As this blog has covered several times, there is a major disconnect between the claims made about the state of the print sector and the reality. Many people, including industry observers and publications, have been arguing for quite a while that print companies need to shift their focus away from business forms and transactional products and toward other areas, including marketing and promotional materials. While it's true that the industry has changed tremendously in recent years, there is still a great deal of revenue for print distributors to pursue via these channels.
There are several reasons why business forms remain such a powerful area for print distributors to focus on. Among the most significant of these is the simple fact that traditional forms represent easy repeat business. These forms don't need to be redesigned, just reordered at the appropriate time. They offer major financial rewards for relatively minimal time commitments on the part of print distributors.
However, it's important to note that there is a major stipulation here that needs to be acknowledged: The benefits of business forms for print distributors are only available when these companies can retain their clients for long durations. Any substantial customer turnover will have a devastating impact on the bottom line.
But how can print distributors maximize their client retention rates and minimize the risk of attrition? There are a number of policies and resources worth pursuing, but one of the most useful may be the application of Net Promoter Scores.
Understanding your customers
As Butler Street Research, a management consulting, training and research firm, recently explained, the value of the Net Promoter Score as a metric is that it has been proven to be far more accurate a predictor of client loyalty and revenue than virtually any other form of measurement.
For example, many companies continue to turn to customer satisfaction surveys in order to determine how their clients feel about the organization. This would seem like a natural and invaluable approach, but in practice these surveys tend to produce fairly inaccurate results. Butler Street Research pointed out that studies have found that four-fifths of customers who leave a supplier consider themselves to be either "satisfied" or "very satisfied" with the vendor. This suggests that either these customers are exaggerating how satisfied they truly are or that customer satisfaction simply is not strongly linked to customer loyalty. Whatever the case may be, though, the fact remains that customer satisfaction surveys can't be seen as a strong predictor of customer retention.
But as noted previously, client retention is critical for print distributors that hope to take advantage of the natural benefits which business forms have to offer. This means that such organizations must turn to a different metric to better gauge their client relationships.
Net Promoter benefits
Net Promoter Scores are ideal in this capacity, Butler Street Research explained. Created in 2003 by Bain & Company and Fred Reichfeld, the Net Promoter Score was specifically designed to address this discrepancy.
"Utilizing the Net Promoter Score enables suppliers to understand which of your customers are loyal vs. satisfied," said Mike Jacoutot, Butler Street's founder and managing partner. "Research shows that satisfaction does not equal loyalty. And that makes NPS the greatest predictor of client retention and future revenue."
Companies in many industries have already fully embraced Net Promoter Scores as a means of improving their view of client loyalty and retention. For example, Customer Gauge has highlighted varying scores among firms in the financial services, insurance, technology, retail, travel and communications sectors.
There's no reason why businesses in the print industry cannot follow suit. By embracing Net Promoter Scores as a leading metric for understanding customer loyalty, it will be much more feasible for firms to predict their clients' behavior. This in turn can play a key role in helping print distributors fully take advantage of the potential of business forms, as they will be able to address any client problems or other issues early on, before the customer decides to leave for a competitor. Having that foresight is invaluable, and it allows print distributors to strategize more effectively and with greater insight.