As an ecommerce business, Net Promoter Score® might be the most powerful KPI in your CX toolkit.
You can get by without paying attention to NPS, but you will thrive when using it as a growth north star.
Net Promoter Score is a metric that measures the likelihood of a customer recommending your brand to their personal and professional social circle. The higher your NPS, the higher the chance that your customers will turn into active Promoters and enthusiastic advocates for your products.
Earning and retaining loyal, happy customers is rarely something that happens by chance. Far more often, it’s the result of a deliberate, scalable process. Moreover, with NPS, you also have a deeper understanding of how effective your existing marketing 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 9 tips & tricks for using Net Promoter Score to earn loyal customers and generate more revenue from your ecommerce business.
1. Survey all customers, not just top spenders
Calculating your Net Promoter Score and effectively measuring customer satisfaction with your brand depends on you surveying an accurate and representative sample of your customers. If your post-purchase survey 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 online store 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 process to avoid producing results that are skewed by your audience segmentation.
2. 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 stores simply don’t get enough orders for a relevant NPS process that would allow them to accurately 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 volatile metric, focus on closing the feedback loop and addressing the issues reported by customers. That would have a greater impact on your business than getting a statistically significant NPS survey result.
3. Focus on improvement, not beating the benchmarks
CX benchmarks are useful figures for estimating the range your Net Promoter Score can fall within, but you shouldn’t make any judgments about its performance without looking into the context.
Most NPS benchmark reports group businesses into broad categories. Small 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 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.
4. Pay attention to CLV more than the score
The biggest strength of the Net Promoter Score – its simplicity – also has the potential to be a major weakness.
As a brand, 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 or even a zero.
The majority of ecommerce business owners think that the product is the most important aspect that influences customer experience, with shipment and delivery coming next. It is true, but these aren’t the only business areas to take care of. Even if the product is of premium quality, there are many details that can influence the overall satisfaction and the score.
Any flaws in the purchase process can lead to dissatisfaction. Before customers get the product delivered, they will spend a lot of time on your website, and if their experience isn’t of top quality, they will never become promoters of your business or even get through with their purchase abandoning the cart mid-way.
A website that is hard to navigate, is not mobile friendly, with no or little options to filter the products, unreliable search, plain descriptions, hard-to-locate cart, topped up by limited or insecure payment methods and lack of timely support across channels, will divert customers away, regardless of the product quality.
Even if you do everything right, there is another aspect to consider to improve customer experience and namely personalization. Delivering exactly those services or products that a client needs is a powerful tool that enables businesses to increase sales and improve retention.
What’s more, your team needs to be receptive to your customer’s goals and needs and be able to improve the customer experience at all times. Incorporating NPS into employee performance can help you get the right outcome.
When you review your results, 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 CX.
5. Always close the feedback loop
The most important element of the NPS process is closing the feedback 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 brand a low score, you should respond as quickly as possible. An effective service recovery process can help you win back customers that feel mistreated, and even turn them into satisfied, enthusiastic Promoters.
In many cases customers will complain about the same thing, so fixing these pain points promptly will decrease dramatically dissatisfaction levels, relieve your workforce and boost retention rates.
Data shows that a 5% increase in customer retention can result in a 25% to 95% improvement in profit. As an ecommerce store, establishing a service recovery process to close the loop with Detractors should be one of the first steps you take after implementing NPS.
6. 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. With 83% of consumers completely or somewhat trusting the recommendations of friends and family and 66% trusting opinions posted online – the value of Promoters and user generated content becomes even greater especially for online shopping.
One of the most important steps in using NPS to improve customer retention and 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.
7. Predict repurchase intent
NPS is a useful metric when it comes to predicting purchase behavior. The higher the score, the higher the probability of new & recurring purchases, as Promoters will gladly provide word-of-mouth advertising attracting new customers.
Naturally, Detractors will most likely never come back, Passives may keep buying as long as they don’t have a better alternative, and Promoters are your most loyal clients bringing the lion’s share of the profit.
Unlike customer satisfaction surveys, which capture data specific to the moment, NPS measures the overall loyalty and satisfaction of customers giving a broader picture of a company’s performance and is more reliable in calculating future revenues. Companies with higher NPS are known to grow faster, which means profit increases as well, so keeping track of the score will help project future revenues and decide on which business areas to focus.
To back up the statement, a study by the London School of Economics concluded that an NPS increase of 7 points correlates with a 1% boost in revenue, with a different source stating that NPS leaders grow 2 times more than their industry competitors.
In terms of NPS as a sales growth predictor, some researchers suggest that capturing NPS for all potential customers, not only the current ones, is worth looking at. Apart from being a good source of negative attitudes, former customers or non-customers are offering relevant information for both: LTV increase of existing customers and acquisition of new ones.
To understand the difference, one can take the customer journey which can be split into the pre-purchase, purchase and post-purchase stages. When measuring NPS during the pre-purchase stage, you are looking into brand awareness, the purchase stage looks into purchase intent and behavior, while during the post-purchase stage, the attention is on product usage and customer satisfaction.
This being said, NPS for existing customers would capture information only on the post-purchase stage as a measure of loyalty; while NPS for all potential customers captures aggregated data across all stages of the customer journey, measuring overall brand health. Hence measuring NPS for all potential customers is considered a more accurate predictor of sales growth.
8. Analyze data based on customer segmentation
NPS surveys make it very simple to segment your audience in order to tailor approaches and strategies. You can not perform a comprehensive analysis without drilling in to see what customers think. Originally, NPS segments customers into 3 categories: Promoters, Passives and Detractors. And while this distribution of scores already gives you an idea as to how to approach them, there is much more to it.
You may categorize audiences according to their purchasing patterns, product categories they mostly use, country, seniority or stage in their customer life cycle (for example set up a post-purchase and post-fulfillment NPS campaign). Measuring and monitoring NPS in the context of different variables allows you to identify which is the main cause of negative customer experiences to immediately address or what works best for specific groups – advantages you can build on.
This would allow you to surface invaluable data for marketing and sales, as well as focus on delivering a unique service experience relevant for each customer segment. NPS gives you a good indication of what’s in store, but it’s crucial for you to analyze the collected data from different perspectives to see the whole picture.
As it is all about customer experience, the provided feedback should be carefully analyzed to identify any struggles clients face and concentrate efforts on relevant aspects. If they complain about slow delivery in a specific geographic area, lack of support on a particular channel, correlate poor quality with a specific brand or abandoned carts with a glitch, you know exactly what you have to improve. Customers themselves will come up with suggestions on improving their experience, giving you additional insights into their needs.
As you can measure the attitude of customers towards your business at any step of the way, you will easily identify when things go smoothly or get a wrong turn, which will enable you to make prompt and relevant decisions.
9. Set up recurring NPS campaigns
While it is a common practice in the ecommerce industry to send transactional NPS surveys, meaning immediately or a couple of days after recently completed orders for insights into the sales process, setting up recurring campaigns, for example, every 6 or 9 months after the buy, will prove useful in understanding better customer satisfaction and behavior. After using your product for some time customers may have additional comments and insights, though the feedback may not always be positive, but useful nevertheless.
Customers may be excited after the purchase hence providing a higher score, but their opinion may change when they use your product for longer, and you would want to catch these shifts in satisfaction. Some issues may not stand out immediately, and if a customer has relevant feedback to provide, recurring NPS campaigns will offer the opportunity to share their experience. Though it might affect the overall score, their feedback will enable you to improve your product and avoid customer churn.
Naturally, it doesn’t mean that the NPS will decrease if you send recurring NPS campaigns, but in case it does, segment your customers based on the frequency and time of purchase to properly analyze the results and take appropriate steps to tackle any issues.
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. This should include a user-friendly site, a personalized shopping experience, a seamless check-out process, proactive customer services and continued commitment toward customer experience by implementing the received feedback.
Retently makes it easy to measure customer satisfaction and grow your ecommerce business. Survey customers and calculate your Net Promoter Score to stay ahead of the competition!