Recently, we looked to help strengthen a client’s new business growth by encouraging recommendations from existing customers to prospective, new customers.
To do that, we first measured past recommendation practice to see how many customers had recommended the business or its products[1]. We found that 24% of all customers had recommended the company in the last year.
We looked to the personal characteristics of people who said they had recommended the company and saw that they matched the customer profile in terms of gender, age, home ownership status, and occupation. There were indications that couples were less likely to have recommended the company than customers generally. And there were indications that people who were in their fifties, or who had children living at home, or were more affluent were a little more likely to have recommended the company in the previous year.
We then asked participants their intention to recommend in the next year, using the 11-point Net Promoter Score (NPS) scale[2]. From their answers, we saw that 18% were classified as Promoters, and 21% were described as Passives, according to the NPS.
But as intention to recommend could be like intention to go on a diet – the intentions are good, but the practice a little nebulous, we reviewed those who had recommended by their intention to recommend.
As the graph shows, we found that people who had recommended in the last year were markedly more likely to intend to recommend the company in the next year.
And that while the Passives were so named in the NPS categories, that descriptor downplays their actual practice as recommenders of the company.
Now knowing its customers’ recommendation practices and intentions, the company was able to promote recommendation messages to those who were, in NPS terms, Promoters and Passives, and so seek to strengthen its new business.
Its next strategy was to identify why a group of customers were NPS Detractors and so why, as Detractors, so few had recommended the company, and then to seek to turn this group into at least Passives in mindset and eventually as recommenders in practice.
If you feel that your business can strengthen its new business growth from recommendations from your existing customers, and from identifying why some are Detractors and what you need to do to have them change their mindsets to become at least NPS Passives, please call or email Philip Derham:
derhamp@derhamresearch.com.au
(+61) 0414 543 765
[1] By asking “In the last year, have you suggested to a friend, family member, work colleague or anyone else that they check out any of (the company’s) products or services?”
[2] “In the next year, how likely are you to recommend to a friend, family member, work colleague or anyone else that they check out (the company) in general?”