In our latest blog post we discuss some of the main uses of NPS® and why your hotel should be using it too.
The Net Promoter Score® (more commonly known as NPS®) is one of the most widely used metrics for measuring customer loyalty. In a service-minded industry specifically, NPS® is a key metric, including the hospitality industry. We're frequently asked why NPS® matters. Does it actually correlate to growth?
We’re listing five reasons why your hotel should be measuring NPS®, ranging from how it affects your staff to quantifying word-of-mouth. Note that this is not an exhaustive list and that there is a wide array of more reasons to measure NPS®.
If you're not familiar with NPS®, read up on it here.
1. Measure word-of-mouth traffic
Word-of-mouth is one of the most powerful Marketing tools yet we are rarely able to quantify it. NPS® changes that. By asking your guests to put a number to how likely they are to recommend your hotel to friends or colleagues, you are directly measuring their word-of-mouth intentions. Although it only measures their intentions (it doesn’t actually measure if they did or did not recommend your hotel), it’s one of the most accurate indicators of word-of-mouth impact and customer loyalty. According to Nielsen, 92% of consumers trust recommendations from friends or family more than any paid advertising. Measuring and keeping track of word-of-mouth is important to any business.
2. Motivate your staff by setting clear goals
An often underrated part of NPS® is that it provides clear direction and goals to strive towards. Through monthly NPS® reports, you can see how your hotel is progressing over time. There is no greater motivation than seeing progress and NPS® will help your hotel to do just that. Make your employees feel part of the same mission and strive towards success together.
Loopon analsyses your hotel's NPS®
3. Reduce customer churn
NPS® divides your customers into three categories: Promoters, Passives and Detractors. The Detractors will spread negative word-of-mouth and will not want to return to your hotel. While it’s important to entertain and maintain your promoters, decreasing the number of detractors will reduce customer churn. Focus on minimising the number of detractors and instead try to bump them up to passives or even promoters. According to studies, 95% of customers will tell others about a negative experience. Reducing detractors will have a larger effect than you may think.
4. Identify and take care of your most valuable customers
NPS® identifies promoters - your most valuable guests who will recommend your hotel to friends and colleagues. According to Temkin Group who analysed nearly 300 companies in 20 industries, promoters are 5 times more likely to purchase more goods and services and they are 7 times more likely to forgive a company for making an error. In other words, they are loyal. They will return to your hotel, they will get friends and colleagues to visit your hotel, too. Take care of them and appreciate their value. NPS® clearly identifies who your promoters are and makes it easy for you to target them with specific campaigns, deals and more.
5. NPS® is an indicator of Business Growth
Look at the big picture. Multiple studies have shown that NPS® can be seen as an indicator of Business Growth and success. The best companies often boast a high NPS®. The same applies for hotels and within the hospitality industry where customer satisfaction is crucial. Hotels that continue to make revenue and grow their business often has high NPS® scores.
Not currently measuring NPS? We got you!
Loopon works with NPS® and collecting valuable feedback. Easy-to-use reports will clearly let you see progress and growth. Ready to get started? Sign up today.
Net Promoter, NPS®, and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.
