Not all customers are created equal. Marketers who understand the power of the most influential customers, called Promoters, are using a vital metric, the Net Promoter Score (NPS), to transform companies across industries and sectors.
Event marketers are in an ideal position to use the power of this metric. Events that are targeted strategically can give new and existing Promoters a voice to let them share their stories and give them a reason to get excited. Motivated Promoters, in turn, share the good word about their favorite products and services with friends and colleagues.
Marketo once called this rate of converting customers to Promoters the "forgotten conversion rate." The proof is mounting that keeping this breed of customer happy is the real key to long-term profitability.
The NPS is a customer loyalty metric—quantified by Fred Reichheld, Bain & Company, and Satmetrix—that evaluates, on a scale of 0-10, how likely people would be to recommend your company or product to others.
The Ultimate Question
In the book The Ultimate Question 2.0 co-authors Fred Reichheld and Rob Markey show how major market leaders, such as Apple, GE, Zappos, eBay, and even the UK's National Health System, are using NPS to measure future customer loyalty. When companies have a high NPS, they tend to outgrow their competitors in the industry by up to 200%.
According to Bain's analysis, loyal customers buy more, generate new customers through their referrals, stay longer, and cost less to serve. That's why a higher NPS relative to competitors can explain significant variations in growth rates within an industry.
Many marketers rely instead on conventional customer-satisfaction surveys. Those are not good predictors of future customer satisfaction and not as actionable as the NPS metric, according to Bain.
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