{"id":1668,"date":"2009-06-29T00:00:00","date_gmt":"2009-06-29T00:00:00","guid":{"rendered":"http:\/\/bp.rajeshkurikayar.co.uk\/?page_id=1668"},"modified":"2019-12-02T10:05:02","modified_gmt":"2019-12-02T15:05:02","slug":"promoter-or-detractor-why-you-need-know-answer-question","status":"publish","type":"post","link":"https:\/\/beyondphilosophy.com\/promoter-or-detractor-why-you-need-know-answer-question\/","title":{"rendered":"Promoter or Detractor? Why you need to know the answer to this question"},"content":{"rendered":"

Understanding your customer and retaining them as a loyal customer<\/a> is even more critical in an economic downturn. Studies indicate it costs two to four times more to acquire a new customer than the annual cost of keeping an existing customer. Therefore it\u2019s worth the small investment to determine if your customer is:<\/p>\n

– A Promoter \u2013 can be your best advocate and can influence many other potential customers to come your way.
\n– A Detractor \u2013 can be your worst critic and can influence many other current and potential customers away from your company.
\n– A Passive \u2013 can be your biggest uncertainty and may influence other current and potential customers away from your company.<\/p>\n

How do you find out? Ask Your Customer.<\/strong><\/h2>\n

\u201cHow likely are you to recommend our company to a friend or colleague?\u201d What is derived from this question is a numeric 0-10 score. Promoters answer a 10 or 9 (Highly Likely). Passives answer an 8 or 7 (Likely). Anything below a 6 is a Detractor. A Net Promoter Score\u00ae (NPS\u00ae*)<\/a> is calculated by taking the % of Promoters and subtracting the % of Detractors,<\/p>\n

Customers with a great experience can promote your company to others.<\/strong><\/h2>\n

We all love the customers who are our raving fans. When working with our clients, we help them determine a plan to effectively leverage their Promoters. By leveraging I mean making it easier for Promoters to refer your company to others.<\/p>\n

Think about your Promoters as a consequential sales channel: a referral from a loyal customer (Promoter) has a 92% retention rate versus 68% for a customer acquired from advertising (source: Bill Bleuel, PhD, Graziadio Business Report).<\/p>\n

Effectively leveraging Promoters may bolster the loyalty of the new customers they bring to your company and reduce your cost of acquiring new customers. If you\u2019re intent on reducing costs, harnessing the power of your Promoters should be a focal point.<\/p>\n

Customers with a bad experience can detract others from your company<\/strong>.<\/h2>\n

\u201cThe sting of a bad experience can cut so deep that it transforms an upset customer into an activist no longer interested in just a refund.\u201d Source: Business Week<\/a> concluded that in 2007 consumers became empowered.<\/p>\n

Disgruntled consumers discovered a plethora of communication channels to voice their discontent. These channels are exploited to dissuade others from doing business with companies that provided poor service.<\/p>\n

Poor service only? As we\u2019ve mentioned in earlier articles, think more broadly about why customers become discontented and downright angry. It isn\u2019t just due to poor customer service. Customers are looking for (and expecting) companies to deliver an \u201cexperience\u201d. An experience encompasses the \u201cphysical\u201d realm<\/a> \u2013 the product and services provided \u2013 and the customer\u2019s \u201cemotional\u201d wishes, wants, and needs.<\/p>\n

Historically, a person with a positive customer experience<\/a> would tell 3 people; a person with a bad customer experience would tell 10 people. However, newer estimates are that a defecting customer will tell between 10 to 20 people about their negative experience.<\/p>\n

Consider how empowered your customers are now with the limitless reach of technologies. A recent example mentioned in the article \u201cVirtual Water Cooler\u201d by Michael Axelsen, conveys how a person with a bad customer experience Twittered 789 followers about her experience while still in the store. That conversation now shows up in internet searches. That negative experience<\/a> is picked up, conveyed, and recorded for posterity.<\/p>\n

Let\u2019s face it: Detractors who are vocal get our attention. Most companies spend over 95% of their effort on reacting to problems and less than 5% proactively preventing problems If you\u2019re concentrating only on reacting to what your Detractors are complaining about, well you are intrinsically only plugging the most obvious leaks in the dike. And you miss the critical opportunity to identify where the next big leaks are likely to occur.<\/p>\n

Here are some sobering statistics:<\/h2>\n

– \u201cEach year the average company will lose 10-15% of their customer base.\u201d
\n– \u201c84% of customers who leave do so because of bad service.\u201d
\n– \u201cA typical business only hears from 4% of its dissatisfied customers \u2013 the other 96% leave, 91% for good.\u201d
\n(Source: Allegiance Newsletter: Bain & Company, Forum Corp., Jim Barnes, \u201cSecrets of CRM\u201d.)<\/p>\n

When emotions are strong, either positive or negative, you have an opportunity to make a lasting positive impact on your customer, by:
\n1) Understanding the customer\u2019s issue, and
\n2) Fixing the issue to their satisfaction.<\/p>\n

You can shift Detractors to highly engaged Promoters. In some cases, just listening to the Detractor\u2019s complaint and showing empathy is enough to shift them.<\/p>\n

Customers who don\u2019t feel engaged can be passive about your company.<\/strong><\/h2>\n

Don\u2019t make the mistake of discounting your customers who don\u2019t fall in Promoter or Detractor categories. Customers with a non-experience, Passives, can be just as harmful to your company as those with strong like or dislike emotions. How so? This group poses, in many cases, a more challenging dilemma than Promoters and Detractors \u2013 how to gauge their needs and expectations, and how to engage them.<\/p>\n

In general, the action plan to shift Passives to Promoters requires more probing dialog and inspired relationship planning. Although we can\u2019t statistically prove this, we generally find Passives are looking for an experience but less able, or inclined, to voice their expectations. They are indifferent and therefore not interested in helping the company improve. And they are much more likely to say they are satisfied but defect, never to return.<\/p>\n

What is a Cu$tomer Worth?<\/strong><\/h2>\n

How many people are they likely to either encourage or discourage from doing business with you? What\u2019s that worth?
\n– \u201cEvery customer you keep represents at least three that you don\u2019t have to attract.\u201d
\n– \u201cA 5% improvement in retention rates can raise profits from 15 percent to 50 percent.\u201d
\n(Source: Bill Bleuel, PhD., Graziadio Business Report.)<\/p>\n

If you know who your Promoters are and how many new customers they may attract to your business, their net worth will increase significantly.<\/p>\n

It\u2019s a small investment with huge payoffs.<\/strong><\/h2>\n

Ascertain who your Promoters, Passives, and Detractors are and, most importantly, take the appropriate action. What action? If you want to be successful retaining existing, and reducing the costs of acquiring new, customers you need to be deliberate and creative in leveraging your Promoters and shifting your Passives and Detractors to Promoters.<\/p>\n

Sue Morgan
\nPrincipal
\nBeyond Philosophy<\/p>\n

By Colin Shaw | Published: June 29, 2009<\/p>\n","protected":false},"excerpt":{"rendered":"

Understanding your customer and retaining them as a loyal customer is even more critical in an economic downturn. Studies indicate it costs two to four times more to acquire a new customer than the annual cost of keeping an existing customer. Therefore it\u2019s worth the small investment to determine if your customer is: – A […]<\/p>\n","protected":false},"author":12,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[83],"tags":[],"class_list":["post-1668","post","type-post","status-publish","format-standard","hentry","category-customer-experience-1"],"_links":{"self":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/1668","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/users\/12"}],"replies":[{"embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/comments?post=1668"}],"version-history":[{"count":0,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/posts\/1668\/revisions"}],"wp:attachment":[{"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/media?parent=1668"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/categories?post=1668"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/beyondphilosophy.com\/wp-json\/wp\/v2\/tags?post=1668"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}