Measuring Customer Loyalty through NPS: A Strategic Intervention in Real Estate

Jitendra K Jena & Vineet Nanda - September 22, 2021 - - 0 |
Measuring Customer Loyalty through NPS

The world has changed forever. The unprecedented global health crisis across the globe has not only changed market dynamics, but has also impacted the buying habits of consumer.

The meaning of Consumerism’ has been completely redefined today. The pandemic has taught us to live a conscious life. The concept of impulsive buying has been replaced by conscious buying decisions by customers. Now every customer wants to get involved in experiencing, benchmarking & negotiating the product before getting into the buying mode.

Today, the most challenging task in the business is enhancing brand loyalty and customer retention. Mostly fast-growing companies have adopted different loyalty matrix to gauge the degree of customer loyalty towards a brand. Being driven by the channel partners, real estate sales in India has never been focused on measuring the customer loyalty as a part of company’s strategic intervention. But post pandemic, as part of strategic sales pitch, all real estate groups have to start thinking on the lines of focusing on customer loyalty measures.

Considering the present circumstances, new customer acquisition has become a daunting task. At the same time, it has become a great challenge to retain the existing customers. Therefore, a different loyalty matrix needs to be adopted by the fast-growing companies to gauge the degree of customer loyalty towards their respective brands.

What is Net Promoter Score (NPS)?

NPS (Net Promoter Score) is a Customer Loyalty Matrix which can be used to gauge the loyalty of company’s customer relationship. NPS also measures customer experience and predicts business growth.

NPS Calculation

Net Promoter Score is a customer loyalty score which is calculated by asking customers one question: “On a scale from 1 to 10, how likely are you to recommend this product to a friend or colleague?”

On the basis of the scores, customers are classified into three categories – Detractors, Passives or Promoters.

  • Detractors (Score: 0-6) are unhappy customers who can damage your brand through negative word-of-mouth defaming. Generally, they don’t stick around to repeat purchases. They actively discourage potential customers in buying products or services.
  • Passives (Score: 7-8) are satisfied but unenthusiastic customers. Passives scores are not included in NPS calculation. They can shift to other brands easily in case of competitive offerings. They don’t actively recommend a brand, and they are not inclined to damage it with negative word of mouth debasing. Passives are very close to being promoters (only when they give a score of 8). So, it is advisable always to spend time investigating what to do to win them over.
  • Promoters (Score: 9-10) are loyal enthusiastic customers who keep buying and refer their acquisition to others, fuelling growth. These customers act as brand ambassadors of the company. They tend to facilitate & create conviction in other potential customers to buy the product. They increase the company’s brand reputation by increasing referral flow.

NPS Score

Percentage of Promoter Responses, minus percentage of Detractor Responses, give us the final Net Promoter Score. The Passive Response Score is normally disregarded in NPS calculation. The NPS score can vary from -100 to +100.

What is a good NPS score?

Any score above 0 seems as ‘good’ because it reflects that a business has more promoters than detractors. World over top-notch companies have NPS of 50 and above. In 2018, Netflix had an NPS of 63, PayPal 63, Amazon 54, Google 53 & Apple 49. 100 seems to be perfect NPS where every survey respondent chooses to recommend a company to someone else. Apparently, none of the companies has achieved that so far.

What is a negative NPS score?

Any score below 0 corroborates that the business has more detractors than promoters. A negative NPS is an indicator that a business has some serious problems, which need to be addressed immediately, to improve the situation by trying to reduce the number of unhappy customers and generating more promoters in the company.

Why NPS is important?

NPS is a simple method of brand performance assessment, rather than as a feedback mechanism on an individual transaction. It is also easy to compare. NPS helps you to identify your most loyal customers and use them as the model to build your brand reputation.

NPS helps strategic process transformation in the domains of sales & marketing. If NPS is negative, it indicates that company has least number of loyal customers, which gives a clear indication to enhance customer experience and customer satisfaction.


Aligning your team: Using NPS as a key matrix for sales and customer interface team, the organisation will have enhanced focus on customer experience & customer satisfaction. By doing this, sales get increased in addition to strengthening of strong relationship with loyal customers.

Increase in word-of-mouth traffic: NPS has the ability to measure a segment of customers’ vital for continuous growth. The word-of-mouth accelerates businesses into fast pace growth.

Correct measurement of customer loyalty: Majority of customers across the globe admit to spend more on brands which they are loyal. So mostly promoters want to build customer loyalty through their business model. Sales heads measure customer loyalty as a performance indicator by the analysis of repeat purchase and churn rate.

NPS is very easy to use: The best part of NPS survey is it’s a single question-based survey. It can be easily digitised through simple applications. An NPS survey can be installed on the promoter website using customer feedback software. This way, valuable feedback at different stages of customer experience can be gathered and analysed.

How NPS works in Real Estate?

In western and Indian Real Estate Markets, general experience shows that the customers generally tend to trust the references of their families and friends who have already bought the product from the company in comparison to the agents. Over the last couple of years, western and southern India Real Estate Markets have seen a rapid increase in the end-users’ referral scheme.

Change in Consumer Behaviour

With the frequently changing needs of the customer, the dynamics of marketing of every product is changing. Now in the digital era, every single customer wants to get involved in experiencing, benchmarking and negotiating the product before getting into a buying decision. Seeing the changing buying pattern of customers, NPS seems to be an effective method for predictive assessment of promoters.

Implementation of NPS in Real Estate Sector

Real-estate in India is an unorganised sector. The channel partner plays a very important role with partial involvement of the company in the sales process. On the changing perspective, post pandemic, companies have to adopt active frontline involvement with customers. In order to develop customer-oriented approach, companies need to have productive employees and competitive people strategy. A cultural transformation with a vision to develop customer-oriented attitude of the employees, is the need of the hour. Human Resources (HR) intervention in initiating process orientation, structural transformation, competency-based talent fitment would create a base for growing sales organisation.

Apart from HR, the sales team’s functions need to enforce smart goals and set out strategies to achieve these. The process needs to be standardised and competitive plans must be framed and reframed to map the customer journey and transform that journey into memorable customer experience.

The business paradigm shift needs the company to implement the following –

  • Transparent process for sales.
  • Proficient and motivated sales staff.
  • Propose Employee Value to motivate performers.
  • Training and retraining of staff for proficiency enhancement.
  • Effective customer experience through customer journey management.
  • Legitimate schemes to motivate customers for Reference Sales, Up Sales and Cross Sales.

In order to implement NPS, organisations need to adopt the following perspectives:

Employee First, Customer Second

Employees are the most valuable assets of an organisation. In this digital era, professional organisations will flourish with employee-oriented work culture and effective employee support.

Organisations need to believe on the concept of Employee First and Customer Second. Only satisfied, inspired and proficient internal employees will effectively handle the customer interface, sales & customer experience.

An employee joins an organisation to fulfil his aspirations. The organisation has to fulfil employee aspirations to make the employee passionate about his/her job. HR has to assess the passion factor and connect with organisational purpose. Once the passion and purpose get aligned with the organisational goal, efficiency and effectiveness goes up.

Companies need professional HR CXOs who not only understand the Vision but also align technology with resources to achieve the same. HR has to be proficient enough to identify right talent for the right position. The CHRO must enlist dynamic leadership skill to understand the nuances of the business. He can intervene in transforming the organisational objectives in line with the customer perspective and identify suitable front-line sales leaders who can transform customers’ journey into memorable customer experience. Moreover, the employees need to be trained and retrained to realise the customer expectations, before making the sales offer. The goals of HR and Sales Heads have to be in sync to develop a proficient sales team.

We always quote the IBM philosophy for its internal and external customers, for which IBM is an unbeatable leading brand in the world. IBM believes on the following principles:

  • The individual must be respected
  • The customer must be given the best possible service
  • Excellence and superior performance must be pursued

Consumer Perspective

The sales policies in a real estate organisation need to be transparent for the customer. Processes need to be simple and customer friendly. High customer orientation, loyalty program and effective customer journey management can lead to a convincing customer experience. Once customer experience becomes convincing, customer feels the excitement of buying and pride of referring to others the product from the same company.

Making revenues should not be the only priority of Sales Head of an organisation. Equal weightage is to be given in building customers into brand ambassadors. Attractive schemes need to be announced at regular intervals for repetitive reference sales & high degree of loyalty.

NPS serves as a powerful tool to gauge the degree of satisfaction and loyalty of the customers towards the business. Getting a negative score should be treated as a caution that there are some critical mistakes in the sales process.

Real Estate Industry world over is transforming. With the use of advanced digital platforms, customers’ active involvement in the business has been increasing day by day. Personalised customer experience is the new norm of tomorrow. Now is the time for real estate businesses to prepare the post-pandemic workforce. It will be business-as-unusual. Getting the response right, may be the organisation’s defining moment!

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