As an eCommerce merchant, Net Promoter Score® might be the most powerful KPI in your toolkit for growing your business and earning loyal customers.
Net Promoter Score is a metric that measures the likelihood of a customer recommending your business to their personal and/or professional social circle. The higher your NPS®, the higher the chance that your customers will turn into active Promoters and brand advocates for your business.
Our guide to Net Promoter Score goes into further detail on the calculations behind NPS. As an eCommerce business, you can get by without paying attention to NPS, but you can thrive by using it as a metric to grow customer loyalty and drive revenue.
Earning and retaining a loyal, happy customer is rarely something that happens by chance. Far more often, it’s the result of a deliberate, scalable process. With NPS, you have a much deeper understanding of how effective your existing marketing process is at acquiring customers.
Would you like to include NPS into your eCommerce customer acquisition and retention process to win over and retain more clients? Below, we’ve listed six best practices for using Net Promoter Score to earn loyal customers and generate more revenue from your eCommerce business.
Survey all customers, not just top spenders
Calculating your Net Promoter Score depends on you surveying an accurate and representative sample of your customers. If your NPS process only reaches a certain group of customers, it could produce an artificially high or low score, making it difficult for you to take action.
For example, if your eCommerce website allows both registered and unregistered customers to check out, it’s important that both groups are surveyed. If only registered customers take part in your NPS survey, there’s a risk of them producing an artificially high score.
NPS depends on consistency. As well as reaching a fair sample of your customers, it’s vital that you use a consistent NPS process to avoid producing results that are skewed by your audience or survey method.
Don’t overthink the statistics
Because NPS requires customers to rate their experience on a 0-10 scale, it takes more data to produce an accurate score than a simple yes/no survey.
When you survey a small number of customers, there’s a risk of outliers producing a score that doesn’t accurately reflect customer sentiment. The smaller your sample audience, the greater the risk.
Many small eCommerce businesses simply don’t have the sales volume to calculate NPS and track improvements on a monthly basis. With a small audience, monthly fluctuations in your NPS score can be the result of statistical noise instead of real data.
Make sure that your sample size is large enough to produce statistically significant data. For small merchants, this could mean taking a longer-term approach to tracking progress in order to avoid false positives.
Since NPS is a highly volatile metric, focus on closing the feedback loop and addressing the issues reported by customers. That would have a greater impact on your eCommerce business than getting a statistically significant NPS survey result.
Focus on improvement, not beating the benchmarks
NPS benchmarks are useful figures for estimating the range your Net Promoter Score can fall within, but you shouldn’t use them to compare your business to its competitors and make any judgments about its performance.
Most NPS benchmark reports group businesses into broad categories. Small eCommerce stores are placed in the same category as giants like Amazon, and regional airlines are grouped along with international carriers.
As a result, the average NPS in your consumer sector may not accurately reflect the type of experience that customers have with your business. Instead of focusing on beating the mean, focus on continually improving your Net Promoter Score over the long term.
Pay attention to more than the score
The biggest strength of Net Promoter Score – its simplicity – also has the potential to be a major weakness.
As a merchant, it’s easy to focus entirely on your Net Promoter Score as a number, with a tunnel vision-like approach to moving the number upwards at all costs. This ultimately misses the point of NPS, which is to measure and improve customer experience and satisfaction.
In eCommerce, a single factor can often turn what could have been a positive experience into a negative one. Slow shipping, poor packaging, or product photos that didn’t accurately reflect the actual item are often all it takes to turn a potential 10 into a one, two, three, or even a zero.
When you review your NPS, don’t just look at the numbers. Review comments from customers, especially from your detractors. In doing so, you’ll often discover the small but significant flaws in your sales, payment, and order fulfillment processes that hurt the customer experience.
Always close the feedback loop
The most important element of a Net Promoter system is closing the loop: a process of taking action and responding directly to a customer’s concerns, complaints or praise.
When a Detractor speaks their mind and gives your business a low score, you should respond as quickly as possible. An effective service recovery process can help you win back customers that feel unhappy or mistreated, and even turn them into satisfied, enthusiastic Promoters.
Data shows that a 5% increase in customer retention can result in a 25% to 95% improvement in profit. As an eCommerce merchant, establishing a service recovery process to close the loop with detractors should be one of the first steps you take after implementing NPS.
Calculate how much each Promoter is worth
It’s well uncommon for businesses to work extremely hard to win over Detractors while failing to leverage their Promoters. Your Promoters are a valuable marketing asset. Given the right tools and incentives, they can bring in a consistent flow of new customers.
One of the most important steps in using NPS to improve eCommerce customer acquisition is calculating the value of your Promoters.
By implementing a referral program that incentivizes advocacy and word of mouth, you can track the revenue each Promoter produces for your business. Over time, this lets you calculate a lifetime Promoter value similar to the customer lifetime value (CLV) metric used for customer acquisition.
Quantifying the value of promoters is an important step in implementing NPS over the long term, as it puts a real figure on the value of delivering a great experience. Instead of just knowing that promoters are a great result, you can assign a specific value to each new promoter you earn.
Start using Net Promoter Score to grow your business
When used effectively, Net Promoter Score helps you retain customers, generate more brand advocates, and learn more about the experience your eCommerce business delivers to its customers.
Retently makes it easy to measure customer satisfaction and grow your eCommerce business. Survey customers and calculate your Net Promoter Score!