Lee The SME Owner - Pt. 14
What Do Our Customers Think Of Us?
As Lee’s excitement over the new possibilities bubbled over, John knew that they needed to balance the big plans with careful thought and practical steps to make those ambitions a reality. One key area to focus on was the customer base—understanding how loyal they were, what they thought of the service, and how much more business Lee’s company could get from them.
To get a clear picture, John recommended starting with an NPS process, which stands for Net Promoter Score.
“Alright, Lee,” John explained, “NPS is a simple but powerful way to measure how satisfied your customers are and how loyal they feel to your business. It’s a straightforward tool that helps us figure out how likely your customers are to recommend your business to others. It gives us a really clear sense of where you stand with them.”
Lee raised an eyebrow, intrigued but a little unsure. “How does it work, then?”
John smiled, grabbing the marker and starting to explain. “It’s simple. You ask your customers one key question: ‘On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?’ Based on their answers, they get divided into three groups.”
John sketched out a quick diagram.
Promoters (9–10): “These are your loyal customers. They love your service, they’re repeat buyers, and they’re likely to recommend you to others. They’re the ones you want to grow more of—they’re your biggest supporters.”
Passives (7–8): “These customers are satisfied, but they’re not enthusiastic. They like what you do, but they’re not going to go out of their way to recommend you. They’re a bit at risk of switching to a competitor if something better comes along.”
Detractors (0–6): “These are customers who aren’t happy. They might be putting up with your service because they don’t see a better option, or they could actively dislike it. They’re the most likely to complain or switch to a competitor.”
Lee nodded, following along. “So, we get these scores from our customers and then what?”
“Well,” John continued, “once you’ve gathered the responses, you calculate your NPS by subtracting the percentage of Detractors from the percentage of Promoters. Passives don’t count in the score, but they’re still important because they can be influenced to become Promoters or risk turning into Detractors.”
John wrote the formula on the board: NPS = % Promoters – % Detractors
“The score can range from -100 to +100,” John said. “A positive score means you have more Promoters than Detractors, which is a good sign. A higher score shows you have a really loyal customer base, while a lower score means there’s work to be done.”
Lee rubbed his chin thoughtfully. “So, the NPS gives us a clear sense of how our customers feel about us, but then what? What do we do with that information?”
“Good question,” John replied. “Once we know the score, we can dive deeper. We can ask follow-up questions to understand why customers gave the score they did. Are there specific areas they love? Any frustrations they’re dealing with? This helps you improve the service where needed and lean into the areas where you're already excelling.”
John continued, “The real power of NPS is that it gives you actionable feedback. If your Promoters are high, great! You want to keep them happy and even get more business from them. If you’ve got a lot of Passives or Detractors, you need to figure out what’s not working and fix it. It’s about identifying how much of your customers’ loyalty you’ve earned and how much more you could get if you address their concerns.”
Lee nodded. “I see. So, we’re not just measuring loyalty; we’re figuring out how to keep it and grow it.”
“Exactly,” John said. “NPS gives us a real, concrete starting point to work from. Once we know how loyal your customers are and what they’re thinking, we can start tailoring your strategies—whether it’s selling them more of what you already make, improving the service, or offering something new.”
Lee sat back, his eyes sparkling again. “Alright, I’m sold. Let’s get started on this NPS thing.”
John grinned. “That’s the spirit! It’s not as flashy as the new product ideas, but trust me, it’s just as important.”