Net Promoter Score (NPS®) is a proven methodology for measuring customer loyalty through first-hand feedback. Net Promoter Score is a popular customer experience metric because it is simple, effective, and correlated to revenue growth.
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So what is NPS? Net Promoter Score is a customer experience metric that measures loyalty and is predictive of business growth. NPS is calculated by asking an initial survey question on a 0–10 rating scale. Then, the accumulated ratings are graded as one number between -100 and 100. This number expresses how customers perceive a company.
Fred Reichheld, a partner at Bain & Company, developed Net Promoter Score in 2003 after analyzing how traditional customer satisfaction survey questions correlate to consumer behavior. The carefully phrased survey question, “How likely are you to recommend [company] to a [friend or colleague]?” is now utilized by millions of brands.
NPS provides a score, ranging from −100 to 100, that serves as a report card, grading your overall customer experience. Customers are segmented into three groups (promoters, passives, detractors) according to their numerical response to the 0–10 rating question.
Your NPS numerical score is the percentage of promoters minus the percentage of detractors.
71 − 14 = 57
So, what is a Net Promoter Score grouping and what do the different groupings actually mean?
“I really love your product. It’s exactly what I have been looking for!”
A promoter is often a loyal customer who will go out of their way to follow your brand and recommend your products or services, often unprompted. They are willing to put their personal reputation on the line for it.
“It’s pretty good. I had a few issues here and there, but it got the job done.”
A passive probably liked your product or service, but it wasn’t a slam dunk. They may mention it in the right context, but they are unlikely to personally vouch for it as the best available product in the marketplace.
“I wasn’t able to get it to work. I tried for hours. This is so frustrating!”
A detractor will proactively take any opportunity to dissuade people from using your product or service. They often speak louder than promoters, and can have a highly negative impact on your overall NPS score.
Understanding how Net Promoter Score groupings come together can help you grow.
You can have a positive or negative Net Promoter Score, meaning that your promoters either outnumber your detractors; or the worst case scenario – your detractors outnumber your promoters. Your NPS score gives you a high-level view of that balance, so you proactively strategize on how to keep your company on track.
Promoters are more likely to stick with you for the long haul, while detractors are more likely to churn or spread negative word of mouth. Passive customers are the wild card – they could go either way. NPS-based customer segmentation helps you identify all types of customers so you can follow up with them to improve your business.
Now that we’ve gone through the NPS definition and its value in-depth, let’s walk through how you can use the Net Promoter system for your business.
Collect verbatim feedback from happy and unhappy customers alike.
Net Promoter Score is comprised of a carefully crafted single-question survey. Customers answer this question in two parts. The first part is a 0–10 numerical rating. This provides a standardized quantitative benchmark that can be tracked over time and compared to others in your industry.
Respondents are able to explain their rating in the second part of the survey: a free-form follow-up question. This is where the real power of the Net Promoter Score system reveals itself. It allows the customer to provide context for their rating in their own words, free from any bias that targeted survey questions might impart.
Your Net Promoter Score survey can be distributed through a variety of methods – email, link, or on your website. Most companies find it helpful to have a dedicated NPS software to deliver the survey automatically after the customer has had a full experience of the brand. These platforms also help tally the responses and calculate your NPS score.
What is Net Promoter Score in relation to tracking? Your score allows you to quantify how changes you make to your product or service affect the customer experience over time.
Unexpected shipping delays
Improved response time
While the score itself gives you an easy way to know where you stand with your customers at a glance, the true value of Net Promoter Score comes from the customer feedback. Analyzing and acting on survey feedback insights is what will continue to move your business forward.
Traditional surveys bias feedback to what the company wants to hear, not what the customer wants to say. Net Promoter Score passes the microphone to the customer, so they can validate or course-correct your business decisions.
“I am so glad I found you guys. I have been searching for the perfect gift for my grandmother and this is PERFECT! This will mean so much to her. It’s like you read my mind!”
Language is rich with “between the lines” messaging. Emotion and nuance are lost when customers are forced to choose from a selection of pre-defined answers that sterilize feedback. Net Promoter Score lets the Voice of the Customer permeate your organization and drive change.
“You have some REALLY cool hidden gems, but I have a really hard time finding them. I know they are there, but after a 12-hour workday, I just don’t have the patience to go searching.”
When Net Promoter Score is fully integrated into your organization, it creates a perpetual cycle of product and customer experience improvement. As trends emerge, your teams can address them quickly, and immediately measure the impact they have had, in very human terms.
“I was disappointed to find that your packaging was not compostable or biodegradable. What a shame! I can’t recommend any service that does not respect the environment.”
Net Promoter Score is easy to understand, easy to share, and is a clear way to align organizations around the customer experience.
Regardless of your size or industry, Net Promoter Score is a great way to understand your customers. Connect with shoppers after their order arrives, identify why customers choose your software over competitors, or get feedback from hotel guests after their stay. The metric works with your needs.
For most companies, feedback arrives via the relatively small percentage of people who contact customer support for specific issues. Everyone has a story, and the vast majority of stories go untold. Net Promoter Score surfaces feedback from people who you would have not otherwise heard from.
Your detractors are unsatisfied customers who are at risk of leaving you for a competitor. Recurring Net Promoter Score surveys provide you with the feedback necessary to turn their experience around and monitor customer health to see if your changes are making an impact.
Your happiest customers can also be your brand evangelists. Identify your promoters through Net Promoter Score surveys and ask them to review you on 3rd-party sites or participate in case studies to keep your reputation strong and advocate for your brand.
“Everyone at Bonobos needs a direct line to customers for feedback. I know that due to Delighted, we avoided disaster.”
“Every time we open up Delighted we find a new way to improve, which at the end of the day is why we are doing this.”
“You need users’ thoughtful, raw feedback to correct and improve experiences for all customers in the future.”
Net Promoter Scores help businesses across all industries to gather feedback quickly, develop a strategy for improving experiences across the customer journey, and as a result, increase their brand loyalty and revenue for long-term success.
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