NPS: Identify, Improve, and Maintain Customer Loyalty

Nothing is more critical to the success or decline of a franchise brand than what customers think or say about its products or services. As a rule, franchisors who understand and appreciate the significance of customer loyalty are the ones most likely to thrive. Those that don't "get it" generally experience challenges that can seep into multiple areas of their franchise organization, including overall sales, recruitment, and retention of franchisees and customers alike.

Franchise organizations that deliver a customer experience that drives engagement and generates strong recommendation behavior on all levels will get a higher return. Customer experience directly affects referrals, repurchase, renewals, and reputation. Today's competitive market, combined with word of mouth through the web, amplifies the impact customer loyalty has on financial performance throughout a franchise system.

Net Promoter Score (NPS) is the most widely adopted customer loyalty metric today. However, it's become increasingly important for franchisors to go beyond just "knowing their number" to analyzing and understanding the feedback they receive, and use it to actually improve their organization's effectiveness. Loyal customers have a profound effect on those around them, so it is important to have a way to identify and mobilize advocates, as well as close the loop and address customers who have gone negative. Knowing what customers are saying about your brand, and being able to segment drivers or aspects of that sentiment, creates insights that you can in fact act upon to help improve customer experience or maintain customer loyalty.

With franchise systems' intricate structures and hundreds upon thousands of franchised locations, it can be difficult to thoroughly measure, understand, and address customer loyalty feedback. However, new software approaches that deliver Net Promoter Scores are making this possible, moving NPS solutions from being a packaged commodity to a complete system that delivers insights and actions that drive success. For example, Satmetrix software, NPS Go, pulls feedback and survey responses from across the entire franchise system using varied sources such as call centers, training groups, and implementation teams as well as social media conversations, and provides segmented reporting and detailed analysis. The software helps franchises identify promoters and detractors and implement better strategies, based on that feedback, to improve customer loyalty.

Promoters are those who recommend your product or service, both in person and online. They tend to provide stronger value not only in their own purchase behavior, but in the effect they have on others. Detractors are those who view your product or service negatively, and it is important to be able to act quickly and address these at-risk customers as soon as problems emerge. Closing the loop with detractors not only minimizes negative business impact, but real attention paid to such customers often fosters loyalty and transforms a detractor into a promoter.

Results are achieved by recovering detractors and mobilizing promoters, allowing franchise organizations to contain or increase revenue. Our software, for example, offers real-time feedback, allowing franchises to identify at-risk customers or segments that require action. Shortly after negative feedback is received, franchises are alerted about the issue and can immediately respond and, when appropriate, put a recovery plan in place.

Alert management and reporting by segment lets franchises take specific action and extend it to improve operations. NPS Go, for instance, delivers insights and routing alerts to the appropriate people throughout a franchise organization. This results in making operational improvements that directly affect and improve the customer experience - and getting a return on investment by delivering more revenue through retention, renewals, and upsells.

Role-based dashboards and home page reporting make it easier for the most appropriate employees in every unit to monitor and address customer loyalty by unit. Franchises are able to track loyalty by team, department, region, product, or survey program, making it easier to identify and implement specific tactical process improvements that improve the customer experience. The software can be integrated into the workflow a franchise already uses with its front line, such as Salesforce or Outlook, making operations efficient and reducing administrative overhead. Reports describe what customers are actually saying and are tailored to each role and each employee. Your business grows by leveraging relationships with promoters and closing the loop and recovering detractors.

Understanding customer feedback across the entire franchise system and being responsive to both negative and positive customers provide a complete picture of your customer world, generating much higher return and success for all facets of the brand.

Steve Baxter is general manager of Global Midmarket Solutions for Satmetrix, Inc., the co-creator of the Net Promoter Score concept. He has designed, created, and implemented NPS solutions used by thousands of companies. He can be reached at 678-231-1951 or steve.baxter@satmetrix.com.