Net Promoter Score (NPS)

What is the Net Promoter Score (NPS)?

The Net Promoter Score (NPS) experiment is a widely used tool for measuring customer loyalty and satisfaction. It’s a concept that transforms a simple customer feedback metric into a powerful tool for business growth and product improvement. Let’s delve into the various aspects of the NPS experiment in more detail.

How the Net Promoter Score (NPS) works

By asking your customers to rate “How likely is it that you would recommend our company to a friend or colleague?” on a scale from 1 to 10, their level satisfaction is gauged. To obtain the Net Promoter Score, participants are categorized into three groups depending on how they answered:

• Pomoters. Those who gave a rating between 9 and 10
• Passives. Those who gave a rating between 7 and 8
• Detractors. Those who gave a rating between 1 and 6

The Net Promoter Score is calculated by subtracting the participant percentage of Detractors from the percentage of Promoters:

Net Promoter Score = % Promoters - % Detractors

The result will be a number ranging from -100 to 100 where any score above +40 is generally excellent. This can, however vary from industry to industry. There is no fixed rule.

The number itself reveals only little

Calculating your NPS on a regular basis is good practice and will allow you to spot and react to any significant sudden changes. However, just looking at the score itself reveauls little about why users answered like they did. This is why it is vital to follow up with qualitative surveys asking open-ended questions related to the experience and value your product or service delivers.

Implementing Net Promoter Score Suveys

Companies usually implement NPS surveys after significant interaction points, such as post-purchase or after customer support interactions. This timing is crucial as it captures the customer’s sentiment when their experience with the product or service is most vivid.

Timing is critical – sending the survey immediately after a purchase or interaction can yield more accurate and honest responses. This distribution can be facilitated through various channels like email, in-app notifications, micro surveys, or even SMS, depending on where customers are most engaged. Automation tools can also be used to trigger these surveys at the optimal moment, ensuring consistency in data collection.

Closing the feedback loop

A crucial part of the NPS experiment is closing the feedback loop. This involves reaching out to customers, especially Detractors, to address their concerns. It shows customers that their feedback is valued and acted upon.

Closing the feedback loop is a multi-step process. Initially, it involves categorizing the feedback from the NPS survey into actionable segments. This categorization helps in understanding what specific changes would most impact customer satisfaction. For example, feedback from Detractors might highlight issues that need immediate attention, while insights from Promoters can identify strengths to build upon.

The next step in closing the loop is directly engaging with customers, especially those who have provided negative feedback. This engagement can take various forms, such as personalized emails, phone calls, or even face-to-face meetings, depending on the severity of the feedback. The key is to show customers that their opinions are valued and that the company is committed to addressing their concerns. This proactive approach can turn Detractors into Promoters, demonstrating the company’s dedication to customer satisfaction.

Tracking NPS long-term

NPS is not a one-time metric but a long-term tracking tool. Companies monitor their NPS score over time to assess the effectiveness of their strategies in improving customer satisfaction and

For long-term tracking, it’s essential to establish a system for regularly monitoring and analyzing NPS scores. This continuous analysis helps in identifying trends, understanding the impact of specific changes, and making informed decisions. It’s not just about tracking the score itself, but also understanding the underlying reasons for any shifts in the score. Tools and dashboards can be used for real-time tracking and to disseminate insights across the organization.

Additionally, integrating NPS tracking with other metrics and business KPIs can provide a more holistic view of customer satisfaction and loyalty. This integration allows for correlating NPS data with other business outcomes, like repeat purchase rates, churn rates, and overall revenue. By doing so, companies can better understand the ROI of their customer experience initiatives.

NPS should be viewed as a dynamic tool, one that evolves with the company’s growth and market changes. Regularly revisiting the NPS strategy, survey design, and analysis methods is crucial to ensure that the system remains relevant and effective. Companies that successfully implement NPS as a long-term strategy often foster a culture of continuous improvement, where customer feedback directly influences business strategy and product development.