Inside Small Business | Small Business & Home Business Marketing
Raving Fans and Loyal Customers = More Sales (Pt.4)
A Loyalty Measure for Businesses of All Sizes – Net Promoters
The idea of Net Promoters of your business is a quick and easy way to identify the positive, raving fans (net promoters) vs. the detractors of your brand.
The concept is based on one question: Would you recommend us to a friend or colleague? Then answer is provided in a format of 0 for “extremely negative” to 10 ” extremely positive.”
What does a high percentage say about a company? A higher Net Promoter score has been correlated to a future increase in sales and referral sales. Categories of responses are shown below:
Promoters ( those who answer 9 or 10) are loyal enthusiasts who keep buying from a company and spread the word to their network
Passive (7 or 
are satisfied but unenthusiastic customers that can easily be lost to competition
Detractors (0 to 6) are unhappy and will stop their relationship with the company at the first opportunity
NPS (Net Promoter Score) = % of Promoters – % of Detractors
Why is this metric important? Especially to a small business.
1. It is easy to implement and monitor over time, it is for all intensive purposes one question.
2. It is easy to score and monitor over time.
3. It is easy to explain and understand.
For more information on Net Promoters: www.netpromoter.com
Loyalty as Part of a Program
The most common form of loyalty is seen in programs from Credit Card or Airline type programs. These are incentive programs, not true loyalty programs. The test of loyalty is if the program discontinued, will the customers stay. If not, it is an incentive. The use of incentives are perfectly fine, however, understand why your customers are staying with your business.
However, non-conventional loyalty programs are less incentive based. They can be internal programs for service, sales or marketing; goals to hit shipping times, quality tests, or customer service levels. It all adds up to loyalty.
It is a key driver of success for enduring businesses, small and large. The importance of knowing your customer groups, their lifecycle, needs/wants that drive their purchase behavior and finally consistent measures of loyalty that correlate to increased revenue. It is a long journey to understand your customer; loyalty is a large part of the journey of that understanding.
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Posted on Friday, March 21st, 2008 at 10:04 am and is filed under Boardroom, Branding, Business, Computers, Customer Service, Entrepreneurship, Internet, Marketing, Sales. You can follow any responses to this entry through the RSS 2.0 feed.
