And it’s not necessarily those who spend the most….
The squeaky wheel is the one that gets the oil. We all know that. And the customers that complain are the ones we listen to, and with good cause. But when we do so we often forget to pay sufficient attention to our other customers. Because these “wheels” aren’t “squeaking” we don’t give them enough attention (or oil)!
So, if you don’t listen to your customers how do you know what they really think about you? And how does what they think translate into lost or gained dollars and business?
There is a simple question that you can ask. This is often called the Customer Loyalty Question, and it underpins the Net Promoter Score approach (developed by Bain & Co.) used by many businesses to gauge the loyalty of their customer base. The question is this:
“On a scale of 1 to 10, how likely would you be to recommend our company to a friend or colleague?”
Based on the response, you can classify your customers as:
|0 – 6||Detractors: unhappy, potentially damaging your brand with negative word-of-mouth|
|7 – 8||Passives: satisfied but indifferent, could be lured away|
|9 – 10||Promoters: loyal customers who are also ripe for referrals|
The value of doing this is that you can identify where and how your customers sit on the ‘loyalty continuum’, and you can determine what to do with your resources, where to focus them, and what to do with them when you do.
For example, for your detractors you could engage them in a conversation and ask them for ideas on what you could do to improve things; or it might be as simple as apologizing for a perceived or actual slight. By engaging with them and listening to them people feel validated, and they are likely to become somewhat warmer in their attitude and behaviour towards to you, and less likely to spread a negative word-of-mouth about you.
For your passives, you can ask them a similar question and thank them for being a customer. They feel wanted and respected, and you are building up a stronger and closer relationship with them – this moves them closer to becoming advocates for you.
For your advocates, share your appreciation, give them insights and ideas that make them feel special and even more engaged with. Ask them how they would share their experience of being a customer of yours with someone else, this helps them to actually do so when they have the opportunity. Or share with them ways that they can share their enthusiasm and passion with other advocates, and with other people who they feel would benefit from being a customer of yours.
Address all three of the areas – don’t just look after your advocates, don’t forget that the costs of replacing a lost customer are significant; that your advocates can bring in a lot of other new clients by acting as a ‘trusted sales force’; and your passives can be better retained against the poaching efforts of competitors.
To find out more about how you can use this question to retain more clients, improve customer spending and attract new customers click here to download the Customer Loyalty Cheat Sheet.
To view or download a PDF version of this blog click here
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Click here to find out more about Andrew Cooke and Growth & Profit Solutions.