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.
To be most effective, NPS results must make it back to the frontline in a timely and individualized manner, so it can drive behavior change within an organization that will keep promoters happy. In other words, identify what they don't like and fix it.
Three Segments of Customers Based on NPS
The revolutionary part is that it all focuses on one simple question: "How likely is it that you would recommend a company (product or service) to a colleague or friend?" They measured this on a 0-10 scale.
Riechheld and Markey identified three segments of customers—Promoters, Passives, and Detractors—based on their loyalty and enthusiasm about the company or product.
- Promoters (scoring 9-10) are the ones who are delightedly loyal to your brand, tell their friends about you, and generate the most profits and sustainable growth.
- Passives (7-8) are positively passive and could take or leave your product.
- Detractors (6-0) actively dislike doing business with you and go out of their way to spread the word. They're the ones complaining on Twitter.
Turning Customers Into Promoters
Events provide one-to-one interactions with customers, offering an important and often overlooked contact point at which customers can be transformed into Promoters and Promoters can be activated.
The key is to nurture existing customers by enriching their experiences and responding quickly to feedback. Provide more targeted event experiences that let existing customers and prospects explore the most relevant content and allow them to connect with product experts to resolve problems.
Events are also one of the best channels for spreading word of mouth, which drives 20%-50% of all purchasing decisions. Use your events to allow customers to connect with one another. People respond best to recommendations from a trusted source.
Another key to encouraging and nurturing customer loyalty is to create an engaged social media community around your event. Directly communicate with your audience via social platforms and use them to build stronger ties using mobile web technologies creatively during events.
Customer loyalty goes beyond exceptional customer experiences. It has to include what Bain calls a closed feedback loop. Bain suggests event managers should be contacting all segments of customers within 24-48 hours of receiving survey feedback. Business-to-business respondents have lower tolerance than consumers if they get no response to feedback—and they may well refuse to engage further with you if the feedback loop is not closed.
Powerful and meaningful event experiences can turn more satisfied customers into promoters who will spread their delight about your brand and return again and again.
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Leading marketers are using the NPS metric to measure changes in their Promoters over time, so they can get the insights into customers' feelings they need to optimize and be accountable for the customer experience.
Continue reading "Events Can Help Turn Customers Into Promoters" ... Read the full article
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