How to Turn Passives and Detractors Into Promoters
Published on August 19, 2021 by Vandana Ahuja
Unlocking organisational success with the Voice of the Customer programme (an 8-part series) This is part 7 of 8 our comprehensive series of blogs on the Voice of Customer. Stay tuned for more blogs.
In part 6 of the series, we learnt in detail the processes of acting on Voice of the Customer feedback-closing the inner and outer loops. This blog talks about how the primary objective of closing the loop is to convert passives and detractors to promoters and the steps that need to be taken to realise this.
The primary focus of an organisation is to increase its revenue stream and keep growing. There are two ways an organisation can grow-customer retention and new customer acquisition. While acquiring a new customer would bring an additional revenue stream, it also involves greater expenses in the form of sales and marketing. On the other hand, renewals ensure continuity of existing revenue streams at no major additional marketing outlay, and new customer acquisition via referrals. An organisation is in a secure and comfortable position to expand its client base when the client churn rate is minimal.
Moreover, it would be harder to attract new customers unless most of the customers are brand evangelists of a company. This is where ‘promoters’-clients who help increase the customer base with their positive word of mouth-play a major role. However, till the time there are detractors and passives in the system, it is difficult to attract new clients. That is why converting detractors and passives to promoters is a key imperative for a business.
Along with understanding and acknowledging individual feedback, strategic changes to different areas, including, policies, pricing and resource allocation across an organisation, are required to change passives and detractors to promoters.
Focus areas for closing the outer loop: Converting passives to promoters, followed by converting detractors to promoters and then pitching new clients should be the order of action for a company looking to maximise confidence and trust. Though all three steps can be worked upon simultaneously, jumping directly to adding new clients might not be cost and time effective.
Converting passives to promoters
Passives are customers with a neutral point of view on a product or company. They might be using the product out of necessity. They do not find anything unique about the offering and might switch to a competitor for minor issues with an existing vendor or for additional value from a competitor.
Passives are often neglected by a company, though they can be assets, provided they are treated well. Since the passive score is close to a promoter score, it is easier to convert passives to promoters, and this can be achieved with improvements in one or two areas. For example, passives are sensitive to prices since they have neutral views of products. Companies need to be watchful of competitors’ offerings that could lure customers away easily. Additionally, a customer may only want an additional feature or a small tweak in a product to become a promoter.
How to strategise and execute this change is explained below:
The changes required may include revising pricing based on competition, improving customer support, providing a user-friendly interface and adding some features that competitors are not offering.
Converting detractors to promoters
While it is comparatively difficult for a company to turn detractors to promoters in comparison to passives, it is more critical for the company’s success. Detractors are more likely to spread negative word of mouth among a greater number of people, which would harm a company’s reputation, while a happy customer would tell a lesser number of people about their delightful experience. According to a survey conducted by Inc.com on over 3,200 random consumers, 75% had indicated that they shared negative feedback or experiences as opposed to 42% of customers recommending a product or service they enjoyed.
The immediate impact of detractors on revenue is another reason why they should be taken care of by companies. Detractors are most likely to move to other products, affecting the revenue stream. On the other hand, once converted to promoters, they could bring revenue benefits to the business.
Detractors may also switch to another brand at the earliest opportunity. As per a study by PwC, one in three consumers (32%) is likely to walk away from a brand after just one bad experience. A high churn rate results in severe losses to revenue and profits.
Organisations need to work towards broader issues diligently to transform detractors to promoters. The seven-step process to plan and execute this change is explained below:
While it is extremely important to work towards converting passives and detractors, companies should not forget to uplift promoters by saying “thank you”, providing occasional offers and discounts and maintaining healthy communication.
While dealing with all consumers, whether detractors, passives or promoters, it is vital to maintain a human connection with the client. Staff should build strong relationships with clients, make them believe that companies care about customer needs and preferences, their opinions are a priority and they are being provided an exclusive service and experience.
How Acuity Knowledge Partners can help
Acuity Knowledge Partners has been providing research and insight support to diverse stakeholders in the technology sector-tech corporates, tech advisory firms and tech-focused investors-for nearly two decades. Equipped with a 360o view, we understand how customer data can be captured and analysed, and how the story emanating thereof can be leveraged to achieve better business outcomes. We help Fortune 500 technology corporations, mid-tier firms, and start-ups leverage customer feedback on people, products and processes to remain flexible and better serve their customers.
Originally published at https://www.acuitykp.com.
About the Author
Vandana Ahuja, Delivery Manager, is part of the Private Equity and Consulting team in Acuity Knowledge Partners, Gurgaon. Currently working as a strategic consultant for a financial technology firm in the customer experience domain. She has over 10 years of experience in Strategic analysis, Business research and consulting.
She has diverse experience of working with top consulting companies across various industries and geographies. She has managed and executed various consulting projects involving competitor analysis, industry studies, company profiling, survey analysis and strategic recommendations, trend analysis, verbatim and sentiment analysis. She has managed various consulting clients.
She holds a degree in Master of Business Administration (M.B.A) with specialization in Finance and Bachelor of Arts (B.A) in Economics.