Net Promoter Scoring (NPS) is one of the most widely used management tools for companies looking to gauge customer loyalty. It’s a powerful way to get holistic, rich insights, quickly understand customer trends, and prioritize areas of opportunity to influence business growth.
If you currently don’t have a way of figuring out where your customers stand, we highly recommend incorporating Net Promoter Scoring into your organization’s customer experience management strategy.
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How to Calculate Your Net Promoter Score
First introduced by Frederick Reichheld in his 2003 Harvard Business Review article, the Net Promoter Score survey methodology is one of the most popular customer satisfaction metrics utilized by organizations today.
Using NPS means asking the question: “On a scale of 0 to 10, how likely is it that you would recommend our company, product, or service to a friend or colleague?”
Based on the responses, you’ll be able to categorize your customers into Promoters, Passives, and Detractors.
- Promoters (score 9 to 10) are very satisfied customers and loyal enthusiasts who can help fuel your company’s growth by buying and referring others to your business.
- Passives (score 7 to 8) are also satisfied customers, but their lack of enthusiasm renders them vulnerable to offerings from the competition.
- Detractors (score 0 to 6) are dissatisfied, unhappy customers who may impede your growth and spread negative reviews about your company.
To calculate your Net Promoter Score, simply subtract the percentage of Detractors from the percentage of Promoters.
Here’s how you might calculate NPS based on example responses:
Benefits of Net Promoter Scoring
The NPS methodology is easy for everyone within your organization to apply and understand. It’s also simple, user-friendly, and inexpensive to implement.
You can organize data about your customers based on their category and track the score over time, so you can benchmark it and see how well you’re doing as you evolve.
Another benefit of Net Promoter Scoring is that it enables your organization to identify and activate brand promoters. These are customers who had a positive experience and are therefore potential brand advocates.
According to customer reviews research, 28% of customers are likely to leave a review after a positive experience with a company.
This means that the respondents who gave you a perfect 10 in the NPS survey are also the people likely to talk positively about your business on Facebook and Instagram, or leave 5-star online reviews on your Google My Business and Yelp business listings.
In short: these are the people whom you should engage with to improve the visibility of your brand and support your word-of-mouth marketing strategy.
What Else Should I Know About NPS?
One of the limitations of Net Promoter Scoring is that, for larger organizations, it may be too simplistic of a metric. While a basic NPS survey helps your team understand which customers have had a positive, neutral, or negative experience, it won’t necessarily give you the underlying reasons why.
The methodology works best if paired with a more comprehensive customer feedback system or customer experience analytics program. Enterprise brands with multiple business locations that utilize NPS software often add follow-up questions to investigate the customer experience in greater detail.
Best Practices When Using NPS Surveys
Respond to customer feedback. You can’t remain silent. You have to listen to and acknowledge the Voice of the Customer. At the very least, say thank you to those who responded to your NPS survey to voice their opinions and share their experiences.
One report says approximately 8 in 10 consumers think that responsive businesses care more about them than companies that do not at all respond to customer feedback.
Survey to gain insights, not just to collect data. Net Promoter Scoring can provide you with the information you need to improve business performance. To uncover its real potential, be sure you analyze the unstructured data and ask follow-up questions as part of your NPS management efforts.
These questions are needed to help you understand and gain insights into why customers do or don’t recommend your company. These insights will then give you actionable direction for change and improvement.