The Net Promoter Score (NPS) is an index ranging from -100 to 100 that measures the willingness of customers to recommend a company’s products or services to others. While businesses primarily focus on Promoters and Detractors, they’re missing out on a considerable and influential part of their audience: the Passives.
In 2020, the NPS has become the metric of choice for many companies. It can be used to measure multiple areas, from customer satisfaction to employee satisfaction, and to learn what customers like and don’t like. BARE International’s Melanie Cihak, Director of Client Services, further explains:
With fluctuating trends in the marketplace and the ease of purchasing, customers truly are able to decide where they want to spend their money. With a proper NPS rating, BARE International helps clients identify whether a product, service or team member is helping to Promote their business, or leading to a Detraction; what is (or is not) bringing in value. In one way, this can be achieved simply by asking if a customer would recommend not just any business, but your business, your location, your employee.
To make the most of your data, a good NPS program pays attention to Passives as they are equally important and critical to your firm’s success just like Promoters and Detractors. To explain further, let’s go back to basics…
DEFINING THE NET PROMOTER SCORE
A Net Promoter Score, or NPS, measures customer experience and predicts business growth. This proven metric transformed the business world and now provides the core measurement for customer experience management programs across the globe.
To improve your firm’s NPS you need to focus on Detractors, but at the same time, you should not ignore the Passives: The NPS formula is simple: “the percentage of Promoters” – “the percentage of Detractors”. As you can see below, the NPS formula doesn’t include Passives in the equation:
As you can see on its surface, the NPS is very simple. However, if you peel it back a little, you’ll see how easy it is to analyze the data and understand how Passives go into the NPS.
CHARACTERISTICS OF THE PASSIVE CUSTOMER
Passives are people that rate their likelihood of recommending your product, service or company as a 7-8 out of 10 (they might like it, but not quite enough to recommend it to anyone). Most often when businesses are considering their NPS and how to shift it, they fail to consider the middle users at all, choosing to focus on unhappy Detractors as the main target for their efforts.
However, NPS Passives are equally critical and important to the success of your company: For growth-focused marketers that make use of Net Promoter Score, reach out to a Passive with the right approach and you could convert them into an enthusiastic Promoter; use the wrong approach and they could turn into a Detractor.
THE HISTORICAL “PROBLEM” WITH PASSIVES
Usually, Passives are the less happy customers who aren’t committed to buying from you, have shorter buying history and don’t engage with you often. The secret to winning their trust can be in keeping your company top-of-mind, making them spend more time with you or check out more features/functionalities of your products/services. There are many other reasons why ignoring the Passives may be doing more harm than good:
- Passives aren’t passionate about your brand: Detractors have strong feelings about your company and do not hesitate to voice it. On the contrary, Passives don’t care about your product or brand.
- Passives are cost conscious: Passives are sensitive to price and they think the cost is a big factor because they don’t see much difference between your business and others. Therefore, you should get more information from churn-risk Passives about whether they are getting value for money from your product. Do they think it is worth the price?
- Passives tend to jump ship: US businesses lose about $137 billion a year because of avoidable customer switching. More than Detractors, Passive customers will be more likely to go to your competitors. In an HBR study, 20% of passives indicated they were willing to leave compared to 28% of Detractors that they were interested in staying. Further, Passives will easily move to a competitor brand if they offer a slightly better product or price.
By concentrating on the passives, you can save a good amount of money and obtain a few Promoters too. It’s time to change that and give your Passives the TLC that they deserve.
TURNING PASSIVES INTO PROMOTERS
What is preventing Passives from becoming YOUR Promoters? It’s actually much easier to convert Passives into Advocates than Detractors. Here’s some suggestions how:
- Ask for feedback: Ask Passives how you can earn their business. For example, a full-service hotel might find that a common complaint among Passives is that the gym equipment needs updating. Often, all it takes is a short email with one to two questions to successfully reach out to a Passive customer and start the process of converting them into a loyal, valuable Promoter.
- Take action: Actions do speak louder than words. So fix what is keeping you from earning Passives’ recommendations. Put new equipment in the fitness center. Improve service in your restaurant. Or offer free 24/7 support for customers who need help installing your product. Better yet, if a Passive knows you added a specific feature or changed a specific aspect of your product based on their feedback, it creates a personal connection that separates your product or service from the competition.
- Humanize and track results: The overall customer experience is no doubt important, but it’s the human connection that turns sticky. 86% of customers would continue doing business with a company if an emotional connection with a customer service agent was in place. It’s about how you make your Passives feel that will really count. After you’ve made improvements based on their individual feedback, go back to Passives and ask the “likely to recommend” question again with the same Passives to see if they are now likely to recommend.
NPS RATING WITH BARE INTERNATIONAL
While analyzing your NPS, BARE understands it’s tempting to focus on your Detractors (they’re enthusiastic, passionate and opinionated) but your passives are slowly slipping across to your competition, and bringing their friends with them. Which is why it’s imperative get the opportunity to find out what your customers really think about your brand and identify opportunities to develop and grow your business.
Through our methodical approach to data collection and our in-depth reporting suite, we’re able to gain additional insight into how to move business forward. We can provide answers to, “What’s helping my business succeed? Where are my areas of opportunity? Why is customer traffic low / high?” Many factors can be uncovered when we’re “revealing the true nature of business.”
Diving deep into data is what we do best. If you’d like to learn more on how to make the most of your NPS data – including your Passive audience – contact the customer experience research experts at BARE International here today.