In 2003, Fredrick Reichheld introduced the concept of a Net Promoter Score (NPS) in his Harvard Business Review article titled, The One Number You Need to Grow. The concept while simple is quite revolutionary. By asking one question, “How likely is it that you would recommend our company to a friend or colleague?” Organizations can get insight into their customers and rank them as Promoters, Passives or Detractors.
Those customers who ranked as a 9 or 10 were given the designation of “Promoters,”meaning they had the highest rate of referral and additional spend with the vendor. Those customers who ranked as a 7 or 8 were labeled “Passives”, meaning they were passively satisfied or rather indifferent when it came to brand loyalty and those in the 0-6 range were ranked as “Detractors,”meaning these were customers who were dissatisfied and posed the biggest threat to the brand.
Identifying Promoters and Detractors
While NPS is widely used as a way to determine customer loyalty, many companies who use NPS focus on the two opposite ends of the spectrum, that being the Promoters or the Detractors. The focus on the Promoters is keeping them satisfied and looking into how organizations can move more of their customers to this stage. The focus on the Detractors is simply understanding what needs to be done to move them from being dissatisfied customers to happy customers.
While focusing primarily on these two groups would seem to make sense as they are so well defined, it is the unknown Passives that may end up being the biggest challenge for companies.
The Challenge of Passive Customers
When someone has a great affinity for brand it is easy to identify. Conversely, when there is dissatisfaction for a brand, it is also easily recognizable. However, when customers are indifferent to your brand there are rarely recognizable signals that an organization is able to react to. Not having this insight makes it exceedingly challenging for brands to retain their customers and also expand their share of wallet with that account and there is a high risk of them leaving without so much of a word.
Understanding why your customers have such an indifference to your brand can be as valuable as understanding why a certain percentage of your customers are detractors. It has been said that the opposite of love is not hate, but indifference. Hate and love are both emotions, indifference is a lack of emotion and when applied to customer experience it creates ambiguity.
When it comes to identifying our customers as Promoters, Passives or Detractors, do not lose sight of engaging with the Passives, it may be more difficult, but if there is no brand affinity, they could be just as likely to leave as a Detractor is.