When you’re primarily an e-commerce company, you don’t have the benefit of getting face-to-face, in-store customer feedback. Yet we’re a customer-service focused firm; we know the importance of always improving the shopping experience for our customers. So how do we keep our fingers on the pulse?
By far the best measurement we’ve found is the Net Promoter Score (NPS), a metric also used by some of the world’s most respected consumer brands, including Amazon, Costco and Apple. Why? As the use of social media has become widespread, more companies are realizing how influential customer opinions are. Many people now consider recommendations from peers to be the most reliable criteria when making buying decisions. The NPS offers a quick snapshot of a firm’s brand equity. It’s extremely valuable information—and the tool is quick, easy and cost-effective to use.
We first heard about NPS over five years ago, and started using it shortly after. What drew us to it was its simplicity, how close it would bring us to the pulse of our business and its ability to rally an organization behind a single metric.
We had no idea then what a profound impact it would have on our business. Since we started using NPS, the benefits have been huge. We’ve learned what really makes our customers love us, and adjusted our behaviour in order to make them love us more. We’re now outscoring industry giants known for customer loyalty. Here’s how we’re doing it.
The execution is simple: after a customer receives an order from us, they’re emailed a survey with a single question: how likely are you to recommend us to a member of your family or a friend? They score us on a scale of 0 (not at all likely) and 10 (extremely likely), and are given an opportunity to provide comments.
Based on those scores, customers are grouped into three categories: those who rate us 9 or 10 are Promoters, those who give us 7 or 8 are Passives, and those who give us anywhere between 0 to 6 are Detractors. Promoters are brand loyalists who will enthusiastically endorse us to others. Passives are satisfied with their experience, but are unlikely to be evangelical about it. Detractors are the most dangerous amongst the three. This category of customer is not only unhappy with the brand—they’re likely to speak negatively about it to others. Obviously we’d like to keep these to a minimum.
To arrive at our overall NPS, we simply subtract the percentage of Detractors from the Promoters, ignoring the Passives.
What do we do with this information? Every week, a cross-functional management team meets to review our results and changes to scores. (A running joke is that the NPS is simple enough that even senior executives can understand it.) We focus our attention on fluctuations, and attempt to identify reasons why change has occurred. We’re especially preoccupied with the Detractors, since we know that a significant number of our customers are acquired through word of mouth. We spend time pinpointing specific reasons why Detractors might be unhappy with their experience. Then we look for ways to diagnose and resolve the issues.
The findings of this group have led to a number of initiatives that have not only improved our customer service offerings, but given us a heightened understanding of what is most important to our customers. For example, if we learn Promoters really respond well to getting product fast, then shipping speed needs to be a focus. On the other hand, if we discover Detractors aren’t aware of our top-tier return policy, we know we need to find ways to emphasize that policy in different touch points.
Through the use of NPS, we’ve been able to make strategic decisions around what creates a high value and what creates low to negative value amongst our core customer base. Take this example: since we own and operate our own lab in a sector where most of our competitors outsource this function, we’ve been able to get our average delivery time down to three to four days; the industry standard is 10 to 14. We made this change suspecting it would benefit the business; the direct and positive impact we saw on our NPS validated our theory.
Internally, we share our scores on an ongoing basis, which helps solidify the notion that all employees affect the customer experience.
Through the strategic use of NPS, ClearlyContacts.ca has shown significant year-over-year improvement. Our current NPS score sits at 79. That’s higher than Apple (76 for laptops, 70 for iPhone and 65 for iPad, according to Satmetrix), Amazon (69) and Costco (78). We also participated in a third-party NPS survey by Ipsos Reid and found we were the clear market leader in Canada for the optical industry.
With competitors popping up on a regular basis and customers becoming more vocal about their experiences, it’s important to understand where we are excelling and where we still need to improve. The NPS is the best way we’ve found to do that.
Roger Hardy is the founder and CEO of ClearlyContacts.ca, Canada’s largest online retailer of contact lenses and eyeglasses.
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