The state of the economy is finding all of us in an deep dig to discover and fully realize our core competencies. If you’re a small or medium size business owner, casting a wide net of products and service offerings no longer works. You have to find your niche and own it. If you’ve been able to be relatively unaffected by the downturn in the economy, good for you, but gone are the days of running your business on assumptions. Why?
The results of the downturn in our economy are going to be better businesses, products and services, driven by people who are determined to make it no matter what. The only thing that’s going to keep your clients from moving over to the next company, product or service is loyalty. Are your current clients that loyal? If you think yes, then you don’t really know, unless you know yes.
How do you really know?
One method of calculating loyalty is the Net Promoter® Score (NPS); defined as,
“Net Promoter® is both a loyalty metric and a discipline for using customer feedback to fuel profitable growth in your business.”
There’s no question that everybody is looking for fuel to increase the flame of profitable growth. The question is, are you sure that your clients will stick around when these new and/or re-focused companies are ready to pluck them from you?
Over the past few months, I have been asking my clients one question:
How likely are you to recommend Motiveight to a friend or colleague?
They rate their likelihood on a scale of 0 (not likely at all) to 10 (extremely likely). With this data, I can now calculate my score based on the following:
% of Promoters – % of Detractors = NPS
- Promoters are those who rate 9-10; they will definitely recommend you
- Neutrals are those who rate 7-8; they might recommend you
- Detractors are those who rate from 0-6. They are not likely to recommend you
Motiveight’s NPS score was 69%: 75% of my clients would recommend us while 6% would not likely not.
Once your NPS is calculated, you now have a baseline in which you can measure how well you are doing at serving your clients henceforth. If it declines, it’ll require you doing some introspection and analysis to find out where you can improve. If it goes up, pat yourself on the back then continue to assess your processes and methodologies to ensure that it keeps going up.
This process and measurement is all about working ON your business, not just FOR it.
Questions to consider
- Are you sure that your clients are loyal?
- What methods do you use to measure client loyalty?
- What is your companies NPS score?
If you want to know more about NPS, I highly recommend you pick up the book The Ultimate Question. It’s where this concept is introduced. You can also head over to www.netpromoter.com for more information.