In a sales environment, net promoter score (NPS) is an invaluable metric. It provides deep insights into customer satisfaction and loyalty. Understanding NPS is integral to developing customer-centric strategies that achieve long-term growth.
What is NPS?
Net promoter score (NPS) is a metric that gauges customer satisfaction and the likelihood of a client recommending a product or service.
NPS incorporates a scale of 0 - 10. A typical NPS question would be, "On a scale of 0-10, how likely are you to recommend our product/service?"
These responses are categorized into three segments:
- Promoters (9-10)
- Passives (7-8)
- Detractors (0-6)
The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters.
Why a Net Promoter Score Matters
NPS is an indicator of customer loyalty and overall sentiment.
A high NPS shows that a company delivers value and customers trust a brand. Conversely, a low score signals potential issues with product quality, customer service, or brand perception. It could also mean we’re targeting the wrong people.
NPS can also be used to predict revenue growth. This is because a satisfied customer base often increases referrals, repeat business, and positive reviews.
What is the Best Way to Find NPS?
Customer surveys are the most popular method for getting NPS. Businesses usually incorporate NPS questions into post-purchase or post-interaction surveys.
These questions can be delivered via email, SMS, or even in-app prompts. By consistently measuring and analyzing NPS, companies can track fluctuations, identify patterns, and strategize accordingly.
What's a Good NPS?
While the NPS scale runs from -100 to +100, a good score is relative to industry benchmarks. Any score above 0 indicates that a company has more promoters than detractors.
However, businesses should ideally aim for a score above 50. This is considered excellent as it reflects a strong customer-centric approach.
Still, businesses should aim for continuous improvement. Along with focusing on the score, underlying feedback is also important. Look beyond NPS - even if your NPS rating is outstanding (i.e. above 50).
Why is My NPS Low?
There are a number of reasons why your NPS score might be low. Some of the most common reasons include product quality issues, poor customer service, and unmet customer expectations.
External factors like market dynamics or increased competition can also play a role. If the market is offering something better than you are consistently, NPS can take a hit.
To counteract a low score, you need to take a deeper dive into specific customer feedback. It also helps to address individual grievances and ensure consistent communication with both promoters and detractors.
3 Tips to Increase NPS
- Enhance Your Customer Experience. Whether it's streamlining the buying process, offering more support, or creating intuitive user interfaces, every touchpoint matters. It’s essential to constantly seek ways to simplify and enrich the customer journey.
- Act on Feedback. Asking for feedback is important, but it means nothing if you don’t act on it. Addressing customer concerns demonstrates a company's commitment to continuous improvement. The result is greater customer loyalty, repeat business, and referrals.
- Invest in Employee Training. Anyone who interacts with customers can significantly influence your NPS. Regular training ensures that teams are equipped to handle queries, manage concerns, and create a positive brand image.
