Benchmarking CX
So, we’ve seen why customer feedback is important to so many businesses and how it fits into their organizations. Knowing this, you can benchmark your own information to learn how you relate to leading brands. Judging ourselves can be difficult sometimes, but data doesn’t lie or pull any punches. Benchmarking will give you realistic, actionable goals to improve your standing in your industry.
Know your Strengths and Weaknesses
Taking a look at your peers will reveal the ways in which you’re excelling and can provide insight on how to stay ahead. It will also show you where you’re coming up short of the average. Defining both of these areas through an objective lens will make it easier to establish a new direction and let go of any practices that may have been detrimental.
Learn from the Best
If Tiger Woods offered you some pointers on your short game, you’d probably take them. Right? Emulating the best in the business certainly wouldn’t hurt. Taking a look at what industry leaders are doing might help clear up some roadblocks you’re hitting when it comes to innovation.
Win New Business
Better practices translate to a better bottom line. We can all agree on that. But knowing where you stand in your industry goes so much further. Think of it as a sort of scoreboard that motivates your team and unites them in achieving a common, tangible goal.
It’s clear that customer feedback is a major driver of growth and highly influential when it comes to business decisions and improving experience. So, why is it that almost half of businesses report having no formal CX strategy? For those who don’t, they should. For those who do, NPS is the most highly adopted and ranked strategy. If you’re unfamiliar with NPS, let’s quickly review the basics you’ll need to know in order to get value out of this section.
As we’ve seen, NPS is used by 89% of companies with a real strategy in place. Why is it so common? Because, like benchmarks, NPS is an excellent way to quantify key aspects of your business. You wouldn’t be reading this report if you didn’t value metrics and CX, and NPS marries the two perfectly.
So many companies are using NPS because it simplifies the question of how to understand how your customers are feeling. The time-tested method has proven its worth across a multitude of industries. Since its introduction in 2003, NPS has become the gold standard for measuring customer loyalty. Similar to the results of our study, more than two-thirds of the Fortune 1000 use the system as a KPI. They all see the value in setting clear, numeric goals tied to customer feedback and what it leads to:
It’s as simple to calculate your own NPS as it is for your customers to respond to the question: “On a scale of 0-10, how likely are you to recommend our business to a friend or colleague?”
Respondents to this question are grouped into three groups that share a distinct set of characteristics and behaviors.
Your brand’s NPS is then derived from this simple formula:
NPS = % Promoters – % Detractors
The score can range from a low of -100 (if every customer is a Detractor) to a high of 100 (if every customer is a Promoter).
Calculating your score will help you set goals and track your progress, but it can be difficult to assess how good your score is without context. That’s where this benchmark comes in. A “good” NPS score is totally relative to industry and sector. An exemplary score for one business might be a poor score for another. It’s important to gauge yourself against your peers to get a good idea of where you stand.
While NPS is used in every imaginable industry, not every score is created equal. Just like you don’t have the same relationship with your barber as you do your auto mechanic, NPS advocates like Apple and Orangetheory Fitness have very different relationships with their customers. A good score in one industry does not necessarily translate to another.
That’s where a benchmark comes into play. You need to get an idea of how your peers in your space are doing. We’ve broken down NPS scores by industry to more accurately portray how customers relate to certain types of businesses. Keep in mind, though, these brands are the best in class. So, if you’re shooting for the stars, here they are.
Now that you have a good idea of where your peers are and where you should be aiming, it’s time to start working towards those goals. Here are the top 3 ways you can start improving your customer experience and NPS:
1. Follow up with detractors as quickly as possible.
According to a study by American Express, customers will tell an average of 15 people about a poor experience while they will only tell approximately 11 people about a good one.
Not only does it cost more to generate a new customer than it does to keep an existing one, that lost customer will take plenty of potential business away as well. It pays to follow up and make things right as quickly as possible. By diligently closing the loop with these customers, you may even turn them into some of your best promoters.
2. Mark trends in your feedback.
You might discover game-changing details that otherwise would never have crossed your mind.
For example, a doctor’s office dug into some patient responses and found that patients were upset that others who arrived after them were being seen first. While those later arrivals actually had earlier appointment times, other patients had no way of knowing. The office started displaying a patient schedule in the lobby to show the order of appointments, and complaints dropped immediately. In fact, studies show that detractors become the most loyal and outspoken promoters of your business if you take the steps necessary to convert them. Monitoring NPS feedback can help you improve your business in ways you would never expect.
3. Coach your teams and share feedback.
Customer feedback can give insight into individual interactions your customers are having with your employees.
Not only can you address and correct behavioral or transactional issues with data to back it up, but you can share positive feedback to boost team morale. Some companies post positive customer quotes about their most recognized employees on social media every month as recognition. One CEO in particular will even personally call an outstanding employee each week to show appreciation.