Written by: Atul Oka, Senior Director of Strategy and Business Development, DUKE Heights BIA
Nov 07, 2019
You have tried various marketing channels, and have also hired some dedicated sales people to boost the visibility of your company and increase sales. These are tried and tested ways of growing sales and have worked for many large companies, so they should work for you right?
Marketing and actively pursuing sales are essential for any business, but the most effective sales generator for any business is much closer than you think. I’m talking about your existing clients, whether they are aunt Maggie next door, or the large law firm downtown. Let me explain why.
According to the latest Global Trust in Advertising report by Nielsen, which surveyed more than 28,000 people across 56 countries, 92 percent of consumers around the world say they trust earned media, such as recommendations from friends and family, above all other forms of advertising.
What does this mean? It means that your existing clients are much more important than you think. People generally heed recommendations or warnings from those they trust, making your existing customers your biggest advocates or antagonists. In fact, negative interactions with a business are spread to twice as many people as positive ones. This is generally known as word of mouth marketing and could be solely responsible for the success or failure of your business.
The next step would then be finding the best way to ensure as many of your current customers become advocates and at the same time minimise your antagonists. Sounds logical doesn’t it? Many companies call this “client service”. The concept has been around since humans first traded goods or services with each other, yet many businesses do not know the first step in understanding and leveraging it to best effect.
It all starts with measuring customer satisfaction. The simplest and most effective tool for this may be the Net Promoter Score (NPS). All you have to do, is to get as many of your customers as possible to answer a simple question: “On a scale of zero to ten, with zero being Not likely at all, and ten being Extremely likely; How likely is it that you would recommend our company/product/service to a friend or colleague?”
Now break up responses into three chunks:
- Promoters (9-10). These are your happiest and most loyal customers, and are most likely to refer you to others. Use them for testimonials, affiliates, etc.
- Passives (7-8). These customers are happy, but are unlikely to refer you to friends. They are just as ready to buy from you as your competitors.
- Detractors (0-6). Detractors are those customers that are unhappy and can be dangerous for your small business and brand, by spreading negative messages and reviews. Figure out their problems and fix them!
We now have some useful information, but let’s move forward and actually calculate your Net Promoter Score (NPS). You do this subtracting the percentage of Detractors from the percentage of Promoters. This net score will tell you your net word of mouth influence.
Here are some NPS scores compiled by Customer Guru for well known companies and brands. Costo has a net positive score of 79 meaning a LOT of existing customers are saying great things about the company. Interestingly both Facebook and MacDonald’s have negative scores, -21 and -8 respectively. Go ahead and find out where you stand!
Business author Michael LeBoeuf is famously credited for saying “A satisfied customer is the best strategy of them all.”