisfaction at a specific point in time. With consistent surveying, you can track customer experience over time and understand the overall perception of your brand—and what you can do to improve satisfaction and retention.
In a recent survey of senior CX pros from SurveyMonkey’s CX leader roundtable, 80% had relational Net Promoter Score (rNPS) programs at their organization. Nearly 50% analyzed rNPS on a quarterly basis with monthly analysis not far behind.
As you plan for 2021, consider these top four takeaways on rNPS and customer retention, based on insights from our CX leader roundtable discussion.
#1 Right now rNPS matters more
Companies right now have to move fast to make critical business decisions in uncertain times. But you can’t just move fast; you have to move fast in the right direction. That’s where your customers come in, and savvy leaders make sure to feed their strategy with customer insights. No wonder, 72% of CX leaders surveyed for the roundtable said their rNPS program has become more important since COVID.
Some made tweaks to acknowledge the pandemic, or to emphasize a desire to listen and respond to customers’ changing needs, or tailor questions to account for COVID. Regardless, the vast majority (90%) agreed their rNPS data is somewhat, very, or extremely valuable today.
#2 Get granular and combine rNPS with operational data for impact
For the CX leaders in our roundtable, rNPS data is more enlightening—and compelling—when part of a larger data set. As Charles Gao, Senior Manager, Business Strategy & Analytics at the Golden State Warriors noted, NPS is one piece of a broader story. We need to “take data into consideration, but look at everything holistically.”
While rNPS is a good starting point that presents a simplified view of customer sentiment, tying rNPS to a financial upside can enable you to have a meaningful impact on customer outcomes. This also helps with getting executive buy-in from your retention- and growth-obsessed CEO.
To improve analysis and tell a broader, more impactful story, 61% of surveyed CX leaders combine rNPS with customer data, 45% with behavioral data, and 32% with financial data. Joining rNPS data with behavioral customer attributes, sliced by functionality or how long they’ve been a customer, can help get the top line insights that are key to influencing your organization to take action.
It’s also helpful to get granular and really dig into what’s driving your score. For instance, you can create sub categories for customers to rate using rNPS surveys. Then, looking at correlations with overall NPS, you may identify items that are not as important to people as you assumed.
To go in-depth, you can use key drivers to help understand what’s impacting your score. The Key Driver Question asks “How would you rate us in these areas?” For instance, a restaurant that has moved to take out only during the pandemic might ask for input into: taste of food, speed of delivery, quality of ingredients.
If you have a low NPS score with a high correlation to a key driver, this highlights a problem area your business can focus on to improve customer experience.
#3 Socialize results and enable cross-functional teams to take action
With some 72% of CX leaders revealing their cross-functional partners drive the one:many action plan in their organizations, your ability to improve the customer experience depends on how well you enable cross-functional teams to take action.
You can only turn feedback into improvement by sharing customer insights. So what’s the best way to socialize rNPS updates to ensure your organization can take action?
Self-service isn’t the best option, according to our CX leader roundtable, because it’s difficult to get on the same page if everyone is interpreting the data on their own.
However, the CX leaders did recommend:
Telling a focused story. People are better able to understand the significance of the data when you use storytelling.
Going beyond graphs. You never get the human component from a graph alone. You can take a screenshot of a dashboard, but make sure to add human insights too.
Finding balance to gain trust. You need to present bad news too, but with tact. By pulling out both positive and negative results, you can build trust internally and have more influence.
#4 Measure impact of rNPS
Relational NPS is a good way to benchmark against peers and competitors as well as track changes with your customer satisfaction over time.
At SurveyMonkey we know promoters are renewing at 15 points higher than our detractors on our self-service survey business. We can join that with financial data and see that customer experience is good for growth.
The CX leaders in our roundtable are measuring the return on investment of their rNPS programs by gauging whether it improves CX metrics (50%) or has an impact on retention rate (40%). Others consider impact on upsell or cross-sell, net growth or cost-to-service.
Ultimately, you can’t retain customers if you don’t understand them. With rNPS, you can really drive customer centricity and make important decisions based on data-driven insights. As our president Tom Hale has noted, “it all starts with being curious.”
Leveraging relational NPS can help you predict churn and customer growth, which is going to serve you well in 2021 as we continue navigating our way through the global pandemic.
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Net Promoter Score and NPS are registered trademarks of Bain & Company, Inc., Fred Reichheld and Satmetrix Systems, Inc.