The ever-changing marketing and business landscape requires companies to effectively track and analyze data to make the necessary improvements and adaptations. The net promoter score is an important metric in measuring and analyzing customer satisfaction and overall customer loyalty.
If you want to capitalize on the insights that the net promoter score can offer you, learning beforehand is definitely a good idea. In this article, we will shed some light on what the net promoter score is, why it is so important, and how you can survey your audience to create valuable judgments based on it.
What Is Net Promoter Score?
The net promoter score, or NPS for short, is a metric used to assess customer enthusiasm, satisfaction, and loyalty to a brand.
Unlike other customer satisfaction metrics that may incorporate a range of questions covering various aspects of service and product satisfaction, NPS simplifies this by focusing on a single straightforward question: “How likely are you to recommend our company/product/service to a friend or colleague?”
This simplicity allows for easy interpretation and benchmarking, making it a powerful tool for gauging overall customer sentiment and loyalty.
One of the most common ways of obtaining information on customer attitudes is through a survey or questionnaires.
As a company metric, NPS aids organizations of all sizes in focusing on raising their net promoter score by gaining more passionate clients who are willing to recommend the company to others.
Furthermore, NPS stands out because it directly correlates with a company’s growth potential and customer retention rates, providing clear and actionable insights that can drive strategic business decisions.
Key Takeaways
The net promoter score is a term for an important metric that measures overall customer satisfaction and enthusiasm toward a product or service;
A key advantage of having access to an accurate net promoter score is the ability to introduce changes that can positively impact business performance and customer experience;
A good net promoter score will highly depend on the industry your company is doing business in, as well as the country it is operating in. Customers are much more likely to give higher scores in certain countries, due to the overall culture in that region.
How to Define Net Promoter Score?
The NPC gauges how likely customers are to suggest a business’s products or services to others. It achieves this by asking customers how likely are they, on a scale of 0 to 10, to tell a friend about the product or service.
Calculating the net promoter score is a matter of assessing the customer’s likelihood to recommend your company on a scale of 0 to 10. This is achieved by sorting responses into three major categories:
- detractors (0–6);
- passives (7-8);
- promoters (9-10).
The final step is to get your total NPC by subtracting the percentage of Detractors from the percentage of Promoters. The calculation can be represented by the following formula:
Net Promoter Score = (Number of Promoters/Total Number of Respondents) – (Number of Detractors/Total Number of Respondents)
For example, if 1000 customers answer your survey, and the results show 500 promoters, 100 detractors, and 300 passives, your overall net promoter score would be 40%. The calculation would be simple:
50% (promoters) – 10% (detractors) = 40%
Why Is Net Promoter Score Important?
The net promoter score is a highly valuable metric for all sorts of companies. Businesses must be able to accurately assess how clients feel about the organizations they interact with.
1. Immediate feedback for improvement
NPS pinpoints specific areas needing enhancement by directly asking customers how likely they are to recommend the company to others.
This feedback helps identify both strengths and weaknesses in a company’s offerings, allowing for targeted improvements.
2. Predictive indicator of growth
A low NPS indicates that customers might not recommend the business, which can be an early warning of potential churn.
Understanding the reasons behind a customer’s unwillingness to recommend a company provides an opportunity to rectify issues before they impact a larger segment of the customer base.
3. Enhances customer retention strategies
By tracking changes in NPS over time, businesses can gauge the effectiveness of customer service improvements and new product introductions. This ongoing measurement helps companies to create better strategies for increasing customer loyalty and reducing turnover.
These aspects make NPS an invaluable gauge of customer sentiment, directly influencing a company’s strategic decisions and long-term success.
What Are the Best Net Promoter Score Strategies?
The best ways to get to the genuine opinions of your customers will largely depend on the type of your business and where the majority of your target audience is active. Nevertheless, here are several different ways to conduct a net promoter score survey, one of which might just suit your needs the best.
1. Website survey
You can gather customer feedback while users are still browsing your website by using pop-up surveys. You can also configure the NPS questionnaire to ensure that it shows up on your primary conversion pages. Alternatively, you can start a survey just before visitors leave the web page.
2. Email survey
Email surveys demand a little more effort from the customers, but they might be the best option for your business if you don’t direct traffic to a specific website. An email survey also enables customers to reply to you on their own time instead of taking immediate action to a pop-up.
3. Transactional or relationship survey
When it comes to the types of surveys you can deploy, two major forms stand out. A transactional net promoter score survey triggers at a specific customer touchpoint, whereas a relationship NPS is sent regularly every few weeks or months.
4. In-app survey
Implement NPS surveys within your mobile or web apps to capture immediate feedback from users during their interaction with your product. This method is especially effective for digital services, yielding high response rates and accurate insights.
5. Social media surveys
Conduct NPS surveys on social media platforms to engage with a responsive audience in a familiar setting. For example, through Instagram stories. This approach is ideal for brands with active social media followings, facilitating easy participation and candid feedback.
While transactional NPS provides immediate insights into customer attitudes, the relationship one paints a clear picture of overall customer satisfaction.
Additional Tips & Tricks
- Pay some extra attention to your passives. Passive customers can be converted into promoters with an improved customer experience, but ignoring them may turn them into detractors;
- An accurate NPS is the product of a well-executed NPS survey. Think about where your customers spend most of their time and choose the appropriate survey method;
- An employee net promoter score is the traditional NPS applied to the employees of a company. Employee benefits, a good work environment, and many other factors can help improve this metric.
The Bottom Line
The net promoter score is a metric of customer satisfaction and loyalty that companies can track with an NPS survey. Its results give valuable insights into the overall customer experience, allowing companies to make the necessary changes to turn unhappy customers into happy ones.
Today you’ve learned what is the net promoter score and why it is important for a company. We have also provided a few strategies for NPS survey execution, and you’ve got a few tips & tricks in your pocket. Now you are ready to take all this knowledge and use net promoter score as the metric to analyze the content and loyalty of your customers.
Net Promoter Score FAQs
Improve your NPS by addressing customer feedback, enhancing customer experience, providing excellent support, and continuously innovating your products or services.
The net promoter score provides valuable information in the form of an overall customer experience assessment. Customer experience is an important predictor of future loyalty, and it can be improved in many ways depending on the type of business in question.
Analyzing NPS responses can be done according to several different categories. The best practices in the analysis of NPS responses include categorizing the responses into detractors, passives, and promoters, as well as conducting an analysis of NPS responses based on demographic data.
A good net promoter score for your company will depend on the industry you are doing business in, as well as the culture of the country you are located in. An average net promoter score in your industry may be an excellent NPS for another industry or country. Overall, an NPS around 50 and up is considered to be excellent.
Yes, Net Promoter Score (NPS) is a Key Performance Indicator (KPI). It measures customer loyalty and satisfaction, providing valuable insights into how well your business is meeting customer needs and predicting potential growth.
