What impact do Promoters and Detractors have on your average client value?
27 Jan 2016
It is a fact that your average client value is made of clients who are very happy about you, and clients who aren’t. The economic outcome of these two groups differ very much. Below a summary that shows what the differences are between Promotors and Detractors/Criticasters and what the consequences are for your company.
No idea what Promotors and Detractors/Criticasters are? Then read my blog How do I calculate my Net Promotor Score?
Differences Promotors and Detractors:
Promotors are a fan of your company and have a perception of high quality. This makes them less aware of prices. They are less critical about details, unlike the Detractors. Detractors are much more focused on prices. Do you want to gain insights in the differences between these two groups? Try comparing the purchases of these groups (for example of the last 6 months).
Cost efficiency / Service costs
Detractors have a larger impact on your Service department; They complain a lot more. Detractors often appear to be defaulters too. Promotors give you more efficiency marketing/sales wise, because they contribute in recruiting new customers through positive word-of-mouth. Do you want to see the difference between Promotors and Detractors? Then check out the number of Service requests or complaints of the two groups.
Budgets per year
Promoters have a higher spending pattern per year. When someone is very enthusiastic about you, there is a higher chance they will repeat purchasing something. Also cross- and upsell possibilities are more effective with Promotors.\ Detractors will show that there are less repeat purchases. This makes the spending pattern of Detractors less interesting.
Promoters are billboards for your company; they will spread positive word-of-mouth about your brand. They recommend you to others. If you want to know how many new clients found out about your company through Promotors, you can only ask them. It’s good to find out from your newest clients whether they became clients through your reputation or if they were recommended by another client. These clients often appear to become Promotors as well and therefor will bring in new clients too. It can create a continuous effect of new clients. Detractors will make the opposite happen. They talk negative about you and research shows that every negative story of a Detractor will need 5 to 10 positive stories from a Promotor to balance back.
Gain insights in your clients through customer satisfaction research
Through customer satisfaction research it’s possible to gain insights in how your clients are built up. As shown above, Detractors clearly have a negative impact on your financial achievements. Therefor, make sure you quickly identify these clients and take action on their negative feelings. Possible actions on these clients can be:
Improvements that will increase your customer satisfaction
Find out through research what the reason is for a complaint and/or low NPS score, and solve this issue. After solving the issue, make sure you give the client feedback on this and explain that his/her complaint is resolved. Every complaint gives you the opportunity to create a Promoter. When you handle a complaint fast and better than expected, this can change a Detractor into a Promoter.
Say goodbye when needed
This might sound hard, but sometimes there just isn’t ‘a good match’. Your products or services sometimes just don’t fit a customer. You both end up disappointed. If this is the situation, it’s better to let each other go.
Launch a new product or service that matches
The fact that you have a lot of Detractors can also be a good moment to launch a new product or service that fits their expectations. Apparently there was a mismatch. Find out the group’s expectations and see if you can meet these expectations in another way.
</span>Below you will find a schematic illustration that shows the impact of Promotors and Detractors on your average client value.
Do you want to know how many Promoters and Detractors you have in your customer portfolio?\ Via our free trial demo we offer you 30 days of testing with Starred. You have the possibility to send surveys within these 30 days, to gain insights in your own customer file.