Identify it. Leverage it. Succeed with it.
Net Promoter Score (NPS) is one of the most popular business metrics to gauge customer satisfaction and loyalty. With NPS, you can track customer sentiment and make decisions to improve it — and increase revenue. In this article, we’ll explore NPS and how you can leverage it for success.
What is NPS?
NPS is based on one question: “How likely are you to recommend our company/product/service to a friend or colleague?” Customers answer on a scale of 0 to 10, with 0 being “not at all likely” and 10 being “extremely likely.”
NPS is a simple, powerful tool to understand customers and make changes that improve their experience.
How NPS Can Benefit You
- Measures customer loyalty and satisfaction
- Identifies areas that need improvement, so you can focus on them
- Tracks changing customer sentiments, so you can make decisions to improve loyalty and increase revenue
- Quickly and easily measures customer feedback
- Provides valuable insights into customer behavior, allowing you to make informed decisions
Understanding NPS Meaning and Scale
The NPS is divided into Promoters, Passives, and Detractors. Promoters are extremely likely to recommend the company, product, or service (score of 9-10). Passives are somewhat likely to recommend (score of 7-8). Detractors are not at all likely to recommend (score of 0-6).
Calculating Your NPS
Just subtract the percentage of Detractors from the percentage of Promoters. Example: If 30% of respondents are Promoters and 10% are Detractors, then your NPS is 20 (30% – 10%).
Interpreting Your NPS
A score of 0 to +50 is good; higher than +50 is excellent. The higher your NPS, the more likely customers are to recommend your company, product, or service. A high NPS means you’re providing an excellent customer experience; a low NPS means improvements are needed. Those improvements could be anything from customer service to product quality.
How to Improve Your NPS
Strategies to improve your NPS include:
- Offering excellent customer service
- Making sure your service is of high quality
- Keeping customers informed about changes and new offerings
- Providing incentives for customers to recommend your company, and service
- Responding promptly to customer feedback and making changes accordingly
Difference Between NPS and Other Customer Satisfaction Metrics
Metrics like the Customer Effort Score (CES) and Customer Satisfaction Score (CSAT) are based on responses to multiple questions. NPS is based on just one question: “How likely are you to recommend our company/product/service to a friend or colleague?”
Using NPS Surveys to Gather Customer Feedback
NPS surveys are an effective way to track customer sentiment, measure customer loyalty and satisfaction, identify areas for improvement, and make changes to help improve the customer experience. They should be sent to all customers on a regular basis.
Different Ways to Leverage NPS
Once you’ve conducted an NPS survey, leverage the data to improve the customer experience by:
- Tracking customer sentiment over time
- Identifying areas of improvement and making changes
- Using customer feedback to inform product and service offerings
- Rewarding customers for giving feedback and recommending your company or product
- Using customer feedback to personalize the customer experience
Conclusion
NPS is a great way to measure customer loyalty and satisfaction, identify areas for improvement, and make changes that will improve the customer experience — ultimately, boosting revenue.
Erin MacKenzie is the Vice President of Newbury’s Client Services. She oversees both the Customer Success and Managed Services divisions. Her team works with all Newbury Partners current clients to ensure that brand promise commitments are met, clients realize their investment in services, every client has a voice, NPS scores are high and to create a partnership that continues to grow with each engagement.
Email Erin (erin.mackenzie@newburypartners.com) to learn more about how her team can help you and your organization on setting up your NPS surveys and the value the NPS results can provide to your business. Learn more about Erin To receive future blog posts and content, follow Newbury on LinkedIn
