Customer Loyalty Is Spelled N-P-S NPS is a measurement tool that helps businesses gauge how likely customers are to refer others.
By Todd Latz •
Opinions expressed by Entrepreneur contributors are their own.
Superior customer loyalty is critically important for any successful business. However, many leaders struggle with how to effectively measure it. How loyal are your customers? What are they saying about your products or services to others? Do they promote you to others and provide an incredibly valuable word-of-mouth endorsement? To answer these questions, we look to Net Promoter Scores (NPS). NPS is a relatively simple measurement tool that helps businesses gauge how likely their customers are to refer family members and friends to their products or services. NPS is also a leading indicator, and when used optimally, it can be a predictor of future customer engagement and growth. Since NPS allows for real-time measurement of customer satisfaction, it allows management to take immediate action to improve operations based on customer feedback.
Related: Analyzing the Science Behind Customer Loyalty
How NPS works.
After purchasing your product or service, your customers are asked one question: "how likely are you to recommend our company/product/service to a friend or family member?" The customer responds on a scale from 0-10. Scores of 9 or 10 are considered "Promoters" -- satisfied customers who are more likely to continue buying your products or services and to recommend you to their friends and family. Scores of 0-6 are considered "Detractors" -- unsatisfied customers who are more likely to complain about a negative experience or speak poorly of your brand. Scores of 7 or 8 are considered "Passives" -- satisfied customers who are not enthusiastic enough to actively promote, and may try a competing offering next time. To calculate a NPS rating, you subtract the percentage of Detractors from the percentage of Promoters. Passives are part of the denominator and thus do not help your score.
A NPS of 50+ is excellent, and leading consumer brands, such as Costco, USAA insurance and Nordstrom routinely score in the high 70s and enjoy fierce customer loyalty. Healthcare companies typically have been slower to adopt NPS as a measure of patient loyalty, and when they have, their NPS ratings have often been poor. National NPS averages for the healthcare industry are as low as just 17 and are often the result of access issues, long wait times, and a focus on their own, rather than their customer's convenience. However, there are exceptions, especially where there is an intense focus on customer experience. At GoHealth Urgent Care, by making our patients and the quality of their care our highest priority, we have routinely achieved NPS ratings of 90.
Related: 25 Tips for Earning Customer Loyalty
What to know before implementing NPS.
Most companies want to understand their customers better, but many are reluctant to open the door to negative feedback. You need to embrace the feedback -- if your customers have a bad experience, they are going to tell others about it, and it is imperative for you to hear this feedback so that you can set the course for positive change.
How to implement NPS.
You can implement NPS through phone, email or internet. Our GoHealth Urgent Care patients receive an NPS query via text message shortly after visiting a center. Our patients can then respond and have the option to leave a comment for their clinician. This simplicity ensures a higher response rate and supports an effortless patient experience.
How to boost NPS ratings.
Excellent customer service begins with your team. When your team is passionate, energetic and focused on a singular purpose or customer promise (for GoHealth Urgent Care it's "we put you first"), that positivity permeates your customers.
Look for ways to make customers' experiences more personal. We have found that introducing yourself every time better connects patients to their clinical team, makes them more likely to express any concerns during their visit (instead of after they leave on social media) and results in high NPS ratings. The lasting impression made during a customer's final few minutes at your store/center is incredibly important.
Related: 3 Ways to Increase Customer Loyalty
A leading indicator for future success.
Utilizing NPS to measure your effectiveness from your customer's perspective can be invaluable. NPS ratings can be broken down by department, product, store or even individual team member to gauge what is working, and what needs improvement. NPS also helps set clear goals for improving the customer experience. Our industry-leading NPS ratings have given us concrete, real-time, actionable data to measure and confirm that we are delivering on the promises we make every day to our patients. Positive NPS ratings indicate satisfied, loyal customers who are much more likely to tell their friends, neighbors and family about their exemplary experiences -- the best possible endorsement for any brand.
