If you want to extend your customer's LifeTime Value, you need their loyalty.
It might be unrealistic to expect that 100% of their purchases in a product or service category that you provide are made from you. They are not unfaithful to you buying from other suppliers. But a way to visualize customer loyalty is the Net Promoter Score.
The Net Promoter Score (NPS) goes beyond customer loyalty. A customer can be loyal and make all his purchases in a product or service category from a supplier. But he can be neutral from the point of view of prescription or referral to other potential customers. For example, imagine that a customer of yours makes 100% of his purchases from your company, but when asked if he would recommend your company, he remains neutral. Why might this happen? For example, there are several possibilities if someone stays in your three-star hotel every time he comes to your city but does not recommend it because he would like to stay in a four-star hotel, which does not exist in your city.
It might be unrealistic to expect that 100% of their purchases in a product or service category that you provide are made from you. They are not unfaithful to you buying from other suppliers. But a way to visualize customer loyalty is the Net Promoter Score.
The Net Promoter Score (NPS) goes beyond customer loyalty. A customer can be loyal and make all his purchases in a product or service category from a supplier. But he can be neutral from the point of view of prescription or referral to other potential customers. For example, imagine that a customer of yours makes 100% of his purchases from your company, but when asked if he would recommend your company, he remains neutral. Why might this happen? For example, there are several possibilities if someone stays in your three-star hotel every time he comes to your city but does not recommend it because he would like to stay in a four-star hotel, which does not exist in your city.A positive NPS implies that the people you serve are loyal and satisfied and recommend your offer for that category of product or service. A circular business needs its customers to be satisfied with the circular value proposition AND recommend it to other potential circular customers.
The Net Promoter Score consists of the number of people who would recommend your products to colleagues, friends and family, minus the people who would actively deter other from buying them.
The NPS is a metric that allows us to anticipate whether the market's position on our offer is positive or negative. A positive trend in this metric will facilitate the expansion of our offer in the market. Given the particular characteristic of the Value Proposition of a Circular Business Model, which extends from Market Value to Planet Value and Social Value, we are interested in obtaining positive NPS focused mainly on customers who perceive the three components of our value proposition. We will have to educate the market about the triple benefits of the circular value proposal (External Adoption Factors at the CBMC). So that, the content of their positive reference includes all dimensions of the value of our product, not only those related to its functionality and attractive design.
