What Is Net Promoter Score? (NPS)
Net Promoter Score (NPS) Explained
Put simply, NPS is a simple way of understanding how your customers feel about your organisation by asking one simple question: would they recommend you to others? By asking this question it’s possible to get a sense of the likelihood of your existing customers continuing to purchase goods and services from you. If they are willing to recommend you to others, they are more likely to continue to purchase. If they would not, or even if they seem fairly ambivalent towards you, they are less likely to use you again.
Promoters - These are customers that will actively state that they are happy dealing with you. They may well promote your organisation to others they come into contact with. Typically, promoters will leave a positive review about you is asked.
Passives – Whilst you have probably delivered good service to these customers, Passive customers just don’t feel strongly enough to go out of their way to recommend you. They are almost neutral, but even if they feel positively, the score isn’t high enough to warrant action.
Detractors – These customers have experienced a level of service, or received a product, that does not meet their expectations. It could be that the product is great, but the after sales care was poor. Or they were happy with the relationship, but they are unhappy with what they received. Whichever it is, Detractors are making the effort to actively state that they would certainly not recommend you to others.
How To Calculate NPS
In the question ‘how likely are you to recommend our business?’, the respondent is asked to rate the answer on a scale of one to ten. Based on the response, the respondent is categorised as follows:
- 0-6 - Detractors
- 7-8 - Passives
- 9-10 - Promoters
You’ll notice how hard it is to be categorised as a promoter. You have to be delivering exceptional service and goods to get those nines and tens.
The Net Promoter Score is calculated as the percentage of promoters minus the percentage of detractors.
Let’s say you have 100 respondents split into 7 Detractors, 55 Passives and 38 Promoters. Your NPS score would be 31 (38-7). Because of this calculation, it is possible to have a negative score. You’re looking to get as close to 100 as possible.
Why Is Net Promoter Score Important?
Net Promoter Score is a proven metric that helps you predict business growth and measure customer experience. It provides the core measurements for customer experience management programs around the world.
According to the Bain analysis, the companies that provide sustained value to their customers, achieve long-term profit growths. These companies have the NPS two times higher than the average companies. If you are tracking your NPS then you will not be able to measure how you are performing and identifying areas you can improve.
How To Improve Your Net Promoter Score
To improve your NPS you need to go beyond simply collecting score and really talk to your customers about why they have rated you that way. Through these conversations you can uncover the positive and the negative things you are doing which will help you improve the experience moving forward.
Other ways to actively improve your NPS are:
- Encourage your promoters to promote. If your customers are saying they would be likely to recommend you then why not give them the medium to do it! Encourage them to share via social or give them a platform to express their satisfaction with you.
- Encourage internal buy-in. Net Promoter Score is not the responsibility of one person. To truly succeed you need buy-in at every level and to encourage a sense a of pride around your rating.
- Don’t just focus on the detractors. Yes, it is important to know why your low rating customers are happy and find out what you can do to improve. But that doesn’t mean you should ignore your passives or even your promoters. They to can help you understand where you are delivering a positive experience and where you might be able to convert your passives into promoters.
- Respond to your customers. The survey should not be the end of the conversation. If you have an unhappy customer, then you should try and resolve any issue they have or atleast acknowledge what they have said. This will make it more likely they will return to you again and give you an opportunity to provide an improved experience.
- Keep monitoring your score. You might be happy with your NPS rating today but don’t get complacent. Your competitors are constantly changing and so are your customers expectations. Continue to track your customer experience and stay ahead of the game by monitoring trends.
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