Customer loyalty is the cornerstone of success. Loyal customers not only drive repeat business but also act as brand advocates, fueling growth through word-of-mouth.
A powerful tool to gauge customer loyalty is the Net Promoter Score (NPS), a metric that measures how likely customers are to recommend your business.
By tapping into this feedback, companies can uncover what delights or frustrates their audience, making it a reliable indicator of retention potential.
In this article, we’ll take a look at how BNPL leader Affirm used NPS feedback to improve customer experience, address pain points, and establish market dominance.
Listening to customers through tools like NPS is the first step to earning their trust and keeping them.
ex GM Customer Experience - Microsoft
NPS is a widely used metric that assesses customer loyalty by asking one simple question: “How likely are you to recommend us to a friend or colleague?”
Responses are scored on a scale from 0 to 10. Customers are then categorized into three groups:
Promoters (9-10) are enthusiastic advocates
Passives (7-8) are satisfied but unenthusiastic
Detractors (0-6) are unhappy and potentially damaging to your brand.
The NPS is calculated by subtracting the percentage of Detractors from the percentage of Promoters.
High NPS Scores strongly correlate with customer loyalty and retention, reflecting a customer base that’s not just satisfied but eager to advocate for your brand.
Promoters (those who score 9 or 10) are up to 80% less likely to churn than Detractors (those who score 0-6). This highlights the strong link between loyalty and retention, which is crucial for business success.
Bain & Company
In fact, research from Harvard Business Review emphasizes that even a modest 5% reduction in churn can increase profits by 25-95%. These statistics underscore the importance of fostering customer loyalty to drive long-term growth and profitability.
To leverage NPS feedback for retention, designing and distributing surveys effectively is key. Start with these best practices.
1. Keep surveys short, clear, and focused: Use the standard “How likely are you to recommend us?” question
Follow up with an optional open-ended “Why?” to gather actionable insights.
2. Timing matters: Survey customers after key interactions, like a purchase or after using a new app feature, to capture their experience when its fresh and top of mind.
3. Avoid survey fatigue: Quarterly or biannual surveys strike a balance for most businesses.
4. Integrate NPS Surveys into the customer journey: Trigger a pop-up survey post-transaction or follow-up emails after a support chat. This integration taps into user behavior, boosting response rates and delivering actionable feedback.
Raw scores alone don’t drive retention, understanding the “why” behind them does.
Step 1: Segment feedback: Split the feedback by platform (web, mobile), by type (Promoters, Passives, Detractors), or other attributes relevant to your business, like user demographics or subscription tier.
Step 2: Analyze open-ended responses: Read through every response to spot themes—e.g., Detractors frustrated by a clunky app checkout or Promoters raving about seamless navigation.
NPS software like Sondar.Ai transforms this process, using AI to instantly sift through massive feedback volumes, pinpointing patterns, issues, and opportunities. This frees you to focus on action, not just analysis.
Step 3: Prioritize & Take Action: Rank issues by impact. Fix urgent Detractor complaints like app bugs first, then enhance Passive suggestions, and leverage Promoter wins for marketing.
Step 4: Close the Loop: Follow up with customers, addressing their feedback directly to rebuild trust and reinforce loyalty.
Affirm, a digital lending fintech, grew its NPS to an impressive +82, far above industry norms. Prior to implementing NPS, Affirm relied on ad-hoc customer interviews, with a formal NPS program, they could systematically uncover gaps in their product and service.
Survey feedback highlighted key areas: updating billing reminders, streamlining payments and checkout, and enhancing online FAQs. Acting on these insights boosted customer happiness and trust.
At its core, NPS is a measure of trust... It’s how we ensure every decision prioritizes the customer.
CEO at Affirm
Additionally, Affirm closes the loop by flagging every promoter and detractor response for follow-up by their Customer Operations team. This means when a customer gives a low score, they can expect a personal outreach to address their concerns.
Internally, Affirm also circulates a weekly “customer spotlight” summary of NPS comments to all teams (engineering, product, execs), keeping the voice of the customer at the forefront of decision-making.
These customer-centric tactics have helped Affirm solidify its leadership in the ultra-competitive BNPL space.
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