Research suggests a 5 percent increase in customer retention will boost profits by 20-100 percent across a wide range of industries, which helps to explain why businesses both big and small are so focused on measuring customer loyalty and brand advocacy.
A common method is to simply phone customers after they bought a product or service to ask how satisfied they are. More business-savvy entrepreneurs will frame the question differently, asking customers how likely they are to recommend the brand to others. This produces whats known as NPS, or Net Promoter Score.
But such bold tactics can be counterproductive and produce inaccurate results - phoning customers can damage the brand, surveys can be misleading and there are more reliable ways for fledgling businesses to track customer loyalty.
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