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What Is Net Promoter Score (NPS)? A Comprehensive Guide
Posted 09 Feb 2023 by Simon Austerberry
Net Promoter Score (NPS) is a metric that measures how loyal and engaged a customer base is with a brand.
NPS enables businesses to measure how likely customers are to recommend their products, services, or experiences to their friends and colleagues.
It can also provide insights into why customers may remain loyal or move to a competitor.
By counting the number of promoters and detractors (more on those terms later on) in the customer base, businesses can identify areas of opportunity for development and improvement.
In this comprehensive guide, we will explore:
- The basics of NPS
- The benefits of using it
- How to calculate NPS
- How to understand and interpret the results
- Tips for improving your score
- Best practices for implementation and leveraging your score.
Understanding the basics of NPS
NPS is developed around a simple survey question:
“On a scale of 0 to 10, how likely are you to recommend us to a friend or colleague?”
NPS surveys are typically sent out on a periodic basis, often quarterly or semi-annually. And usually, responses will be divided into three categories based on the score each customer gave:
- Promoters (score of 9-10)
- Passives (score of 7-8)
- Detractors (score of 0-6)
The total NPS score is then calculated by subtracting the percentage of Detractors from the percentage of Promoters.
An NPS score is a great way to measure customer loyalty and satisfaction. It can also be used to identify areas of improvement and track changes in customer sentiment over time.
Additionally, NPS surveys can be used to gain insights into customer preferences and behaviours, allowing businesses to better tailor their products and services to meet customer needs.
What are the benefits of using NPS?
NPS provides many benefits for businesses that choose to use it.
First, it can provide helpful insights into customer loyalty. By knowing your customer's opinions, you can help your businesses identify areas of improvement. It's also good to know areas that are doing well.
It can also help businesses better segment their customer base and help them to determine how best to target their marketing and promotion efforts.
NPS surveys can also help companies identify what drives customer loyalty and satisfaction.
In addition, NPS surveys can help businesses measure customer satisfaction over time.
Finally, NPS surveys can help to measure how likely a customer will recommend a product or service to others.
How to calculate your NPS
Calculating your NPS requires some simple maths. To start, subtract the percentage of Detractors from the percentage of Promoters to get the overall score.
For example, if 30% of survey respondents gave a score of 0-6, and 70% gave a score of 9-10, then the overall NPS score would be 70 - 30 = 40.
NPS scores can range from -100 to 100.
It is important to note that the NPS score is not a measure of absolute success or failure. NPS is a measure of relative performance.
It is also important to remember that the NPS score is not static but is a measure of customer sentiment that can change over time.
Therefore, you should track your NPS score over time – it'll give you a better understanding of your customer's sentiment.
Understanding NPS results
Once you have calculated your NPS, it's important to understand the results. Generally, a positive NPS indicates that customers are more likely to recommend your company or product to friends, family or colleagues. A negative score shows that customers view your company or product unfavourably and are unlikely to recommend it to others.
Note that NPS should not be used as a grading system. Instead, see it as a tool to help identify areas of improvement.
Also consider the context of the NPS results. For example, if your NPS score is lower than the industry average, you may need to tweak your product or service.
On the other hand, if your NPS score is higher, it may indicate that you are doing something right and should continue to focus on those areas.
Ultimately, NPS results should help you to make informed decisions and improve your product or service.
Tips for improving your NPS score
Once you've worked out and understood your current NPS score, you should implement strategies to improve it.
Some common strategies include:
- Addressing customer complaints quickly to provide better customer service
- Creating personalised customer experiences
- Fix any issues with your product or service raised by your customers
In addition, businesses should also focus on building relationships with customers. This can be done by engaging with customers on social media, responding to inquiries quickly, and providing personalised customer support.
Best practises for implementing NPS surveys
Once you have identified ways to improve your NPS score, there are some best practices that you should keep in mind when building and implementing the NPS survey.
First, you should create an effective survey that is easy to complete for customers. This includes:
- Providing clear instructions
- Keeping questions simple
- Choosing an appropriate survey length
- Making sure that the survey looks good and is easy to use.
Additionally, you should set up internal processes and procedures for reviewing feedback and determine how feedback will be actioned.
You should also ensure that the survey is sent to the right people at the right time. For example, surveys should be sent to customers shortly after they've used your product or service so that feedback is fresh and relevant. TinySurvey's in-the-moment surveys are a perfect tool for this. You could also use email to for your NPS surveys.
How to use NPS in a customer journey map
NPS surveys can be used with customer journey mapping techniques to provide greater insight into customer experience and satisfaction levels. In this case, the survey can be tailored to ask customers how they feel throughout their purchasing journey.
By analysing the responses given by customers at each stage, businesses can pinpoint weaknesses in their customer experience.
How to get the most from your NPS surveys
NPS can be a helpful tool to measure customer loyalty. They're easy to set up and quick to complete.
Make sure you ask your customers when they use your product or service to get more reliable results. Ensure you have a plan to review and action feedback. And finally, conduct regular NPS surveys to measure loyalty over time and see if your improvements are working.
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