How Does Prioritizing Net Promoter Score and Customer Experience Drive Revenue?

Last Updated: December 16, 2021

Net Promoter Scores offer a glimpse into customer sentiment, satisfaction, and pain points. Marketers can use this data to deploy targeted campaigns and strategies, increasing profitability for every customer. In this article, we discuss:

  • Enlightening insights from Clearlink’s recent survey
  • Three tips to improve NPS and achieve higher profitability
  • How leading brands use Net Promoter Score data to rethink their campaigns
     

Marketers are eager to deliver the best possible customer experience (CX) in a bid to earn loyalty and establish a brand presence. But does better CX (reflected in a higher Net Promoter Score) directly translates into profitability? The answer is not so simple.

The most loyal customers may not be your biggest revenue generators. However, they help you cut down on new customer acquisition costs, positively impacting the bottom line. Also, this group is likely to recommend your product/services to friends, family, and acquaintances, expanding your market reach. Therefore, marketers have started to turn their attention to Net Promoter Scores. While it may not be a clear indication of revenue opportunities, Net Promoter Scores are useful for understanding your brand’s long-term sustainability, and what it could do better. Let’s consider this in greater detail.

Learn More: How to Successfully Measure Customer Satisfaction Using Sophisticated Yet Uncomplicated TechOpens a new window

What is a Net Promoter Score and What Does It Say About Your Brand?

A Net Promoter Score aims to capture how likely the customer is to promote your product or service to their immediate network. That’s why it is also known by alternative terminologies such as Likelihood to Recommend (LTR) scores.

Essentially, it calculates how strongly customers believe in the brand, its capabilities, and its commitment to positive customer experienceOpens a new window . Net Promoter Score surveys are often distributed immediately after the purchase experience – before the product consumption stage. This makes Net Promoter Scores more of an indicator of CX excellence, rather than product quality.

In a recent surveyOpens a new window , Clearlink looked at the possible correlation between Net Promoter Scores and profitability. The report revealed some interesting insights:

  • A one-point uptick in the score increases conversion rates by 3.9%. This means that even by incrementally improving your CX capabilities, you can boost the possibility of conversion.
  • A sale isn’t always due to a high Net Promoter Score. If a customer is impressed by the quality of experience, they are likely to become a brand advocate even if they don’t make another purchase.
  • By spending more time with customers, your executives can achieve a higher Net Promoter Score. In other words, pushing for a lower Average Handling Time (AHT) in contact centers may not always be a good idea.
     

While perhaps initially surprising to some, we discovered that there’s a definite correlation between NPS and average handle time—but it’s not what you might think. Calls with a higher average handle time led to higher NPS. Building a relationship with a customer takes time, and while everything in the sales world points to the need to always strive for a low AHT, our study reveals that there is definite value in spending the time and money to turn a customer into a promoter.

~ Adam Mergist, COO, Clearlink

So, how can you take these insights and convert them into action points for your marketing strategy? Here are three ideas that can help you link Net Promoter Scores to overall profitability, consistently driving bottom-line improvements.

3 Tips for a Better NPS and Revenue Enhancement

COO, Adam Mergist, recommends you “Avoid focusing on the sale alone as your end goal. Prioritize building a positive rapport with the customer and your business will reap the rewards of not only creating a brand promoter and earning a high NPS, but you’ll also land higher conversion rates while serving up the best customer experience possible.”

Leading brands across the world, such as British Gas Services and Airbnb recognize that Net Promoter Score is central to profitability. Here are three strategies you can leverage to gain from this correlation:

1. Intelligently articulate your Net Promoter Score questionnaire
 

The objective of the questionnaire is to categorize your customers as promoters, passive buyers, and detractors. Therefore, your questions should be well-articulated to capture customer sentiment. Instead of having multiple questions, checklists, and scoring options, it can be a smarter alternative to have a clear query and an objective viewpoint.

For example, “How likely are you to recommend >?” is a more effective articulation than “How strongly do you believe that > deserves your loyalty?”

2. Carefully optimize your Average Handling Time
 

Contact centers could push for a low AHT, believing that this allows executives to reach a wider audience in a short period. However, high volumes often come at the price of experience quality. Clearlink’s survey found that 90% of converted customers said that the “agent cared about me” – a connection that is difficult to establish in two-to-three minutes.

Segment your audience into specific categories and set a best-case AHT (negotiable) based on their unique desires, wants, and pain points. This technique will help you garner a high Net Promoter Score and even turn detractors into promoters – and by simply pushing NPS from 6 to 9 points, you can unlock a 21% increase in conversion possibility.

3. Convert every customer into a promoter
 

As Harvard Business Review put itOpens a new window , “The only path to profitable growth may lie in a company’s ability to get its loyal customers to become, in effect, its marketing department.” In today’s competitive business environment, acquiring, satisfying, and retaining large customer volumes can be extremely difficult.

By turning every happy customer into a promoter, you can achieve organic reach, word of mouth marketing, and low-investment business growth. All it takes is a steady commitment to superior CX and, of course, convenient referral channels. Let the customer easily find a way to digitally recommend your brand, track referrals, and reward any conversion that’s aided by a promoter.

Learn More:

Customer Service Vs Customer Experience (CX): Key Differences And SimilaritiesOpens a new window

Learning from the Best: Why Future-Focused Marketers Must Keep an Eye on Net Promoter Scores

Hospitality giant Airbnb is known for its data-driven marketing strategies, and this holds true for their Net Promoter Score program Opens a new window as well. Customers who rated it a 10 (on NPS) were 13% more likely to re-subscribe to Airbnb’s services in less than a year. This data could also be mined for customized marketing campaigns for a select, conversion-friendly user base. These customers were also 4% more likely to refer Airbnb within their network – this translates into 24,000 brand advocates readily available in the Airbnb database.

Given how closely NPS is linked to revenue generation, marketers must try and transform their CXOpens a new window for the highest possible score.

Not only will this increase per-customer profitability, but Net Promoter Scores also unravels valuable data on customer sentiment. Create targeted campaigns, rethink the product narrative to convert detractors, and offer new opportunities for referrals – with the right tools and strategies in place, the possibilities are endless.

We leave you with the words of Adam Mergist, “Even when one of your sales team members suspects their conversation won’t lead to a sale—if you can earn a high NPS, there’s certainly a possibility of future sales with each future customer interaction. Customer experience is everything.”

How have you leveraged Net Promoter Scores to improve profitability? Tell us about your experience on LinkedInOpens a new window , FacebookOpens a new window , or TwitterOpens a new window .

Chiradeep BasuMallick
Chiradeep BasuMallick

Contributor, Ziff Davis B2B

Chiradeep is a content marketing professional with 8 Years+ experience in corporate communications, marketing content, brand management, and advertising. Over the course of his tenure, he’s worked on several big-ticket projects, led and trained a variety of teams, and been instrumental in driving delivery quality, timeline adherence, and talent harvesting.
Take me to Community
Do you still have questions? Head over to the Spiceworks Community to find answers.