Companies often invest more time and money in winning a new customer than in retaining existing customers. Yet retaining customers is often much more efficient. Measuring customer loyalty and measuring the effects of your follow-up actions on customer satisfaction makes this possible. It gives you greater control over their customer experience (CX) and improves your business results.
Why put so much effort into winning a new customer when retaining existing customers is much more effective? A long-standing marketing rule tells us that retaining existing customers is five to seven times more effective than acquiring new ones. Especially if customers get what they need from you. According to recent studies, that old rule is still relevant today. And the great thing is that we now have much more technology to measure each customer's needs and satisfaction and to take targeted action. The logical advice: start measuring customer loyalty to ensure greater customer satisfaction.
Why is customer retention so valuable?
Aside from the lower effort and investment required to retain an existing customer, your current customers also form the backbone of your business. They provide stability. Retaining these customers safeguards that stability and enables you to make new plans and investments for further expansion (with both existing and new customers). Losing a major customer, on the other hand, can have an immediate impact on your existing business and activities. And something that is not immediately apparent from a customer's revenue figures: existing customers are more willing to share their network with you, enter into a partnership or share their experiences as a customer with others. In our online world, this is increasingly important.
Measuring customer loyalty with NPS (Net Promotor Score)
Modern measurement methods – such as GrowPromoter's online platform – make it possible to measure customer loyalty quickly, easily and continuously. The Net Promotor Score (NPS) is a simple and powerful tool for this purpose. A familiar NPS question is: How likely are you to recommend our company to people you know? The resulting score is useful for measuring customer loyalty, but be sure to look beyond it as well. It is often possible to gain much deeper insight into customer loyalty within two minutes, using a total of four smart (follow-up) questions. Why is someone enthusiastic, or why are they not? Why does someone rate your service a 6,5 rather than a 9 or 10? That is what we want to know! And by taking targeted action and continuing to measure the effects at the right times, you can keep increasing customer loyalty and satisfaction. And with them, your own results.
