CX Blog Series: Building Customer Loyalty in the New Year

As we begin to close in on the end of the year, improving the customer experience continues to be a major storyline for leading brands. With today’s consumers demanding a more seamless experience from brands across a wide variety of channels, it can be easy to overlook one of the most important contributors to an effective customer experience: building customer loyalty.

Creating long term transactional, and even emotional, loyalty amongst customers is the bedrock of any successful customer experience program. One method of quickly and simply evaluating the loyalty of your customer base is by utilizing the Net Promoter Score (NPS). Studies have shown that NPS is a good indicator of a company’s future growth as companies with high and improving NPS outperform their competition year-over-year. 

The correlation between NPS and growth is even more significant for mature businesses in highly competitive markets, such as the retail industry. As competition continues to increase, the need to provide your customers with additional value is critically important to maintaining and growing market share.

With its simplicity, it is easy to understand by the business and, most importantly, your customers. Because of this, the initial results of starting an NPS program build on their initial results by being readily adopted by the business as more customers begin to respond, giving you more in-depth insights and actionable intelligence.


Breaking down NPS

By implementing NPS, you provide your business with a much-needed baseline metric to measure your success and, critically, help determine whether your customers are feeling better or worse about your brand over time. Simply understanding which customers require additional attention to turn their opinion of your company around can pay big dividends in a competitive market. As customers continue to become more empowered than ever to share their opinions, both positive and negative, it has never been more important to ensure you are giving them something positive to say.

Without getting too technical, NPS measures the likelihood a customer will recommend your company, products or services to a friend, family or colleague. NPS is easy to implement, quick to execute and inexpensive for tracking the performance of your customer experience efforts.

The reason NPS was created is twofold.

  1. Customer satisfaction and loyalty correlate strongly with sales
  2. The likelihood of referring a brand to friends and family correlates strongly with customer satisfaction and loyalty.

 This one, simple metric speaks volumes about the current state of your company and its potential to grow in an increasingly competitive marketplace. NPS gives your entire organization a simple metric to improve customer experience and future revenue and sales growth.


Free Marketing?

At the core of NPS is the belief that enthusiastic customers are more willing to recommend your business to a friend or colleague. This group, known as Promoters in NPS, is responsible for creating the most powerful and effective form of marketing today: word of mouth. Recommendations from family, friends and colleagues are considered to be more trustworthy than all other forms of advertising according to a study by Nielson.

This concept takes on added importance when you take into account the variety of outlets that consumers have to express themselves. Before social media, an experience was potentially shared only with those in close contact to a consumer. Today, a simple post containing either negative or positive feedback can go viral and be shared with millions of potential consumers. For brands both large and small, the amount of free marketing that can be generated by these enthusiastic customers is mind boggling. Not only is this type of marketing trusted more than any other, it is created and distributed by your customers 24/7.


Measuring NPS

Measuring NPS starts with a simple question: “How likely are you to recommend us to a friend?” Frequently. this question is asked immediately after a customer completes a purchase or contacts customer support. Going back to the simplicity that we mentioned earlier, all that is needed to conduct this survey is a simple questionnaire and some inexpensive survey software. If you don’t already have the technology to deliver surveys, there are plenty of inexpensive options available such as SurveyMonkey.

The most common scale for the survey is 0-10, however, the 1-7 scale is becoming increasingly popular as people are less inclined to pick a random number on this scale. Having fewer options is less overwhelming than the traditional 0-10 scale and the unfamiliarity with the seven-point scale tends to produce more accurate results.

Finally, after you have determined your survey platform and the most appropriate scale, you can begin to calculate your NPS. NPS is simply the percentage of promoters minus the percentage of detractors, meaning that scores can range from -100 (when everyone is a detractor) to +100 (when everyone is a promoter). Given this range, it is generally considered that any score greater than 0 is good, and a score of 50 is excellent.



While Net Promoter Score is not a perfect measurement it does have many advantages, including being inexpensive, quick to deploy, and easy to understand. These factors, combined with the close correlation to sales and growth, give you an invaluable metric everyone can understand and rally behind while you continue to build out the rest of your customer experience optimization.

Establishing a complete view of the customer journey for your brand is a common struggle for business leaders, even for leading brands. Tying together the disparate datasets created by consumers utilizing a wide variety of channels can make it difficult for even the most advanced organizations to evaluate their customer data in a way that drives insights. Our groundbreaking, new Visitor Stitching methodology enables brands to do just this. By stitching together your existing datasets, we help build a more complete image of your customer profile, allowing you to more accurately assess your customer experience in real-time.


Learn more about Customer Experience and Visitor Stitching by watching our latest webinars:
Marketing in the Moment: Moving Beyond Conversion Optimization to Achieve Digital Experience Transformation
2018 Digital Trends - How to Unite Teams, Data and Analytics for Future Success





By John Butler
About the Author:

John Butler is a Customer Experience Team Lead at Stratigent.

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