Vaibhav’s journey as a new sales professional began with a mix of excitement and trepidation. Fresh out of college, he had always dreamed of a successful career in sales, driven by his natural charisma and passion for building relationships. However, as he stepped into the fast-paced and competitive world of sales, he quickly realized that it was not as easy as he had imagined.
The multitude of responsibilities, from prospecting and lead generation to closing deals and handling objections, felt overwhelming. Vaibhav knew that to succeed in this challenging field, he needed the guidance of someone experienced and knowledgeable.
He reached out to his uncle, Sivaranjan, who held the prestigious position of Vice President in a major corporation. Sivaranjan was delighted to see Vaibhav’s eagerness and dedication to excel in sales. Recognizing the importance of mentorship, he readily agreed to be Vaibhav’s guide on this exciting journey.
Together, they embarked on a mission to understand the sales world, learning the buying and selling process dynamics, the myths and facts about sales, the FAB model, understanding and meeting customer needs, the decision criteria in detail, the art of probing, open and closed-ended questions, the art of sales storytelling, ways to weave a sales story, the techniques to close a sales call, the psychology of closing sales calls, and after-sales service so far.
Vaibhav, do you know that customer reviews carry a lot of power? Especially in this era when everything is digitalized, and it takes one post to make complaints or recommendations go viral on social media, even faster than saying, “Customer is always right.”
Consumers take word-of-mouth recommendations – and complaints – very seriously. For 83% of respondents, recommendations from friends and family members are the most trusted source of advertising, and nearly 100% of customers polled indicated they trusted recommendations from other people – even strangers – more than brand content.
In contrast, according to Harvard Business Review research, 48% of customers who had a poor experience with a company notified 10 or more individuals. And, as it turns out, customers prefer to talk about negative customer experiences more than positive ones; according to American Express’s “Global Customer Service Barometer” report, the average customer in the United States tells 12 other people about positive encounters and 24 people about negative ones, said Siva calmly.
Oh no, it’s not good for the business, I did not know this uncle, said Vaibhav with a panicked look.
It’s obvious Vaibhav, calm down, you have no clue what your customer is thinking about the product or service, consoled Siva.
There is a way to survey and analyze your customers’ reviews to identify their loyalty and attachment to your offerings. You can take the help of the method called Net Promoter Score.
Net Promoter Score is like rocket fuel, if you leave it be, it won’t do anything, however, if you load it into a customer-driven, responsive, and proactive company, it blasts off to the sky, said Siva to make sense of a metaphor.
Companies that use NPS data to feed and direct their marketing efforts, customer success best practices, and even product development are the most successful. However, while acquiring your NPS is simple, understanding how to best use the information is as they say, “Any rocket scientist will tell you that. Many of the advanced rockets fail to reach orbit and ‘thud’ on the launch pad,” added Siva.
Uncle, I want to understand NPS better, said Vaibhav curiously.
Sure, let’s get going then.
What Is Net Promoter Score?
Vaibhav, Net Promoter Score (NPS) is a customer loyalty metric developed by Fred Reichheld, Bain & Company, and Satmetrix in 2003. It is widely used to assess the loyalty of a company’s customer base and their likelihood of recommending the company’s products or services to others. NPS is based on a simple question: “On a scale of 0 to 10, how likely are you to recommend our company/product/service to a friend or colleague?” — said Siva.
According to research conducted by Bain and Company, only a mere 2% of people respond to surveys. However, a fascinating phenomenon emerges when customers have a positive experience. They are more likely to share that experience with others, becoming natural brand advocates. When customers encounter something exceptional, they have a strong inclination to spread the word and recommend it to their friends, family, and colleagues.
This innate tendency to share positive experiences has a profound impact on a company’s reputation and customer acquisition efforts. It underscores the importance of delivering outstanding customer experiences that leave a lasting impression, inspiring customers to become enthusiastic promoters of the brand. As businesses strive to enhance customer satisfaction, they can harness the power of word-of-mouth referrals generated by delighted customers, extending the reach and influence of their offerings organically, elaborated Siva.
Imagine you went to a popular restaurant, Vaibhav, known for its delicious food, excellent service, and welcoming ambiance. The staff of the restaurant is keen to understand your loyalty and satisfaction levels, so they decide to implement NPS to collect your valuable feedback.
After having a scrumptious meal, you get a feedback form with a simple NPS question: “On a scale of 0 – 10, how likely are you to recommend our restaurant to your family and friends?”
Your response will fall into one of three categories:
- If you did not like any service, food, or ambiance, then you were surely dissatisfied with the experience and may give them a score that falls between zero to six, then there is a fair chance that you will spread negative word-of-mouth about that restaurant. Then you are a detractor. Vaibhav, in a way, detractors are good for the business as they keep the businesses on their toes to make improvements and stay ahead in the game of fierce competition.
- Let’s assume, the restaurant offers you a feedback form and you write down your name, and give them a score of seven or eight. You. The restaurant would consider you to have a satisfactory experience, however, you may not actively promote the restaurant to others. Here, you are a passive who may be loyal to the restaurant with the potential to switch to a competitor if the conditions are right.
- If you give them a score of either nine or ten, then you are deemed to exhibit behaviors of returning to the restaurant adding great value like referring more of your friends and family to the place. You have what is called a high “lifetime value” and are a promoter of the restaurant. Your feedback is not just feedback to the restaurant but a suggestion for them to rise above what they are offering currently—explained Siva.
It means promoters can help drive revenue growth, Uncle, asked Vaibhav.
Yes, Vaibhav, according to CustomerGauge research, an increase in an NPS score of 10 or more correlates with a 3.2% rise in upsale income. Similarly, in 2005, the London School of Economics determined that a 7% rise in NPS translates to a 1% increase in overall revenue, added Siva.
It is a way to get ahead of the competition, Uncle, said Vaibhav with his curious eyes.
Speaking of that, according to a study by Bain & Company, their Net Promoter Scores explain around 20% to 60% of the variation in organic growth rates among competitors. An industry’s Net Promoter leader outpaced its competitors by a factor of more than two, chuckled Siva after looking at Vaibhav’s amused face.
Wow, NPS is surely a way to improve customer experience and explore the opportunities for business growth, added Vaibhav.
Now, let’s see how to calculate NPS, said Siva.
Let’s imagine a scenario where the restaurant surveys 200 of its customers with the standard NPS feedback form. Remember that the goal of NPS is to learn about general customer sentiment, so this inquiry should not be directed at a specific service.
When the responses are tallied, 125 are promoters, 42 are passive, and 33 are detractors. The first step is to convert these quantities to percentages:
Promoters = [(200 – (42 + 33)] / 200) x 100 = 62.5%
Passive = [(200 – (125 + 33)] / 200) x 100 = 21%
Detractors = [(200 – (125 + 42 )] / 200) x 100 = 16.5%
Then, we apply the net promoter score formula:
Company NPS = %Promoters – %Detractors
Company NPS = 62.5 – 16.5 = 46
It is an interesting way to gauge customer loyalty and identify areas of improvement, said Vaibhav.
Indeed, shall we find out the reasons to measure NPS, asked Siva.
Vaibhav nodded.
What Is The Need To Measure NPS?
Vaibhav, do you know, Apple scores very high on NPS? It is a testament to its exceptional customer loyalty and the deep emotional connection it has fostered with its customer base. Several key factors like customer-centricity, design and aesthetics, customer support, ecosystem integration, brand loyalty, and marketing and branding contribute to Apple’s consistently high NPS and its ability to turn customers into brand advocates.
By consistently exceeding customer expectations and delivering an outstanding user experience, Apple has cultivated a loyal customer base that continues to promote and advocate for the brand. The company’s success in maintaining high NPS scores reflects its position as a leader in the technology industry and its ongoing commitment to customer-centricity and excellence, quoted Siva.
He continued, “The NPS methodology is designed largely to assess consumer loyalty to a company or brand – that is, how likely they are to buy again, act as a brand ambassador, and resist pressure to defect. This last criterion can alternatively be phrased as “churn rate” – the possibility of their canceling a subscription or not repurchasing. This is significant since retaining a customer is less expensive than acquiring a new one.”
Here are a few reasons why it’s important to measure NPS:
It distinguishes between good and bad profit
The good profit comes from loyal customers who not only make repeat purchases but also recommend the company to others, fostering organic growth and a positive brand image. NPS helps identify these loyal promoters and understand their preferences.
Bad profit, on the other hand, is earned from customers who lack true loyalty and may contribute to churn and negative word-of-mouth. NPS segments customers based on their scores, distinguishing Promoters (good profit) from Detractors (bad profit).
To maximize good profit, companies should prioritize customer experience and proactively address their needs. NPS feedback guides product improvements and personalized services.
For bad profit customers, identifying dissatisfaction root causes is crucial. Addressing customer pain points can potentially convert Detractors into satisfied customers and turn bad profit into good profit.
In conclusion, NPS is a powerful tool for distinguishing between good and bad profit. By leveraging NPS data, companies prioritize strategies to nurture promoters, improve customer experience, and enhance long-term profitability.
It constantly challenges businesses to improve services
It helps bifurcate product attributes based on their impact on customer satisfaction, helping companies identify which features are essential, performance-driven, or delight-oriented. By collecting NPS feedback, companies gain insights into overall customer satisfaction and the likelihood of customers becoming brand advocates.
By analyzing NPS feedback through the lens of different types of needs, companies can identify which attributes drive customer satisfaction and loyalty. This allows them to prioritize efforts in enhancing performance needs to keep customers satisfied and to focus on introducing exciting needs that delight customers, ultimately fostering stronger customer loyalty and positive word-of-mouth referrals. Additionally, addressing basic needs effectively prevents customer dissatisfaction and negative sentiment.
It roots for customer loyalty
The customer, who initially had a strong preference for Louis Phillippe and headed straight to their outlet because the brand resonated with his needs. However, when he saw a shirt in the Blackberry outlet that caught his attention, he decided to explore that option as well. This doesn’t mean he was dissatisfied with Louis Phillippe; rather, he was open to considering other options.
On the other hand, a loyal customer or promoter would have unwavering loyalty to a particular brand and would always choose that brand, regardless of any other attractive options. Loyal customers have a deep emotional connection and trust in the brand, making them less likely to be swayed by competitors.
NPS plays a vital role in identifying and differentiating between loyal and satisfied customers. NPS indeed leads to customer loyalty as companies can leverage the insights gained from promoters to strengthen their offerings, improve customer experiences, and build lasting relationships.
Vaibhav, for businesses, fostering customer loyalty is quintessential for sustainable growth and continuous profitability. Loyal customers not only make repeat purchases but also act as brand ambassadors, referring friends and family, and driving new customer acquisition. Hence, by leveraging NPS and identifying loyal promoters, companies can focus on strategies to strengthen the emotional bond with customers, enhance their experiences, and nurture brand loyalty. This, in turn, leads to increased customer retention, positive word-of-mouth, and ultimately, long-term success in the marketplace, said Siva.
With this, we conclude our thrilling expedition through the uncharted waters of the sales world. As we bid farewell to this enlightening journey, I extend my heartfelt wishes for all the luck and success that lies ahead in your sales career.
Remember Vaibhav, sales is not just about closing deals; it’s about forging lasting relationships with customers, understanding their desires, and surpassing their expectations. As you navigate the ever-evolving landscape of the sales profession, let your passion for connecting with people and delivering exceptional experiences be your guiding compass, said Siva with glee in his eyes.
Yes, uncle, I will embrace the lessons learned and carry them as invaluable tools in my pursuit of sales excellence. I will be fearless in exploring new approaches, and always keep the customer at the heart of every decision, said Vaibhav with determination in his eyes.
As you embark on your next adventures, know that your journey is not a destination but an infinite path of learning and growth. May you conquer new heights, overcome challenges, and revel in the joy of achieving your goals, said Siva.
With the wind in your sails and the knowledge in your heart, go forth and make your mark in the world of sales. The uncharted waters await your exploration, and with the right mindset and determination, you’ll navigate them with finesse, he added.
Cheers to your success, and may your sales journey be filled with triumphs, learning experiences, and an abundance of satisfied customers who become loyal advocates of your brand.
Bon voyage, dear sales professional, and may you conquer the seas of sales with unwavering zeal and tenacity, he concluded with high hopes for Vaibhav and his journey ahead.
Thank you, uncle, for being there at every first step of my journey to help me take the right first step, said Vaibhav almost emotionally.
https://www.checkmarket.com/blog/net-promoter-score/
https://blog.hubspot.com/service/net-promoter-score-benchmarks
https://www.retently.com/blog/good-net-promoter-score/
https://inmoment.com/blog/why-every-sales-rep-should-care-about-their-companys-net-promoter-score/
https://customergauge.com/blog/nps-impact-on-revenue
https://www.salesforce.com/eu/learning-centre/customer-service/calculate-net-promoter-score/
https://fluentsupport.com/wp-content/uploads/2023/06/net-promoter-score-guide-nps-calculator.jpg
https://techsee.me/wp-content/uploads/2022/05/NPS.png
https://www.the-future-of-commerce.com/wp-content/uploads/2020/07/customer-success-1200×370.jpg
Written By: Jimmy Jain
Edited By: Afreen Fatima
Society of Design Thinking Professionals
