Net Promoter Score: An overview
Introduced in Fred Reichheld Bain‘s article “one number you need to grow” in the 2003 Harvard Business Review, Net Promoter Score (NPS) is a management tool that serves as an avenue of gauging customer satisfaction and patronage. The major aim of this tool is to measure the loyalty of the consumer to the company’s brand. With a score range of -100 to +100, the Net Promoter Score allows industry bodies and individual organisations to identify the amount of loyalty the respondents have to the business, product or service provided.
Getting your Net Promoter Score
The Net Promoter Score is calculated from one single, very simple, question – on a scale of 0-10, how likely are you to recommend our [product/service/company] to friends and family? The score is calculated based on how people respond to the questions on the survey. Results are grouped into promoters, passives and detractors.
Promoters: score 9 or 10
Promoters are more likely to remain customers, refer the brand to possible customers with positive reviews and keep buying from the company.
Passives: score 7 or 8
Passive respondents are typically “fence sitters” – they are not overly enamored with your company/product, nor are they particularly upset with it. In a debate between promoters and detractors, passives would tip the scale between them purely due to their “count” in overall response numbers, not because of their score.
Detractors: score between 0 and 6
Detractors on the other hand have negative views about the brand/product.
To calculate a company’s NPS score, the percentage of the detractors is subtracted from the percentage of the promoters.
Although the primary purpose of the Net Promoter Score (NPS) survey is to measure the loyalty of a customer to the brand, it can also be used as a development tool. Results received from survey results can be used to develop existing products or bring to the forefront the plan for a product that’s been on the drawing board. It is also an avenue for feedback and constant communication channel between the company and its consumers. NPS is a simple tool that solves a myriad of problems for a company.
Utilising your Net Promoter Score
Depending on your overall survey strategy, your net promoter score can be utilised in a variety of ways. Leveraging the unique Ezisay Net Promoter Score question allows you to have further actionable insights.
After each survey is completed, or on a regular basis (for ongoing and pulse surveys), responses can be analysed and utilised in the following ways:
- Help them to refer more people by using attractive incentives like discounts on company’s services/products and referral bonuses.
- More customer friendly responses to their enquiries.
- Encourage them to always leave reviews and suggestions for the company on its website and social media pages.
- Thank them for their loyalty and continued support.
- Request for more information on how better the company could serve them.
- Educate them about brand features they might have overlooked which would have made for a better user experience.
- Also thank them for their input.
- Apologize, sincerely.
- Engage them in conversations about how better to serve them.
- Ask about their sore spots with the brand then use their recommendations to improve such weak spots, thereby strengthening the brand.
- Thank them and promise to serve them better.
One of our other blogs delves into this further and what is the right way to provide high quality customer service and turn that detractor into a promoter.
Advantages of Net Promoter Score
Simple to use and easy to administer.
The Net Promoter Score is a simple question to answer that allows a quick guage of your company’s customer satisfaction performance.
Customers can be asked to provide their response to this question through a variety of channels whether it be online, via email, text message, paper-based survey or otherwise. Calculating the actual score is also simple and requires only basic knowledge of mathematics, a pen and a spreadsheet.
Helpful Management Tool
The NPS constitutes a great aid to managers looking to have an idea of how the company is performing in relation to other competitors. This quick snapshot can identify a sudden change in satisfaction levels allowing management to undertake further research/action as necessary.
Disadvantages of Net Promoter Score
Whilst giving a quick snapshot of satisfaction ‘health’ there are drawbacks to relying on it as a measurement tool for customer satisfaction.
The NPS question isn’t specific.
Critics of the NPS system propose that although it gives an understanding of customer satisfaction, there’s no allowance within the question to identify the reason for a respondent’s score. In many instances, this necessitates the need for a follow up satisfaction survey to identify pain points and strengths. Ezisay overcomes this weakness with an automated two-step Net Promoter Score question allowing respondents to provide direct feedback either via multiple choice options or free text commentary. This is then translated into a visually engaging and highly actionable dashboard.
It is just one question
Whilst that is very much stating the obvious, one single question cannot give you a wholistic nor 100% accurate view of your customer’s satisfaction and loyalty towards your brand and business. It is essential that the Net Promoter Score simply forms a part of a company’s wider customer satisfaction survey strategy rather than being relied in isolation.
The NPS score is a fundamental indicator of a company’s customer satisfaction and can be used to predict a company’s growth or decline. As with all surveys, the most essential element is that there is plans in place to act upon results and responses received. An ongoing survey strategy that not only measures Net Promoter Score, but also identifies strengths and painpoints of respondents across various aspects of their interaction with your business/product/service is going to provide the most actionable, accurate and informative feedback.