Customer Loyalty and the Ultimate Question

Based on their answer, customers are categorized as “detractors” or people likely to harm the company’s reputation and defect to a competitor; “passives” who are generally positive about the company; and “promoters” who are extremely satisfied and can drive the company’s growth. A company’s Net Promoter score is calculated by subtracting the number of detractors from the number of promoters.

Depending on whom you ask, NPS is either the single best metric of customer loyalty and business growth potential or way too simplistic to be more meaningful than any other similar measurement. Regardless of its actual predictive capabilities, the overarching concept behind NPS remains sound – measuring how well a company is serving its customers and earning loyalty.

In the past, distributors were measured strictly on pricing and availability of their offerings. Now we are much more involved in the customer experience throughout the supply chain. For example, servicer networks of extended warranty companies are measured on how well they support consumer end users. As a parts distributor to these networks, Encompass is directly responsible for ensuring their success (and ultimately the companies or clients they work for) by getting them the components they need to quickly respond and make a field repair.

With customers at a premium, retention is a key factor for success. If you are unable to maintain customer loyalty, especially in a declining economy, you’re in big trouble.  At Encompass, we don’t compete on price – we compete on value. We are singularly focused on improving our value to customers through a variety of means, from making technology enhancements that streamline
parts ordering and account management to continually adding new manufacturer brands in multiple product categories. We consider ourselves an extension of our business partners. We want them to be successful, and we do what we can to provide support throughout the supply chain to make it happen.  This holds true for the manufacturers we represent all the way to the dealer who is buying the parts.  We like to call it “building brand equity.”

Encompass recently distributed our 2013 Customer Satisfaction Survey and urge you to participate. Your feedback is critical to us because we can’t make changes if we’re not aware of the issues.
Input we’ve gathered from previous surveys has led us to enhance our website, change packaging procedures, extend our call center hours and more.

If your business is not already surveying your customers by some means, now is the time. Keeping tabs on the customer experience is vital to the ongoing health of your business and should help give you insight into the answer to the ultimate question as it relates to your organization.