December 12, 2019 Beth Cadman

NPS: Why it matters, who you should send it to, and how do you read the results?

Understanding why NPS could be helpful to your business when to send it, and how to interpret results will help businesses create a powerful action plan and retention strategy to increase customer loyalty, revenue, and business growth.

A Net Promoter Score (NPS) is widely thought of as one of the optimum ways to measure how loyal a customer is to a particular business. The metric was introduced by Fred Reichheld in 1993 and is essentially a single metric that enables companies to ascertain how strong their relationship is with their customers. NPS also allows the operator to identify areas where an operator can improve, therefore bettering their relationship.

An NPS can come in different formats and can be modified to suit different businesses. However, the most important question is one that asks customers to give an overall rating from 1-10 on how likely they are to recommend the company to someone else. Businesses can also include several closed questions and a comment box where customers can write more freely or add specific details to explain their scores or describe their unique customer experience. 

The overall rating reflects how likely customers are to recommend that brand or product to someone else. The closed questions are set to find out more about specific details, some of which may or may not be relevant to that particular customer, but are of interest to the business. The free text box, therefore, is essential, so customers are given the freedom to tell the company what they think and why. 

Why is NPS so important?

Mike O’Connor, the Founder of Service Professionals Network, said of NPS “(It) nurtures growth because it collects detailed customer feedback on experiences. Nobody else is better qualified to tell a brand how they can improve! Using NPS helps any business develop their processes, people, products, pricing, and overall experiences for the long term.”

The NPS format us so useful because it gives businesses precise data on their overall performance in terms of customer loyalty, and by correlating scores given with the freely written responses, companies can get a much better understanding of why any single customer is particularly loyal or disloyal. By analysing the NPS in detail, they can then begin to create strategies that allow them to improve customer experience and boost customer loyalty

NPS does not focus on how happy customers are with a particular event, service, or product within the business. Instead, it focuses on whether that customer would be willing to recommend the company overall, so the resulting score is a robust indicator of sustainability as well as the potential for growth through word of mouth recommendations. 

In the 2003 Harvard Business Review, Reichheld wrote, “evangelistic customer loyalty is clearly one of the most important drivers of growth. While it doesn’t guarantee growth, in general, profitable growth can’t be achieved without it.”

How to analyse NPS Results

Those who give a score of 0 to 6 are known as detractors, and are dissatisfied with the company and may share their negative opinion with others. Those who provide a score of 7 to 8 are called passives and are unlikely to go out of their way to recommend the company to anyone else. Finally, those who score the business a 9 or 10 are likely to endorse them to others actively and are known as promoters. The NPS score is calculated using a specific formula that subtracts the percentage of people who are detractors from those who are promoters. Passive responders are dismissed. The final score can be anything from -100 to 100. 

Businesses can use this figure as a starting point to understand where they sit in terms of customer loyalty. If they have a positive NPS, this indicates that the number of people recommending the business outweighs the number who are saying negative things about it. A negative NPS score means the opposite. 

It is also helpful to connect responses to the amount of revenue a customer brings in. From this information, they can better understand how much of their income is generated by customers who have a positive and robust relationship with the brand compared to those at risk of moving away and finding the same to similar products and services elsewhere. Doing this provides precious insights that can then be used to develop strategies to create growth year upon year.

Of course, why the score as a standalone metric is valuable, businesses that focus on their NPS score, in combination with the comments provided in the free text box, can gain even more powerful insights into customer behaviour. From this data, they can predict future actions more keenly as well as understand the areas in which the business needs to improve.

NPS is so valuable because it helps companies better understand their customers, and how those customers feel about the company. By sending NPS to customers at the right time, owners and their teams can hope to analyse the resulting data and not only better predict customer behaviour on an individual level but also pinpoint common denominators that affect customer experience and change/ remove/ improve them to ensure the NPS score improves.

So who should you send the NPS to, and when?

If a company decides to engage in NPS, researching which customers to send it to and the best time to do so is crucial. A business will naturally want to ensure a significant response, and identifying at what point in a customer journey they would be most receptive can help with that. It is also essential to consider how frequently to survey members.

KeepMe software enables gym owners to send NPS to the right members, at the ideal time in their member journeys, meaning response rates will be high. It can also analyse the sentiment in easily digestible ways, breaking down information, so it’s easier to understand and turn into actionable and practical retention strategies. By using KeepMe as the vehicle to find out the NPS, gym owners are able to be proactive with customers. They are given an excellent insight into red flags that signify an at-risk member and can understand the bigger picture. An NPS can assess the overall ‘health’ of the relationship between members and the club while simultaneously identifying any specific issues that can be quickly addressed to ensure member satisfaction and loyalty once more. 

If you want help with your NPS, why not book a demo to see how KeepMe can help today? 

December 5, 2019 Danni Poulton

Which came first, retention or referral?

Getting new member referrals is the holy grail of marketing; you’re turning your members into one-person marketing operations. So should referrals come before retention? Or do you need to improve gym retention to generate referrals? We investigate.

Referral marketing is extremely powerful. People frequently talk about products and services that they get value from, and the gym is no exception. The vast majority of consumers trust recommendations from word of mouth. In fact, people are 4 times more likely to buy goods referred to them by a friend, according to Nielsen. And when it comes to social media, people are more likely to buy based on posts from friends and family than they are from brand accounts.

Mark Zukerberg is someone who knows a thing or too about the power of leveraging human relationships to create loyal consumers. Here’s his take on the importance of referral marketing:

“People influence people. Nothing influences people more than a recommendation from a trusted friend. A trusted referral influences people more than the best broadcast message. A trusted referral is the holy grail of advertising.”

Which came first, membership referral or gym retention?

You’re not going to be able to get referrals out of people if they themselves don’t stick with your gym.

But on the other hand, it’s only through getting referrals from trusted sources and having a social reason to stick with a gym that you are going to get the most out of your customer retention strategies.

So in many ways member retention and referral go hand in hand

But it is worth understanding that there is a cyclical relationship between referral and gym retention.

To get more referrals you need to improve gym retention… and in the process of getting more referrals you will make it easier to retain your members.

So to get a referral you need to make sure your gym members are active and engaged and that their experience is a positive one. In a word, you have to increase the chances they’ll stick with your gym.

So how do you get referrals to your gym?

Well, first of all your members need to have an exceptional experience of your gym. You can give them this by…

  • Having a strong onboarding process so members hit the ground running when they join your gym and are predisposed to stick around.
  • Building relationships with your gym members to make them feel connected to your gym.
  • Using customer retention software to reach out to at risk members and identify potential gym “promoters”.

Using Net Promoter Scores to get more gym membership referrals

One of the major advantages of using AI membership retention software is that you can tap into the power of Net Promoter Scores (NPS).

NPS scores are a customer loyalty metric that is used across many different industries. The scores are worked out by asking people how likely they are to recommend a brand to a friend or colleague by giving a score out of 10.

Net Promoter Scores identify whether customers have a positive or negative sentiment towards your products and services, categorising customers as either ‘detractors’ (unhappy, will actively discourage people), ‘passives’ (relatively happy, but might leave for other brands), or ‘promoters’ (have a great experience, will recommend to friends and family).

Gym retention software helps you track people based on their NPS scores. This means you can reach out to ‘promoters’ to get them involved in your referral program. You can motivate them to get involved by offering them referral rewards. 

Retention is the secret to getting more membership referrals

Whilst there is a circular relationship between customer retention and referral, having an effective membership retention strategy is the necessary foundation on which to build a referral programme.

The first step to creating a solid member retention strategy is to make your gym an experience people will want to tell their friends about. This will mean going above and beyond the typical gym experience. 

What are the elements of an effective member retention strategy?

Let’s take a look at what makes people want to stay with your gym.

Once you have this foundation of member retention, it’s time to focus on the most engaged and loyal customers and encourage them to actively spread the word to friends and family.

This will result in glowing referrals far more powerful than anything dreamt up by your marketing team alone.

All customer retention strategies are greatly improved by the use of AI retention software like KeepMe, which is fully customisable to boost retention for your gym brand.

To find out how this software can solve your unique retention needs, you can book a free demo of our software today.