Net Promoter Score – How Willing Is Your Customer?

The Net Promoter Score (NPS) is a measure of customer loyalty and satisfaction to a company, reflected by their willingness to recommend its products or services to others. It is shown on an index ranging from -100 to 100. By knowing this numeric value, you can identify the weak points in your customer experience and take measures to fix those. So, companies around the world are using it as a standard benchmark. 

Calculating NPS 

For calculating the NPS of a company, its customers are surveyed on a single question. They are requested to rate on an 11-point scale (0 to 10) the chances of them recommending the firm or brand to their friends, family members, or co-workers. Customers are then categorized into three classes based on their ratings. These include promoters, detractors, and passives.

You will get the NPS score of a firm, by subtracting the percentage of detractors from the percentage of promoters. That is if 60% of the participants were promoters, and 5% were detractors, it’s NPS score will be 55 (60-5).

Importance of NPS

NPS is important as it is simple, user-friendly, easy-to-interpret, and acts as a measure of brand performance rather than as an assessment of an individual transaction. It helps a business in several ways, including.

• Gauging its quality of customer service, specifically in comparison to its competitors. 
• Addressing problem areas, if any, to enhance the customer experience.
• Keeping an eye on loyalty trends.
• Finding your most loyal customers and building your models using them as models. 
• Increasing revenue generation through upselling and referrals. 

How to Create a Reliable NPS survey?

To get a reliable NPS, you need to ask the right people, the right questions, at the right time. Here are some things to consider while creating an NPS survey.

1. Create a relationship survey instead of a transactional survey. The former seeks to investigate the customer’s loyalty to your brand and the latter into his or her satisfaction levels with particular customer interaction. 
2. It is better to ask more than just one question (say, three). This is because, with a single question, you will only get to know their likelihood to recommend your brand. You will not get further insight into why they are more willing or less willing to do so. So, let your questions provide respondents with a predefined list of touch-points.
3. To find out the touch-points, you should map out the user journey and jot down those areas that get the customer traffic. These are your customer touch-points to base your questions on. 
4. Include a comment box where the respondents can include a touch-point that you have not covered. 

Once you come up with a reliable NPS survey, you can send it out through different marketing mediums. The most convenient ones with regards to NPS surveys are SMS and e-mail. 

How Can Businesses Benefit from Using NPS?

1. Making NPS, a key metric motivates your customer-facing teams by giving them a clear and common goal to reach. This will encourage them to work together more closely, and do everything possible to increase your promoters and reduce detractors. Ultimately, you will find a strong and large base of loyal customers, increased sales, and decreased customer churns. 
2. Scoring NPS quantifies your huge word-of-mouth traffic. A vast majority (92%) of consumers say that they trust recommendations from family and friends more than other types of advertising. 
3. It provides solid data on customer loyalty, which is otherwise hard to measure and constantly fluctuates. 
4. It is the only metric that serves as a standard benchmark for the quality of customers. By acquiring quality customers, you will see the number of promoters going up and the number of detractors going down. 
5. NPS helps identify areas for product improvement. If there is a product issue that leads them to give your brand a poor rating, you will find it reflected in your NPS score. So, it can serve as one of your excellent customer retention strategies. 
6. NPS is an effective medium for data collection as it is user-friendly and easy to adopt. It is quick and does not consume much time for the participants. So, many will be ready to respond. Further, it is also cost-effective when compared to collecting customer reviews and conducting focus groups. 

Hope this post has enlightened you on the power of the Net Promoter Score in tracking your customer loyalty. This simple yet incredibly powerful tool can help you tap into the immense potential of word-of-mouth traffic, especially when used regularly. So, do make it a point to regularly utilize this robust metric to assess your company’s performance with regards to customer loyalty. 

Summary: Net Promoter Score (NPS) is a metric for customer loyalty to a company. It is reflected by their willingness to recommend its products or services to others. Businesses should use this simple and user-friendly way to measure their brand performance.