Tom Schwab runs Inbound For Ecommerce, a consulting agency that helps high potential customers implement inbound marketing strategies. Inbound For Ecommerce facilitates their clients’ marketing efforts by giving them tools to attract visitors, engage leads, and delight customers.
A Quick Preview of the Podcast:
- The most important tool to measure customer satisfaction
- How customer satisfaction relates to growth and profitability for your business
- How to create a Net Promoter Score email that will encourage participation
To See These Tactics In Action:
To See The Transcript:
Tim: Do you know your net promoter score? And if you do, do you even really care? Today’s guest has a truly compelling reason to pay attention and a powerful system that you can put in place to discover who your biggest evangelists are and to equip them to be an automatic lead generation source for your business. Hopefully, you know how important word of mouth advertising is but now you’ll have a way to get it like never before. Listen on for a great episode with my new friend, Tom Schwab from Inbound For Ecommerce.
Welcome to Conversion Cast, the only podcast that gets to the heart of the metrics. Now here’s another data driven case study.
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Hey, Tom, welcome to Conversion Cast.
Tom: Hey Tim, great to be here.
Tim: Awesome. Thanks so much for being here. And so we’ve got some fun stuff to talk about today. We’re going to be talking about something a little bit different and what I’d love to hear first is what were the results that this tactic got for your particular business?
Tom: Yeah what it did is it showed us that 1 out of 4 customers, 25% of our customers put their hands up when asked and said we want to be a promoter for your business.
Tim: That is awesome. Okay. So they basically said hey we want to promote your business, we want to help you grow and boy we love that word of mouth advertising or that earned media that some people call it. That’s just great. So before we dive into the tactic why don’t you tell us a little bit about what you do and what Inbound for Ecommerce is all about?
Tom: Sure. My name is Tom Schwab as you said and I run an agency called Inbound for Ecommerce. Basically we help high develop or high potential customers work and actually implement an inbound strategy. We just do consulting. We’re not a full service agency but it’s amazing the tools that are out there and the ways that you can go ahead and attract visitors in caged leads and really to like customers.
Tim: Why don’t you tell us a little bit about kind of the background behind this and just kind of tell us how you got into this particular tactic?
Tom: Sure. It actually came out of an article I was reading out of Harvard Business Review in [[0:02:51]] [Indiscernible]
Tom: It’s something that we have all had before. You know, everybody just got that email that says on a scale of 0 to 9, how likely would you be to recommend insert company’s name to a friend or colleague? And that’s something called a net promoter score and there’s a lot of research data that went through that, a company went and looked and said all these different things that people are asking customers. They came out and they said this is the only question that matters and it correlated passively to the growth of the business, the profitability of the business even the sale price of a business.
Because really it talks about you know, lifetime value of a customer, the viral nature of a customer and I looked at that and said wow, that’s a very interesting idea and with our matter tools and workflows, that would be really easy to hack together and get that number for ourselves.
Tim: Yeah that makes sense. So basically you know, as you mentioned you nerd it out , which I just love and from that came this idea that you could kind of develop these kinds of feelings in your customers. So we’re talking about the net promoter score , which I love to hear you kind of dig into that and just tell us what you ended up doing specifically.
Tom: Sure. So that when you go ahead and answer that question from 0 to 9, the way they break that down is if you’re from a 0 to a 6, it’s called a detractor. That means that you have something negative to say about the company, somehow they let you down. 7 and 8 means that you really don’t care about it. It’s referred to as a passive and then the 9 and the 10s those are the ones that are the promoters. So what you’ve got really is the people that loathe you, the people that don’t care about you and the people that love you. What you want to focus on is both the people that loathe you and the people that love you.
So what you do there is the people that loathe you following up with them so that you can go ahead and correct the problem or at least let them know that you care and that you’re human. And then the people that love you, that said hey I will promote you, then giving them the tools and following up with them to do that. So the way the workflow goes is very easy. You said they’re very manuscript, man marketing, no pitches, you know, no header images to the customer after a transaction.
It just says one important question and then you ask them this question. And you hyperlink your numbers 0 through 6 to a page that takes them to a negative or an NPS detractor. That page for us usually says we’re sorry that we disappointed you. If they’re a seven or eight then we just tell them to a page that says you know thank you so much for giving us the feedback and then if they’re a nine or a ten, we’re like we send them to a separate page that says you know wow, thank you so much for the compliment. You know, we’ll be going ahead and contacting you. we’re thrilled that you want to promote us.
So based on the context and what page they hit, we’ll go ahead and put them in a separate list. So with that we’ll put them in a list for either a detractor to follow up with, a passive that we know you know, they don’t care about us and we sort of know that or the promoter and then there’ll be the separate list each one of those contact lists then we’ll follow off a workflow. So not only do we have the automated workflow to work through these people, we also keep a running track of the score.
The calculation for net promoter score is basically if you take the promoters and minus the detractors and then divide those by the promoters plus the detractors. And you know, Apple those kind of companies, Apple, US AA, your best companies usually have an NPS score right around 75 or so. It’s possible to you know, to have a net promoter score of 0 , which should be awful.
Tom: Ours typically runs at about 80%.
Tom: So with that, you know, our –this email that we send to them has about a 61% open rate and then everybody that gets it, about 34% click-through. So if you take the click-through rates and the promoter rate, you can figure out that about 1 out of 4 customers is volunteering that yeah I’d love to promote you.
Tim: And are you taking – there’s part of this that I understand well and parts that I don’t so bear with me. But —
Tim: –are you taking some of the folks that are in the lower end of the scale that are really detractors and are you basically trying to get it so that they move that score and become a promoter? Is that kind of the idea when you’re focusing on the detractors?
Tom: With that, we really don’t – we don’t ask them that question again.
Tom: It’s sort of creepy. You know, if they’ve told you they [[0:08:11]] [Indiscernible]
Tim: Well what do you want to think of us now you know, —
Tom: You don’t want to keep asking them at the end again. So we don’t even ask them again.
Tom: But you know, there’s that old rule of thumb that if somebody likes your company or doesn’t like your company they are ten times as likely to say something about it as if they like it.
Tom: So with those we’re trying to follow up with them to find out what we did to follow or to not lean all of their needs or expectations. So there’s a little bit of feedback for our side so we can continue to get better. But then also just to reach out to them. Because sometimes it’s really easy to hate a nameless spam faceless company.
Tom: But when somebody follows up with you and for our detractors we even have them in the workflow that one of our management team calls them up and you know, even if it’s leaving a voicemail or something. And humanizes the company. So from that standpoint it’s harder to hate a person than it is [[0:09:15]] [Indiscernible] faceless company.
Tim: Yeah. For sure. So that’s really you’re just trying to turn detractors into –you know, you’re trying to kind of write the situation but the biggest focus here is on the folks who have committed to be promoters and promote your business. Have you been able to kind of tie revenue into that that promoter score?
Tom: Very much so and just because the business that this study is based off of is a direct to patient durable medical equipment company. So with that they don’t have a whole lot of lifetime value. The products that they sell and rent to their customers they probably will only use once may be twice in life. They talk about goodbye crutches that they don’t want you know, return or repeat customers because you know, [[0:10:04]] [Indiscernible] is enough for your life.
Tom: But what they really focus on is to get lifetime value of a customer is that while that customer is using their product that they’re a walking billboard.
Tom: And telling everybody about it. So where they see the lifetime value of a customer coming from is actually making customers into advocates or promoters and sort of tapping into that viral aspect of it.
Tim: And so how –you know, you kind of mentioned that you have this workflow. Is the process of reaching out them once they have decided that they are a promoter is that automated and if so how are you automating that?
Tom: It is. It’s automated and it really comes from a question of what you want them to do that brings the most value to the company and then how they interact the most. So if you got an ideal biopersona that’s you know, very much on the social media side, you could go ahead and give them a list of tweets that they could go ahead and click right there and make it easy for them. You could go ahead and give them coupons or something for their friends and that would be a way that you could track how much business is coming back from that referral also.
In the example that we used here with the goodbye crutches one of the biggest things that they have is that they if they can get them to the doctor’s office and influence the doctor to tell more patients about it, that’s the key thing. So from that standpoint, you know, trying to get to that B2B the surgeons and the influencers there is very tough. But if a patient walks in with the information and can sort of pitch it to the provider there’s a much higher likelihood that they’ll actually look at it. So what goodbye crutches does is one of the things they ask for the patient to follow up with is you know, if you’ve said that you would promote us hey could you go ahead and give this packet of information to your doctor. And you know, it’s amazing that those people that you know, say that they would, you know, they give a nine or a ten they’ve just made a commitment and if you follow up with them very quickly, they’ll stick to that commitment.
Tim: Yeah that makes perfect sense. But in the initial contact though, once you find out somebody leaves you a promoter score, is there an automated way that you actually reach out to them? Is there something you know, that automatically recognizes that or is it something that you just kind of have as a part of your process?
Tom: Well really it’s based – it’s based on what number they clicked, it takes them to what landing page.
Tom: And they get a different message. So right then you’re starting to communicate with them.
Tom: Individually and then from there they’re put into a list and then they get automated emails that go off of that or automated triggers that tells somebody hey could give this person a call? It’s —
Tim: That is the part that I missed.
Tom: –sometimes it’s hard to visualize. I’ll go ahead and share something with you Tim that you can go ahead and put in the show notes and share with everybody that walks through this and shows them how they can set it up on their own.
Tim: Awesome and you can see that at ConversionCast.com/TomDownload, that’s ConversionCast.com/TomDownload. So that follow-up basically you’re really segmenting based on their feedback and using that as a way to promote or basically encourage them to help promote or try to may be improve the experience that they’ve had or improve the perception that they had of your company.
Tim: I love it. I love it. It’s really simple. I feel like once you have a grasp of it, it’s pretty darn easy to do and boy what an impact that this could have in terms of the – just the perception of your company in the marketplace, the word of mouth , which is really I mean the most powerful way to advertise now. So yeah I really love this strategy and was there anything that you feel like we left out when it comes to this strategy?
Tom: You know the only thing that I would add to that is that I didn’t fully understand or comprehend was that the mergers and acquisitions these guys when they start looking at companies to acquire, net promoter score is one of those things across all industries that they look at.
Tom: If you could show them a trend of a solid net promoter score, my understanding is that even it increases the value of a company. So it’s not only what your customer is saying about you but what potential acquirers could say about you. So it’s definitely a number that every business should know what it is and be making sure that it’s improving.
Tim: Interesting. Wow that’s good to know. Very good. Well this has been awesome. Definitely a unique case study but I think that almost any business could really benefit from implementing this. So thank you so much for sharing this with us and I appreciate you coming on the show.
Tom: Thank you. Tim.
Tim: Thanks for listening to this episode of ConversionCast. If you liked what you heard here today, we have something awesome that we want to send you. Our amazing team has created a free reference guide for you with every single split test and piece of conversion data that we have access to here at ConversionCast. This free booklet is packed with incredible case studies and real metrics from real people to show you what’s really working across multiple industries right now. This is the kind of information you won’t find anywhere else. As one of our listeners, we want to give you a copy of this book absolutely free. You can get your copy right now by going to ConversionCastGift.com. Again that’s ConversionCastGift.com. Go there now and pick up your copy and we’ll see you next time.
Listen To Discover The Exact Method Inbound Uses To Create Promoters