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Customer Experience

Customer Segmentation and NPS: Get Deeper Insights from Your NPS Data

May 25, 2023

You could be a small business or a large global corporation. You could be a not-for-profit or a revenue-generating organization. Whatever type of organization you are, you know the importance of attracting and retaining customers. Loyal customers are at the core of organizational success.

The Net Promoter Score® is considered one of the most important metrics for measuring and increasing customer loyalty. The NPS® survey asks a simple question, “How likely are you to recommend product/company A to friends and family?” The NPS score is calculated by subtracting the percentage of detractors from the percentage of promoters.

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The NPS has its advantages – it’s a simple score, easy to understand and serves as a rallying point for improving the customer experience. But, you can get more out of your NPS score through better customer segmentation.

Customer segmentation is important for understanding your customers. The more you know about your customers, the more you can give them what they need. When paired with an integrated NPS system, customer segmentation can provide insights to help you create a customer-centric organization. The result is improved customer experiences and stronger customer loyalty. Your NPS data has valuable insights – you just have to know how to use it.

Dive Deeper Into the Traditional NPS Customer Segments

NPS naturally segments customers into promoters, passives and detractors. While the NPS segmentation implies homogeneity among each segment of customers, that’s not necessarily true. All detractors are not equal – those that rate you a six are not the same as those that rate you a zero. It’s also true that just because someone is a detractor doesn’t mean they are likely to trash your reputation. The detractor giving you a rating of zero might be more inclined to complain about your company than the detractor who rated you a six.

This is also true of your promoters and passives. Not all your promoters promote. And it turns out some of your passives may not be so passive after all. A study found that customers who rate an eight, nine or a ten were similar in terms of their likelihood to recommend. This means you should also focus on passives that rate you an eight, the efforts you direct at your promoters for boosting customer referrals. On the other hand, the study found a significant difference between those that rated a seven and eight in terms of their likelihood to recommend. There was also a substantial increase in the likelihood to recommend from a rating of six to seven. On the other hand, among detractors, those with ratings of five or six were more likely to recommend than those that rated at lower ratings.

Tailor Marketing and Business Strategies for Your NPS Segments

The benefit of the NPS surveys is that you can create tailor-made strategies to address each segment. By digging deeper into your three segments, you can gain valuable insights into your customers and leverage your NPS data better. You can then fine-tune your marketing, sales and service experiences to address customer complaints and improve your customers’ experiences.

Segment your NPS data deeper and analyze the NPS data to discover trends and patterns. Combine the numerical analysis of NPS data with the corresponding open-ended questions to gain deeper insight. For example, you might be able to identify detractors that are extremely dissatisfied and resolve their complaints. Thus, you’ll be able to close the feedback loop on these extremely unhappy customers. You might even salvage a few of these customers.

On the other hand, you can develop different strategies for the detractors who rate you a six to convert them into promoters. Your passives you can try to delight, give them the much-needed push to convert them into promoters. Finally, you can encourage promoters to advocate for the business and leverage the economic value of promoters. You can use NPS to boost customer referrals – you can encourage your promoters with the right incentives.

Segment Customers Based on Revenue

You have to know who your high rollers are – the people who do big business with you. To know this, you need to segment your customers according to the revenue they generate for your business. If you have business clients or manage large corporate accounts, you know segmenting customers based on revenue is crucial. Once you’ve done this essential customer segmentation, assess the NPS scores for each revenue-based customer segment. Pay particular attention to feedback from high revenue-generating customers. Any insights you gain and implement from their feedback are likely to have huge positive impacts on your business outcomes.

Do your high-grossing clients display a high NPS score? If yes, these clients already have a high opinion of your organization. You can improve the customer experience for your promoters significantly without incurring significant costs – and also get significant positive returns.

Use a feedback management system to analyze NPS surveys and recognize trends and patterns in the NPS data. Use a response management system to view individual responses – especially for your biggest clients. Analyze recurring trends and patterns in NPS feedback data. Identify strategies for improving the customer experience based on the specific needs of individual segments. Then use these insights to address specific issues that might be affecting your customers.

Segment Customers Based on Product and Service Plans

Analyze NPS data across product and service plans. Identify the plans with the highest NPS scores. Analyze their share of promoters, detractors and passives. Include this information in your cost-benefit analyses on product upgrades, service changes, pricing structures and even customer referral programs.

Dig deeper into plans to identify trends and patterns across detractors, promoters, and passives using response analysis reports. Use this insight to target specific upgrades and improvements at the different categories. For example, customer feedback might uncover recurring issues that need to be addressed across your detractors. Or, open-ended questions can offer insight into features or services promoters specifically value.

Segment Customers Based on Customer Personas and Cohorts

Your customers have certain characteristics that can be used to create detailed customer profiles including age, title, role etc. Segment customers based on these characteristics and create customer personas. You'll get richer insight into your customers through this segmentation. Use NPS data across these customer segments to uncover new insights about brand or product placement, and even to uncover hidden markets.

Segmenting customers this way is especially useful as it allows NPS feedback data to be linked to other customer data from across the organization. By connecting NPS data to other forms of customer data, for example, social media analytics, you can get a multi-dimensional view of your customers. Leverage these insights to address problems as they are highlighted by social media and other analytics. Also link to the customer’s NPS profile to see where they stand on the loyalty spectrum for your company. Use this multi-dimensional view of the customer to create specific marketing, sales and service strategies for particular segments to earn increased loyalty.

Segment Customers Based on Customer Lifecycle

Segment your customers based on their customer lifecycle. This is especially important for long-term customers. Is the NPS score for your long-time customers high? Ideally, these customers should display a higher score and higher customer loyalty. Use NPS insights to make their customer experiences better. These customers are likely to already be your promoters and advocates. If they aren’t actively advocating on your behalf, this is the perfect opportunity to get them involved. Your NPS system can help you get the most out of these promoters. Your NPS system is the key to boosting customer referrals from long-time customers.

Use customer feedback software to analyze trends in NPS surveys conducted at different points in time to track customer loyalty over time. Use insights from NPS surveys to identify and anticipate the issues that customers face across their lifecycle, and those that lead to customer churn. You'll be able to solve problems before they happen and increase your share of long-time customers. You can also use NPS feedback to identify issues specific to certain points in a customer’s journey. Create improvements that make customer journeys easier.

Segment NPS Data Based on Touchpoints

Use transactional NPS surveys after certain transactions or at certain touchpoints. Do certain touchpoints display higher NPS scores? If yes, dig further into NPS feedback to identify the reasons for the success of those touchpoints. Use the insight to improve the customer experience further. Tailor marketing and service strategies specifically for individual touchpoints based on NPS data. You can also use this feedback to encourage cross-collaboration across teams.

You must also identify touchpoints with low NPS scores. Analyze the customer feedback to identify trends, patterns and recurring issues customers are facing. Use this as a starting point for identifying processes that could use improvement. Send the insights from NPS data to customer-facing teams who can improve the customer experience.

An integrated NPS system covers the NPS survey and more. It focuses on creating and improving systems, processes and policies across the organization. Learn how to use NPS effectively with customer segmentation through this NPS guide. The ultimate goal is to serve the customer better. Together customer segmentation and NPS data will give you essential insights into your customers – so you can achieve exactly that.

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Learn more about the Net Promoter Score (NPS)

Niyati Behl

Written by Niyati Behl

Dec 13, 2018

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