Customer Engagement and Net Promoter Score (NPS) Explained

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by: M. Cusack
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Word Count: 544
Date: Thu, 28 Apr 2011 Time: 4:04 PM
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Mystery shopping has long been the method for Australian companies to measure the operational standards that make up their brand promise ensuring they are being constantly delivered at every customer touch point. Many businesses find this to be an efficient and easy way to find out more about their employees on the job - giving them insights in to how their company rates on the customer experience.

More recently companies are extending their customer experience measurement programs by adding voice of the customer and customer engagement programs aimed at identifying what real customers think of their brand.

While mystery shopping assists with the process of understanding your customer experience from hired shoppers paid to try out products and deal with staff, customer engagement programs, such as voice of the customer, help to provide feedback and opinions from customers who are reflective of your customer demographic. With the customer engagement method the business seeks out and receives the feedback and opinions of real customers on a wide range of issues. Since many of these people may be regular customers, their opinions add to the valuable information you collect from mystery shopper sent in and paid to find out specifics of the customer experience you wish to investigate.

An added benefit to a customer engagement program is that the voice of customer is heard. It is empowering and encouraging for a customer to feel they are heard and have the opportunity to give feedback on their customer experience. They often feel more valued after they have given their opinion and are even more signed on to your brand when they see their changes first hand. When you listen to the voice of the customer, you are making changes to your business plan based on market demands. If one customer thinks positively or negatively about something, there's a good chance many other customers of yours feel the same way.

One way companies who specialise in customer engagement go about evaluating the customer experience is with a system known as the Net Promoter Score (NPS). Developed by Fred Reichheld, Bain & Company, and Satmetrix, a Net Promoter Score can tell you how loyal your customers are to you.

In calculating your NPS or Net Promoter Score, questions are posed to your customers, such as, "How likely are you to recommend XYZ Company to a family or friend?" These questions are answered on a 0 to 10 scale, with 10 being "extremely likely" and 0 "not at all likely" and customers categorized as Promoters, Passives or Detractors. Customers are considered;

- ‘Promoters' if their score is a 9-10 rating
- ‘Passives' if their ratings are a 7-8
- ‘Detractors' if it's between 0-6.

The percentage of Detractors is subtracted from the percentage of Promoters, resulting in your Net Promoter Score or NPS. If everyone is a Detractor, your score is -100 and if everyone is a Promoter, your score is +100.
With customer experience tools like the Net Promoter Score (NPS) you can be on your way to improving your business model and the customer service your employees provide. Hearing the voice of your customer via customer engagement in collaboration with your Mystery Shopping program puts you in the best possible position to make decisions that positively affect the growth and profit of your business.

About the Author

The Realise Group is one of Australia's top mystery shopping companies. With the knowledge and experience that can help boost your customer experience through methods that will improve not just the customer service of your staff but the entire consumer experience and engagement with your store.