What if we told you there was one number to help your brand succeed and your business grow?
Wouldn’t you want to know the equation to help you unlock this powerful number?
It’s easier than you think.
We’re talking, of course, about the Net Promoter Score and System (NPS), an index by which businesses can gauge customer satisfaction and loyalty. This metric was created by Fred Reicheld and introduced in his 2003 Harvard Business Review article “The One Number You Need to Grow”.
The secret to establishing your customer loyalty index, Reicheld explained, lies in the answer to a fairly simple question, a question found on many existing customer satisfaction surveys: “How likely are you to recommend us to your friends and family?”
Net Promoter Scores are then established based on the criterion that each one of your clients falls into one of the following categories:
Promoters are devoted customers who will support your causes and go to bat for you at any chance.
Passives are happy customers, sure, but not so fervent or vocal about your brand as your promoters. They are often lured away by the promises and temptations of your competitors.
Detractors, for whatever reason, are averse to your brand or find themselves dissatisfied with your services or products.
By assigning each of these categories with a score, or number, you’re able to identify where on the loyalty scale your customers fall, from 0 to 10, and monitor the efficiency of interactions with your clients. You will also be able to benchmark goals for extending outreach and customer recruitment, as well as find clever ways to leverage your promoters in order to achieve brand advocacy.
What’s Your Net Promoter Score?
A Net Promoter Score is a scale that ranges from -100 to 100 and measures how willing your customer base is to recommend your services to their friends or family. Here’s how you calculate it:
To the question, “How likely are you to recommend us to your friends and family?” responses with a 9 or a 10 are promoters, 7-8 are passives and 0-6 are your detractors. To establish your Net Promoter Score, the percentage of detractors is subtracted from the percentage of promoters.
Let’s say your business has 75% promoters, 15% passive, and 10% detractors. You would simply subtract your percentage of detractors from your percentage of promoters in order to calculate your Net Promoter Score.
75% – 10% = a Net Promoter Score of 65.
Your Net Promoter Score is an amazing metric for calculating customer loyalty. Namely, it narrows the scope by which a survey participant can consider their satisfaction by basing their placement within your set scale on their answer to one question: the probability of referring your business to their loved ones.
This allows you, as the business, to determine how you’re performing through the eyes of your customers. You get a clear visual representation of the customer’s response. If you’re gathering a multitude of 10s, your customers probably feel as though they are crusaders for your company. 0s in the mix? You may need to return to the drawing board because you’ve got some pretty unhappy customers on your hands.
Let’s further explore how each response is categorized:
- Promoters are your most faithful and frequent clients. They can lead new shoppers to your door and persuade less enthusiastic customers to make more purchases. The more promoters, the better!
- Passives are happy, fairly frequent customers, but they’re not particularly loyal to you. Their shopping patterns are dictated by convenience and, frequently, price. As a result, when your competition makes an alluring offer, these folks will most likely jump ship and seek out the other guy.
- Detractors are unhappy customers that will likely make future purchases with your competitors. Because they’ve experienced your brand in a less-than-great light, they’ll speak ill of you to friends and maybe even post negative remarks about you on social media and online review sites.
Remember: You don’t need to ask this one simple question and leave it at that! You’ll want to know why your customers fall into the category that they do. So allow them to provide further explanation by way of an open-ended follow-up question. This information will give you a clearer picture about what your company is doing well and where you have room for improvement.
3 easy steps for finding your Net Promoter Score
Step 1: Set up a survey
You’ll want to start by setting up a survey which asks the all-important question, “How likely are you to refer?” with the corresponding scale from 0-10.
Ideally, your survey should also attempt to pinpoint why the respondent gave you the number they did. But save the length for another day! You’ll be surprised how many more responses you can gather by keeping your surveys simple and succinct.
Step 2: Distribute the survey
After establishing your survey, the next step is finding customers to participate and provide answers. There are several distribution tactics you may want to consider, but the simplest and most straightforward avenue is through email.
You probably already have an email subscriber list in place. Turning to this collection of addresses is a no-brainer when it comes to getting information in the hands of your clients. You can analyze how the email is faring (amount of opens, click-throughs, etc.) and make small changes as you see fit to increase those numbers.
(Check out: 4 Secrets to Collecting Email Addresses)
While you may be tempted to do a mass email campaign for survey responses, studies point toward transaction-responsive email as the best way to get the most accurate information and the highest number of respondents. Additionally, by sending one-off emails triggered by a transaction, a business reduces the likelihood of its message being categorized as spam.
You could also embed your survey onto your website or have it appear as a pop-up. This has the added benefit of maximum exposure and will definitely get attention from your site visitors.
Another idea is to turn to social media to get the word out there about your survey. This can be accomplished with well-timed tweets and sponsored (paid) posts.
However you decide to distribute your survey, make sure your language is clear and that the act of responding is as simple and painless as possible. Promote participation with alluring explanations and promises about how little time it takes. (“It only takes 1 minute to complete our new survey.”) And you could always incentivize if getting feedback is proving especially difficult. You could extend entrance to a giveaway in exchange for participation or a special coupon code to be found at the completion of the survey.
Step 3: Analyze results
As the results start rolling in, use the feedback and analyze your results. What ratings did your business receive? Based on how you fared, there are a few next steps you may want to think about. Most importantly, if you secured mostly Promoters and Passives, how can you leverage these individuals to help grow your reach? How can you turn your respondents ranking you on the high end of the spectrum from Promoters to Brand Advocates?
If your results weren’t what you’d expected, and your proportion of detractors was quite high, how can you convert this information into actionable items that will improve your customer’s perception of your brand? Do your customer service policies need an overhaul? How can you make it right? What changes do you need to make in order to increase customer retention?
Meet the Promoters
Based on a survey designed to define true brand advocates using NPS methodology, the following characteristics of promoters were uncovered:
- They follow their favorite brands on social media to stay up-to-date about new products, offers, and news.
- They’re extremely active on Facebook (logging in at least once a day).
- They let brands know when they’ve done a good job.
- They’re more likely to follow through with a brand recommendation from an online source than a face-to-face source.
- They’re more likely to be female than male and are between the ages of 30-44.
Below you’ll find a chart detailing the 2013 Net Promoter Industry Benchmark report for the financial services, technology, online services, retailing, travel, hospitality, insurance, and telecommunications industries. Included are the Top 10 highest ranking Net Promoter Scores in these industries.
Note that, among these ten brands with high NPS, only one offers a value/price-based strategy (Southwest). All other brands focus on quality and consistency in product and the ways in which they serve the customer. If you are getting ready to implement a constant improvement program, it’s wise to study the way these corporations interact with their most valuable customers.
Do loyalty and reward programs increase NPS?
This is a common question and one that is not easy to answer. A strong loyalty program can serve as a transitional tool when a business has concerns regarding quality. At the end of the day, rewards aren’t the thing that encourages customers to keep coming back. Customers come back when a business consistently meets or exceeds brand promises.
Where does “Brand Advocacy” fit into the NPS equation?
That’s simple: Net Promoter Score helps you leverage your promoters by turning them into stellar brand advocates.
We already know promoters are more likely to refer your business to their family and friends but they’re also more likely to:
- Take you up on new offers
- Upgrade to higher end items or services
- Establish themselves as consistent shoppers for years to come
In terms of brand advocacy, your NPS score is the perfect gauge, letting you know when customers are feeling especially favorable towards you, and giving you clear indicators of which individuals will advocate strongly on behalf of your brand.
Use NPS to measure brand advocacy
Perhaps you believe locating advocates for your brand is an insurmountable hurdle, but it doesn’t have to be.
One of the critiques of setting up NPS surveys is that once you have a score in hand, it’s just that: in hand. There’s no built-in actionable next step. Some lament the rat race that ensues from simply seeking a higher score. What these criticisms of NPS fail to consider is the possibility of using it for brand advocacy.
Turning your promoters into advocates is an easy step to take once you’ve secured your Net Promoter Score. You’ve already identified your promoters with the help of the survey. You know these folks are pleased with and excited about what your brand brings to the table.
Are Your Products or Services Shareable?
If you are hoping to unleash the power of your promoters and turn them into referral machines, you need to make sure that they have access to products and services that are shareable.
Take a moment to assess if your brand is photogenic, if your packaging is appealing, and if your concepts trigger the desire to brag. Customers are far more likely to talk about your brand if what you have to offer is not only functional but it is also aesthetically pleasing.
Think, for example, about the way consumers are inclined to share food photography displaying their latest meal experience. If your plating is photogenic, you increase the likelihood of a share, while also spiking interest and appealing to the palate of those that see the image.
Usually, you implement surveys to bring to light certain items you may not have been aware of. In the case of NPS, it’s how likely your various customers are to refer you to their family and friends.
However, it is also possible to use Net Promoter Score surveys to reinforce positive customer experiences. The key is timing.
Consider asking your customers for survey participation once they’ve arrived at a major benchmark moment in their relationship with your brand. Think: making a large online purchase, opting in for membership, or initiating a major service upgrade.
In this way, customers’ feelings about your brand – the same feelings that caused them to make this new brand decision – will be reinforced, and they’ll be in the perfect state of mind to identify themselves as a promoter.
Now you have a satisfied, spending customer. You also have a brand advocate. They have acknowledged their willingness to promote your brand to their loved ones. But how do you make sure they actually do so?
Your promoters are probably extremely busy. They may say they’re inclined to do the legwork promoting and recommending your brand. But they may not always remember. So assist them with the next step. Make it easy. They’ve already made it clear how much they would love to help. At the same time, don’t be reluctant to provide them with a little guidance.
Actionable items to ask for when a customer rates you at 9 or 10:
- Yelp review
- Sign up for email subscription
- Facebook “like”
- Tweet their rating, comment, or feedback
Remember: you can create customer loyalty programs that respond to the specific needs voiced by your survey respondents. This is a more time-intensive way of reinforcing your customer’s existing beliefs but the benefits will keep rolling in for years to come.
Empowering Brand Advocates
Leverage scores with next steps
Consider the following: after receiving amazing customer service on the phone with a new-to-you company, your inbox pings with a new message. You open the email and are greeted with a question from that very same company: “How likely are you to refer our company to others?”
Fresh off a phone call with one of their employees, who not only solved your issue but did so in a friendly way, you click your mouse on that 10 in lightning speed. But then: nothing else happens.
It’s as if your stellar rating was whisked off into the ether never to be heard from again.
Sounds like a wasted opportunity doesn’t it? On top of rating the brand a 10, you probably would have also signed up to receive email notices of new offers. You could have been encouraged to tweet about your positive interaction for all your followers to see. Maybe you would have even shot an email to your co-worker who was, just the other day, looking for a service similar to what this company offers.
The lesson here is obvious — Don’t waste these key introductory moments with your promoters. It is in these moments which their readiness to refer can become an actual referral.
Don’t just ask if customers would refer; ask them to do so
According to writer and lecturer Dale Carnegie, 91 percent of consumers pronounce a willingness to make referrals but only 11 percent of business associates will actually ask them to do so.
This runs completely counter to the cultural climate we’re living in. In our social media-driven world, people are always sharing and interacting with the brands they feel most connected with. Many are fast to explain ways in which new items are improving or enhancing their lives.
If these people are already in your corner, don’t just confirm if they would refer; ask them to do so! Offer next steps, ask them to join a referral program, or enlist them as a brand ambassador. Be explicit and make the ask.
Make referrals easy
Finally, the act of referring your brand to others should be as easy as possible for your brand advocates. In doing so, your considerations should be two-fold: 1.) Your brand advocates should find referrals easy. 2.) Your brand’s management practices for keeping track of brand advocates referrals should be easy, too.
Unlock the Power of Friends & Family
Any marketer will tell you that there is a significant risk in brand dilution when a business incorporates strategies based on discounts, coupons, and promos.
However, there is a time and place to introduce a discount in a way that protects the brand and its value. Limited promotions with unique coupon codes made available to your best customers (promoters) can result in significant gains as well as the ability to connect with high-quality leads that walk into a business relationship with the added advantage of trust.
If this is an avenue that you decide to explore, measure the performance of your customer transactions against the overall NPS score of your organization. Chances are, those customers will score higher than the overall average.
Once you’ve garnered a high score, enlisted the survey respondent into action, and established a committed brand advocate, do everything possible to make this customer’s referral process as easy as possible. Streamline the process. Allow their invitations to others to occur through whatever means they find most comfortable and enjoyable.
Would they like to send an email, post a review on Yelp, invite friends to “like” your page on Facebook, or recommend you on LinkedIn? Set systems in place that allow you to follow their progress.
By making this process as simple as possible, you’re guaranteeing consistent action but also maintaining your advocate’s feelings about your brand. If the referral process becomes a burden to your promoters, you run the risk of turning these useful customers into passives or even detractors. Tread carefully and make sure you are able to cultivate a lasting relationship with your most positive promoters.
Brilliant marketing minds are constantly creating, implementing, and tweaking a successful customer experience strategy, and early intervention in the customer experience funnel is among the top priorities. Customer success specialists often begin the process by asking thought-provoking questions like:
- What if I could capture customer sentiment earlier, when their experience is easier to recall?
- How much of an impact would there be if I measured before the customer has had an opportunity to escalate shortcomings in their experience or commiserate with other customers?
- What if I were proactive enough to reach out to them before they posted a negative online review? What would the compound effect be for other customers?
Let’s take step back.
When customers find barriers to escalating or resolving an issue, they are compelled to express themselves on a public forum, usually on social media or review sites. Enabling a direct route of communication immediately after a transaction is one of the most effective tactics for safeguarding your business reputation and building customer loyalty, while simultaneously learning more about customers needs and expectations.
Get Customer Feedback Quickly and Effectively
Successful marketers and customer success specialists have been utilizing the Net Promoter Score as the go-to customer feedback tool to connect quickly and efficiently with their customers. The simplicity of this well-known survey methodology allows for businesses to effortlessly capture information that matters. One question rated on a 1-to-10 scale, paired with an optional free text space to elaborate on a response, can empower a business to handle customer issues with a short turnaround, while obtaining a solid understanding of the overall customer sentiment.
One Simple Question
One of the most important aspects of any survey is statistical validity. Because of its simplicity, the Net Promoter Score often receives a high response rate across all industries. Many companies enjoy an engagement rate of over 95 percent, with most receiving an average engagement rate of 75 to 80 percent. The more respondents willing to engage with a survey, the more likely you are to secure data that is useful, quantifiable, and accurate.
In addition to this high response rate, the NPS is also attractive because it can be deployed to a large sample, and in some instances pushed to 100 percent of all customers engaging with your business.
Finally, for a Net Promoter Score to be usable as a tracking tool for the health of your business organization, you must capture samples consistently to be able to compare progress across a chronological line.
“The more respondents willing to engage with a survey, the more likely you are to secure data that is useful, quantifiable, and accurate.”
Accurate metrics equip you to refine your customer experience and customer loyalty strategy in a way that maximizes every asset and opportunity available to your business.
1. Use NPS to identify your best customers, and better hone your marketing demographics.
One of the main uses for a Net Promoter Score is as a filter to select the customers who are most likely to have repeat engagements with your business or brand.
By surveying all customers, a business is able to identify which customers have a high level of satisfaction, and whose response to marketing materials is likely to trigger behaviors such as sharing promotions across their social networks, be more willing to submit a formal testimonial, or simply participate directly in a higher spending category by visiting a business more often.
Isolating and pitching to these specific promoters (those who rate their likelihood to recommend a business as a 9-10) results in increased business and message amplification.
A well-crafted promotional campaign for customers who fall in the promoter category is sure to drive loyalty among the most desirable and profitable customers. Take time to create engagement opportunities for those special customers who are willing to give you the thumbs-up and let their friends know that your business is totally worth a try.
2: Net Promoter Score is a holistic health assessment for all customer interaction with a business.
When a customer is presented with the central question of the NPS (Would you recommend this business to a friend or colleague?), they are providing a snapshot but capturing a panoramic view of the health of your business. After all, without the fresh inflow of new customers, a business in capable of surviving. This loyalty question represents the ability of a business to remain stable without the influence of any factor outside of loyalty. As long as your customers remain loyal, your business will survive.
Through the comparative analysis of your Net Promoter Scores over time, you can evaluate the impact of specific initiatives designed to improve the customer experience, drive loyalty, and increase overall retention rates. This is a lot of data from one simple, yet powerful question.
3: NPS is a great early-alert system, and can save your business from issues that are paining your customers. Once implemented, an automatic post-transactional NPS survey can proactively alert you to factors in your business you may not be aware of, and can help you avoid a painful call out on a review website or negative social media blitz. You stand a really good chance of being the first to know when something has gone wrong in the customer experience, and can personally reach out to rectify the situation.
A detractor score paired with the feedback specific to the customer experience gives you an opportunity to immediately reach out to the customer, and make amends that will possibly result in a complete perception turnaround and will set the stage for a second chance to delight the customer in question.
4: NPS is granular where it matters most, and not only will customers be able to answer the Net Promoter Survey in just seconds, but those who want to voice a concern also have the option to provide detail-rich customer feedback which can be a treasure-trove of helpful insights for any business willing to listen.
The granularity of a free-text response empowers a business to provide a highly personalized remedy to the concerns escalated by the respondent. Knowing exactly what took place and how it impacted the customer experience will result in a better, more intelligent resolution aimed at getting the customer to fall in love with your business again.
But there is a caveat…
Having NPS in place is a highly effective way to give yourself the opportunity to right the wrongs, but keep in mind that customer feedback tools are only as good as your ability to use them and respond quickly, specifically in a customer-centric and solution-driven fashion. These are the customer feedback expectations in the mobile-everything 21st century.
Once the customer has been surveyed and the feedback indicates a sentiment of detraction, you must get the ball rolling and immediately and proactively address the issues voiced in tandem with the NPS score.
There is a direct correlation with the speed of resolution and the likelihood that the customer will perceive you as an organization that cares and whose team is worthy of a second opportunity. If you are in the driver’s seat of your online reputation or loyalty program, then set a service-level agreement for escalations associated with detractors, and stick to it like gospel.
One Last Thing
The NPS is only as good as the strategy and follow-up you implement in response to the results and trends measured by it. Take a moment to assess how you are maximizing the opportunities that this tool affords you. After you implement, follow up with the detractors and let them know you appreciate their feedback and have leveraged it to improve your business. This is making best use of the data available, and finding ways to shape your business to exceed the spoken and unspoken needs of your customers.