How to measure customer loyalty
The Customer Loyalty Index or Net Promoter Score (NPS) is a measure of customer commitment to a product or company. It is also known as the index of willingness to recommend a product. The metric shows the percentage of customers who are willing to recommend your product.
Ask your customers if they would recommend you on a ten-point scale. The classic scoring system in an NPS survey:
- 0 to 6 - critics. They leave angry reviews about you, and if they haven't found a replacement for you yet, they will soon.
- 7 to 8 - Neutral. They're fine with you, but as soon as they see someone better, they'll be happy to leave.
- 9 to 10 - Promoters of your brand or product. Your long-term customers, the "freelance marketers" of your business. It's easier to get in touch with them, they often leave positive feedback and are responsible for word of mouth.
Analyse which customers have given you what kind of feedback. To calculate the NPS, determine the proportion of those who gave 9 and 10 points. Subtract from this the proportion of those who gave a score of 6 or less. This is your NPS. The number may vary depending on the niche. In some niches 50% is considered normal, in others 80%, in others 30%. It is worth focusing on 80% as a benchmark.
Once you have calculated the loyalty index, ask the customer one question: what do we need to do to get 10 points next time? The first thing to do is to listen to the answers of those who gave 7-8 points. It is easier to move them into the category of more loyal customers (promoters). Listen to your customers' comments, advise the experts at PAnDiKubiz. No matter how strange they may seem, if a large number of people have the same opinion, take it into account.