STAMP's Impact on the STAMP Score
Since launching the STAMP assessment tool a few years ago, we've been analyzing the data, building benchmarks, and evaluating how our customer segments compare in terms of performance and overall sentiment. After building, launching, and collecting the data from several thousand STAMPs, we tracked repeat clients over the years and are now able to quantify the positive impact that STAMP has had on our client base.
You may remember our blog post a few weeks back on the newly introduced STAMP Score. If you don't recall, I highly recommend that you give that article a quick read. As a quick recap, the STAMP Score is our own calculation of risk of customer churn that is much more telling than your standard Net Promoter Score (NPS). Instead of the NPS scale of Detractor, Passive, and Promoter, the STAMP Score visualizes how much at risk is your relationship with a particular constituent. In other words, how likely is your constituent to cut ties with you and end your business relationship?
Here's an easy scale to visualize the STAMP Score:
First, we looked at customers who have used STAMP over multiple cycles. Next, we applied the STAMP Score to all of STAMPs conducted for this customer set since launching the platform in 2018. Finally, we analyzed the data and evaluated how the STAMP Score has progressed over time. The results are exciting!
Note: All numbers are a percentage of the total for the specific year.
Across all risk cohorts, we're seeing a significant improvement in STAMP Scores. Since 2018, the number of Medium to Extreme Risk accounts are on a steady decline. As more of our clients are utilizing and acting upon the feedback generated through STAMP, their constituents are leaving the riskier cohorts and moving into the low or no risk cohorts. The percentage of STAMPs in the "No Risk" category has more than doubled between 2018 to 2020 YTD, increasing from 26.32% to 53.12%!
This is excellent news for our clients! Not only is STAMP critical to understanding how well our clients are delivering on what is most important to customers, it is actively playing a role in reducing risk of churn and driving higher retention rates.
In a previous article, "Why Companies Under-Invest in Retention & Take Retention for Granted" we noted that "a mere 5% increase in retention can generate an incremental 25-75% in net income." So, the question you should be asking is, "If my company saw this degree of a reduction in risk of churn, how much more net income would be generated?
Keep in mind, the significant improvement that we're seeing includes numbers from 2020 year-to-date, meaning this is also factoring in the COVID-19 outbreak which began in late January. In this dire time of need, STAMP clients are doubling down on their efforts to retain, as new customer acquisition is proving more difficult. So we anticipate our clients will be much better off at the end of this pandemic than their competitors who are not utilizing a Client Retention Automation tool, like STAMP.
As our way of giving back during this pandemic, we have put together a COVID-19 specific STAMP for you to utilize at no cost. You can read more about what it entails in our article "2-Way Communication Is Critical During This Coronavirus National Emergency". Simply give us a call at 312-397-1111 or send us an email at email@example.com and we'll be happy to answer any questions and set you up for success!