The Power of NPS

NPS (Net Promoter Score) is used by companies and organizations to measure customer experience. Designing, programing and implanting your own NPS is easy- if you have a customer list or database, you can program a few questions and be on your way to tracking your NPS in no time.

What is NPS?

Companies use NPS as a metric of an organization’s performance in terms of customer experience, satisfaction and loyalty.  NPS is based on the question “How likely are you to recommend xyz to others (family, friend, coworkers, etc.)?”.  The answers are a scale from 0-10 where 0 stands for “not at all likely to recommend” and 10 stands for “extremely likely to recommend”.  Those who answer 0-6 are classified as Detractors, 7-8 as Passives, and 9-10 as Promoters. The percentage of Detractors is then subtracted from the percentage of Promoters to arrive at a whole number – that number is your NPS.

What is a good NPS?

It is very difficult to compare your NPS score to others since they vary so much by industry, size, corporate structure, consumer demographics, etc. and companies typically don’t publicly report their NPS. NPS can be anywhere between -100 and 100 and can fluctuate according to seasonality, business highs and lows, etc. It is better to use NPS as an internal measurement, a temperature gauge, if you will, for the health of your brand, company or product. It should be run continuously in a cadence that makes sense for your company and your budget so you can track your NPS.

An obvious goal is to have a positive NPS score, since you want more people to recommend you and speak highly of you.  You should also aim to increase your NPS score over time as this is an indication of increased customer loyalty – enthusiastic and loyal customers are likely to have a high lifetime value themselves and can bring in new customers based on their recommendation.

Tips for conducting an NPS

When I first implemented an NPS tracker with one of my previous companies, I did quite a bit of research myself to learn best practices. Some swear an NPS survey should simply be the one question of likelihood to recommend while others prefer to add follow up questions.  Many companies keep it to one question so they can include it in just about any or every survey they run, regardless of the topic.  While it’s easy and simple follow this method, it only reveals the number and not what is contributing to that number.

In my experience, you get much more value by following up with an open-ended question as to why they chose that number so you can gain deeper insights into what is driving your customers’ sentiments. This is one reason I ran NPS as a stand-alone survey – so I could ask open-ended questions for detailed customer feedback from Detractors and Promoters.

Listen to your Detractors and Promoters

Detractors of your brand will point out all the problems they have with your product or company while Promoters will tell you what specifically makes you great.  Some of the verbatims I received from Detractors were brutal (I saw my share of expletives), but some of the comments from Promoters made my heart swell with pride for my company and coworkers. It is all vital information and data that you can act on; improve upon the shortcomings mentioned by Detractors and do more of what Promoters love. Another reason I advocate a stand-alone survey is it will be independent of any other topic, allowing the most relevant issues to naturally come to the forefront from respondents without bias from specific issues that may have been mentioned earlier in the survey.

The Takeaway

Everyone knows how powerful word of mouth can be for a brand, especially in the age of transparency and social media which can leave quite an echo.  You can’t please every customer, but you can be attentive to their feedback and address issues as they arise.  If you don’t like the story customers are telling, find out what is wrong with the plot and change the story. The real power in NPS is when you take notice of large fluctuations in the balance of Promoters and Detractors and dig into those verbatims.  You’ll be able to see if there is any direct correlation to major improvements, product changes, or new media campaigns you may have rolled out.  This will let you know what efforts are making you successful versus those that are not so you can “course correct” when needed.

 

ABOUT THE AUTHOR: Cori Sheperis
With a salacious appetite for learning and curious nature, Cori finds herself at home in the world of market research. She holds an MBA and has enjoyed over 15 years in various marketing, product development and consumer research roles. Her inquisitive nature flows into her personal life where she can be found venturing into as many new countries and cultures as possible.