If there’s a single most important metric for most industries to predict customer loyalty and growth, that would be the net promoter score (NPS). What is a net promoter score good for? It measures and manages customers’ loyalty to a brand based on responses to a one-question survey.
On a scale of 0 to 10, how likely is it that you would recommend [company X] to a friend or colleague?
The NPS score ranges from -100 to +100 (the higher the score, the better)
Simple as it is, this customer loyalty survey question hones in on how referrals help bring in new business – often for free. Together with other factors, companies focused on keeping satisfied customers or promoters happy can lower their customer acquisition costs and avoid leaks at the top of the sales funnel.
The NPS metric gives you an accurate picture of the ratio between your promoters and detractors. From your NPS score you can glean insights for retaining promoters and turning detractors into promoters, strategically increasing growth and even managing your online reputation. It also pairs well with your customer satisfaction score (CSAT), which provides you with specific pointers on how to improve the customer experience (CX).
It may be the first time you’re hearing about NPS, or you want to effectively deploy your NPS survey to claim all the benefits. Read on for an in-depth talk about this customer loyalty yardstick and how you can deploy great customer experience survey campaigns that drive growth.
• What Is Net Promoter Score Tracking and Measuring?
• How To Calculate NPS
• What Is a Good NPS Score?
• How To Use Net Promoter Score Survey Results To Grow Your Business
• How To Improve NPS Score Proactively
• Key Takeaways
What Is Net Promoter Score Tracking and Measuring?
It’s common knowledge that happy customers or clients are the key to long-term growth. But the way the NPS survey questions consumers drives the message home: A positive customer experience cultivates loyalty, and nothing proves brand loyalty more than customers recommending your brand to their immediate circle. The net promoter score checks if you’re having enough enthusiastic people referring you to their family, friends and colleagues – and tells you if you need to boost efforts to attract them. It quantifies word of mouth, providing you with figures on which to base your decision.
The data is made simple, so it’s intuitive for multiple departments. There are three categories that the NPS metric divides survey respondents into. And they’re grouped according to their response to the NPS survey, which uses a scale of 0 (not at all likely) to 10 (extremely likely).
• Promoters: This group comprises customers who respond with a 9 to 10 score. They are satisfied with your brand, products or services and translate their enthusiasm into repeat purchases and/or referrals.
• Passives: Giving you a score of 7 or 8, these satisfied yet unenthusiastic customers are unlikely to fuel growth through recommendations. By not establishing loyalty to your company, they can also be easily swayed by competitor offerings.
• Detractors: Responding with a score from 0 to 6, these unhappy customers are unlikely to purchase from you again. They may engage with negative word of mouth, discouraging others from dealing with your brand and causing brand damage.
Aside from measuring your company’s customer satisfaction, you can apply the NPS survey tools into the following:
• Specific products & services
• Stores & branches: Apple, a brand with a worldwide cult following, used NPS on its stores, and the best Apple stores snagged a remarkable NPS of 90.
• Staff members
• Industry: The net promoter score benchmarks you against competitors to see how you’re doing and what you need to do.
How To Calculate NPS
Calculating the NPS score is quick and simple. Gather the net promoter score survey data for a particular time period and tally the percentage of promoters and detractors. Then, subtract the percentage of detractors from the percentage of promoters to get your NPS score.
Total % of Promoters – Total % of Detractors
If you want a more efficient net promoter score calculation, just check the total number of promoters and detractors and follow this formula:
(Total Number of Promoters – Total Number of Detractors) ÷ (Total Number of Respondents) x 100
Are you working with a lot of data daily? Centralizing your efforts through an NPS company or online survey software (or both) is always a good idea if you’re massively deploying customer satisfaction and net promoter score survey questions.
What Is a Good NPS Score?
Remember that the net promoter score benchmarks competitors within the same industry. But it is also a growth metric for your goods, services, people or brand. So, what is net promoter score intended for in your company? No matter the purpose, there’s consensus in establishing “what is a good NPS score?” among the experts:
• 0-30 (Good): Depending on your industry, a positive NPS – even on the low side – already looks good. But your attitude and mindset should center around the question of how to improve NPS. Net promoter score companies recommend using other complementary online survey tools, especially those focused on customer experience.
• 30-70 (Great): You’re doing well managing and maintaining your customer relationships, especially if you’re leaning toward the maximum score for this range.
• 70-100 (Excellent): The net promoter score companies want to achieve is within this range. If you reach this point, customers are satisfied with your company, which means more positive reviews, repeat purchases and referrals. Warby Parker, the online retailer of glasses, has a stellar NPS score of 80.
Consequently, you may be asking, “what is a bad NPS score? As much as you can, avoid a score of -100 to 0. If you’re struggling with improving your numbers, reinforce the role of NPS in your customer experience strategy and partner with an online survey company that understands how to integrate it with other online survey services.
How To Use Net Promoter Score Survey Results To Grow Your Business
The NPS metric should be the core of your customer experience management. But it’s not the only thing you need to measure customer satisfaction and loyalty, let alone grow your business. After net promoter score calculation, here are four more things you can do to maximize your customer loyalty survey data:
1. Collect Additional Data
What is a net promoter score, good or bad, if not analyzed for insights? But since the way in which the NPS survey questions customers does not provide context to their responses, you have to expand your NPS survey tools. The closed-loop customer follow-up is one of the best online survey tools. It lets you continue the conversation where necessary, especially when dealing with detractors.
2. Think Long-Term
Collect and track NPS consistently to compose a bigger picture out of the everyday details. Beyond net promoter score calculation, you can see trends, patterns and relationships in the overall CX data over time. These pieces of information can help you develop a better long-term strategy.
3. Employ and Fine-Tune Customer Segmentation
Try deploying your expanded net promoter score survey questions at specific touchpoints, e.g., after product delivery or customer service contact. The challenge is to weave the NPS survey questions seamlessly into the customer experience. Using online survey software can simplify the data collection process, so you can focus on fine-tuning your segmentation, for instance, based on product bought, age group or location or subscription plan tier.
4. Leverage Feedback From Detractors for Better CSAT and ORM
This is where the right combination of online survey tools, such as online reputation management (ORM) and net promoter score survey questions, can result in the best CX. ORM is what you need to engage detractors, ensuring you’re empathizing with them while closing the loop.
For proper implementation, find an NPS company or online survey company that is well-versed in review monitoring and review response. Remember that 87 percent of consumers read online reviews, both good and bad, so responding to detractors’ feedback may create some good for your business.
How To Improve NPS Score Proactively
Even if you’re not working with net promoter score companies that provide online survey services, you still need a strategy to master the technicalities. You may have to deal with low response rates and customer loyalty survey fatigue. You also have to be aware of leading questions, financial reward offerings to obtain high ratings and the wrong NPS survey tools or methodology.
Sometimes, it’s the user experience (UX) that affects technical issues. Take low response rates: The survey may be well-designed, but it’s popping up late or in places where customers no longer have an incentive to stay. This can skew the number of promoters vs. detractors. In this case, it can be more value-adding and cost-effective to use the net promoter score service of a proven NPS company rather than experiment. After all, enhancing the UX can drive sales and customer satisfaction.
In this article, you’ve come across the answers to “What is a net promoter score?” and “How to calculate NPS.” Beyond net promoter score calculation, you’ve learned how net promoter score benchmarks your business against competitors and helps you achieve growth goals.
NPS is the core metric of your CX management, but it has to be integrated with other online survey services to maximize its potential. Tracking and measuring all the elements of your CX, including CSAT and ORM, allows you to make more sense of your NPS data and act on it.
Rize has advanced online survey software to bring you clarity and direction when it comes to unifying your survey campaign. The Rize software also comes with a free review widget to handle review generation through promoters smoothly.
Make our online survey company your partner in tracking, understanding and improving your NPS data. To start, contact Rize for a free demo of how our tools and services can support your data-driven growth.