Mastering Net Promoter Score: The Comprehensive Guide for 2023

What do customers think of your brand or product? Are they loyal who would recommend you to their friends? NPS survey answers them all! In the fiercely competitive world of enterprises, customer satisfaction is the key to the long-term growth of a business. To attract more customers, it's essential to promote your products/services, identify areas for improvement, and uphold high standards. However, achieving this can be a daunting task. Fortunately, there is a simple yet powerful method to assess your business's overall performance: the Net Promoter Score (NPS). NPS score acts as a compass, guiding you toward understanding the loyalty of your customers. In this article, we will explore the importance of NPS surveys and discuss how decision-makers can harness their immense value to propel their organizations forward. The NPS survey is a simple yet great way to measure your customers’ loyalty to your brand. This metric aims to identify customers who may be less satisfied with the product or service and convert them into enthusiastic brand advocates.    

What is Net Promoter Score (NPS)?

The Net Promoter Score (NPS) is a widely utilized metric by organizations to gauge customer loyalty towards their brand, product, or service. As part of their customer relationship management (CRM) strategy, many companies opt for NPS due to its simplicity in formulation and calculation. All they need to do is ask customers a single question: "How likely are you to recommend us to a friend or colleague?" on a scale of 0 to 10. The resulting NPS falls within the range of -100 to 100, with higher scores indicating a more favorable perception of the organization by its customers. NPS serves as a common metric for evaluating customer perception and experience. By analyzing NPS scores, organizations can identify areas in their business that require improvement to foster stronger customer loyalty. However, it is important for organizations to avoid pressuring customers with NPS surveys and not rely solely on them to measure customer loyalty. Other metrics and methods should also be employed to gain a comprehensive understanding of the customer relationship landscape.

Origin of NPS

NPS was first introduced in 2003 by Fred Reichheld in a Harvard Business Review article called "The One Number You Need to Grow." He believed that companies should know how many customers were helping their business (assets) and how many were not (liabilities). By using a simple rating system that connects customer feedback to a specific number, companies can use NPS to guide their important decisions.

How to calculate NPS?

The net promoter score is determined from a quick two-minute questionnaire-based survey that asks customers to rate their likelihood of recommending a brand to their friends and acquaintances. By asking the question, "How likely are you to recommend our product/service to your family and friends?" On a scale of 0-10, customers can rate their answers. Their ratings will place them into one of three categories:

  • Customers who rate less than 6: Detractors are unsatisfied customers who are unlikely to make future purchases from your business. Their negative experiences can deter others from engaging with your brand, making it crucial to closely monitor this group. By gaining insights into why their shopping experience was unfavorable, you can gather valuable information to enhance your business. Implementing necessary changes to address their concerns allows you to gauge the effectiveness of these improvements by calculating another NPS months later.
  • Customers who rate between 7 and 8: Passives, on the other hand, are customers who had an acceptable experience but weren't overly impressed to become promoters. They are neutral, possibly returning for repeat business but easily swayed by competitive pricing or appealing features elsewhere. While they can become detractors if left unattended, they can just as readily become promoters with the right approach.
  • Customers who rate more than 9: Promoters signify a positive outcome as they actively recommend your business to others. They are your most effective form of advertisement, and to attract more Promoters, it's essential to ensure a delightful customer experience. However, even with a high percentage of Promoters, there's room for improvement to enhance the satisfaction of these already pleased customers. Understanding how to calculate NPS can prevent Promoters from slipping into the Passive category.

Net Promoter Score: %Promotors - %Detractors

  • The score ranges from -100 to 100.

How to measure Net Promoter Score?

Measuring your Net Promoter Score might seem complex, but it can be accomplished through a straightforward process:

  1. Gather customer feedback:

To calculate NPS, ask your customers the question, "On a scale of 0-10, how likely are you to recommend our brand to others?" Allow them to provide additional comments explaining their response. This question can be included in surveys, follow-up emails, pop-up notifications, or social media polls. While the qualitative feedback doesn't affect the overall NPS, it provides insights into areas for improvement.

  1. Categorize responses:

Once you have collected responses, categorize customers into three groups based on their scores: - Promoters: Score of 9 or 10 - enthusiastic advocates. - Passives: Score of 7 or 8 - moderately satisfied but not strong advocates. - Detractors: Score of 0 to 6 - dissatisfied customers who might spread negative opinions.

  1. Calculate percentages:

Determine the percentage of promoters and detractors among all respondents. Divide the number of positive scores by the total number of respondents for promoters and detractors separately.

  1. Calculate the NPS:

Subtract the percentage of detractors from the percentage of promoters. For instance, if you have 60% promoters and 20% detractors, your NPS would be 40 (60% - 20% = 40%). NPS above 50 is considered good, and 70 or higher is excellent. However, keep in mind that NPS benchmarks can vary across industries. Once you have your NPS, the data can be used to improve customer outcomes.  

What is regarded as a favorable Net Promoter Score?

Net Promoter Scores are numbers that range from -100 to 100. If the score is negative, it means that a company has more unhappy customers (detractors) than satisfied ones (promoters). If it's positive, it means the opposite, with more promoters than detractors. An NPS above 0 is generally seen as good because it indicates that there are more promoters than passives or detractors. On the other hand, any NPS below 0 is considered bad. To better understand how good or bad a specific NPS is, it's helpful to know the average NPS for that industry. For instance, if the typical score in a particular industry is around -10, then a company with an individual score of -3 wouldn't be as worrisome in comparison. Conversely, an NPS of 3 would be considered worse in context if the industry average is 30.  Having a high NPS is essential for the whole organization, not just something the product or customer success team should worry about. Now that we have delved into the definition of NPS and its value, you can harness this knowledge to enhance your business prospects.

What is the use of Net Promoter Score?

If your NPS score is lower than desired, it should be a top priority for your business to improve it strategically. To do this, you need to create open communication within your organization and set clear, measurable objectives for all teams involved. By aligning everyone's goals with the NPS improvement, everyone will be aware of its importance, recognize the benefits of boosting it, and understand how they can actively contribute to achieving that goal. Are you still worried about NPS calculations? Sit back and watch the magic happen as Survey2Connect takes charge of your Net Promoter Score calculations! Utilize Survey2Connect’s agile survey design platform to effortlessly create customized NPS surveys in mere seconds. Tailor the variables, metrics, and scale according to your preferences and engage with your customers seamlessly. You don't have to export standardized reports and analyze data independently to gain NPS insights. Survey2Connect’s net promoter score tool provides built-in analytics specifically tailored for your industry.

NPS Survey Types

There are two categories of NPS surveys employed to assess customer satisfaction and obtain feedback:

  • Relationship NPS Survey

If your business involves long-term interactions with customers extending over several years, it is advisable to set up NPS surveys on a monthly or quarterly basis. The purpose of these surveys is to ensure customer satisfaction and to incorporate their feedback, which can help prevent them from switching to a competitor's offering.

  • Transactional NPS Survey

After key events in the customer journey, businesses send out surveys to gather feedback. These surveys may be about the customer's experience after buying something, contacting customer service, or not using the software or buying a product for a while. By using data from their customer database and marketing tools, companies decide when to send these surveys.   The primary contrast between the two types of NPS surveys (transactional vs. relationship) lies in their objective. The relationship survey focuses on gathering feedback regularly from loyal, long-term customers. In contrast, the transactional survey is geared towards collecting feedback after individual customer interactions or specific transactions.

Why is NPS score important?

Net Promoter Score (NPS) is a simple and easy-to-understand method of measuring how customers feel about a company. It allows businesses to know if customers are likely to recommend their products or services to others. This information is straightforward and can be easily shared within the organization.   NPS management also helps companies focus on improving customer experience since it aligns everyone in the organization towards the common goal of satisfying customers. By using NPS, businesses can better understand what customers want and make necessary improvements to meet their needs. To simplify this, let's get to the reasons why you should consider NPS surveys:

Measures customer loyalty  

NPS provides insights into the likelihood of customers referring your business to their friends, as well as the risk of customer ‘churn’. By identifying potential churners, businesses can take proactive measures to retain and empower their existing customers. Recognizing customers who may be at risk of leaving is crucial, and tracking customer NPS over time enables businesses to stay proactive in identifying and addressing any issues that may affect customer loyalty. By focusing on customer satisfaction and loyalty, businesses can build long-term relationships and drive sustainable growth.

Analyzing NPS changes

Monitoring the overall, NPS allows companies to gauge the likelihood of customers referring their brand to others. By tracking changes in the ratio of promoters, passives, and detractors, customer success teams can gain insights into the direction of the NPS. Changes in the customer NPS serve as a valuable predictor of current customer satisfaction levels and the likelihood of churn. By staying attuned to shifts in the NPS, companies can proactively address any concerns or issues, fostering customer happiness and minimizing the risk of customer turnover.

Boost to affiliate marketing

It receives a boost through the implementation of NPS surveys. By leveraging NPS insights, businesses can identify and nurture their most loyal customers, turning them into brand advocates and affiliates. These satisfied customers are more likely to recommend you to their networks, expanding the reach and impact of the affiliate marketing efforts. Additionally, NPS surveys help companies understand the specific needs and preferences of their customers, allowing for targeted affiliate marketing campaigns that resonate with the audience.  

Leveraging NPS Scores for Continuous Improvement

Occasionally, customers may give a low score, including a 0, in response to the NPS question. While this can be challenging, it also presents an opportunity to prioritize consumer feedback and drive product or service improvements. An NPS survey that allows customers to provide detailed feedback explaining their scores. This additional opportunity enables businesses to evaluate the quality of consumer feedback and identify specific modifications that can enhance their experience with the product or service.

Boost online reputation with more reviews  

Having a solid online reputation is crucial for business success as potential customers heavily rely on online reviews. NPS helps manage your online reputation by generating positive reviews and increasing response rates. Encourage promoters to leave reviews by including an exclusive step with a direct link to your profile on review platforms like Facebook, Google, or G2Crowd. Utilize an NPS survey tool with conditional logic to streamline the process. Show gratitude by offering incentives without appearing to buy reviews. Leverage NPS to enhance your online reputation and attract more customers.

Increase CLV

Customer Lifetime Value (CLV) represents the total profit generated by a customer throughout their relationship with your business. By utilizing NPS to identify promoters, detractors, and passives, you can cater to each customer group effectively. Address the feedback provided by each group, resolve any issues, and communicate the improvements made. By doing so, even detractors and passives can be impressed and convinced to continue using your services. This approach makes customers feel valued, leading to longer-term brand loyalty. By listening to their feedback and acting on it, you can gradually convert them into loyal customers, ultimately increasing CLV.

Outperform the competition

NPS is a valuable weapon to stand out in a crowded market. Benchmark your score against the industry average to track your progress and outperform the competition. Without this comparison, you risk missing the mark and falling behind. Monitoring the industry average allows you to set targets and take necessary actions to keep improving. Stay competitive and strive for excellence with NPS.

Drive Retention and Upselling Opportunities

NPS surveys help identify at-risk customers (detractors) and provide an opportunity to address their concerns promptly. By addressing these issues, resolving conflicts, and implementing necessary changes, businesses can improve customer retention rates. Additionally, NPS surveys can uncover opportunities for upselling and cross-selling by identifying highly satisfied customers who are likely to engage in additional business.

NPS Survey: Asking Right Questions

NPS questions are short, easy, and flexible, making NPS surveys more concise and clearer than long forms. This simplicity leads to significantly higher response rates compared to other survey formats, making NPS a reliable method. If you need more insights, you can add optional questions to the standard survey template. Specialized NPS software allows you to fully customize your survey and include closed ended (rating, multiple options, nominal) or additional open-ended questions. However, adding more questions doesn't always mean getting more value. Avoid overwhelming customers, especially if you're just starting. Stick to the most important questions that will provide the exact insights you need.

Questions to ask in NPS Survey

Simplify your NPS survey by focusing on the main reason you're reaching out. Clearly define your survey goal to identify the most valuable customer feedback.  Consider these factors when creating your survey:

  1. Targeted customer group
  2. Interaction point in the customer journey
  3. Trigger event prompting the survey
  4. Customer behavior over time
  5. Customer pain points or what could turn them into loyal fans
  6. Survey channel

The key to a successful NPS survey is knowing your audience well to provide tailored experiences and value. Now, let's dive into the best NPS questions that suit different scenarios and will greatly benefit your campaigns.

  • How likely are you to recommend our business to a friend or colleague? Please rate on a scale of 0-10.
  • Would you recommend (product/service name) to a friend or colleague? Please rate on a scale of 0-10.
  • On a scale of 0-10, how likely are you to recommend (company name) as a potential workplace to your friends?
  • What is the main reason for your score?
  • How can we improve your experience?  
  • Which product/service features do you find most valuable and use the most?  
  • What was missing or disappointing in your experience with us?  
  • How can we make you a happier customer?

Key steps to implement NPS survey

Step 1: Know your customer touchpoints. To begin with your NPS system, identify the different contact points where your customers interact with your business. Whether it's a transaction or a long-term relationship, these touchpoints are crucial to consider. Step 2: Set up your NPS system. Establish connections between your NPS survey questions and your company's Key Performance Indicators (KPIs). Decide on the type of NPS survey you want to conduct (transactional or relationship-focused) and choose the data collection method (online or telephone). Step 3: Understand what drives customer loyalty. To improve, it's essential to know what influences the feelings of detractors, passives, and promoters who give feedback based on their experiences. Conduct follow-up after the survey to gain deeper insights and strengthen customer relationships. Step 4: Create a closed loop system. A successful closed-loop system involves front-line, middle, and senior management. Front-line staff play a vital role in turning detractors into promoters. Middle managers provide performance coaching for excellent customer experiences. Senior managers establish communication systems and ensure NPS results align with the overall strategy.  Expert tip: To improve customer retention, it's best to survey multiple people involved in each customer account, not just a few. Additionally, conducting surveys more often, like quarterly, yields the best results. By including these steps, you can significantly enhance the value gained from your customer satisfaction process.

12 ways to improve your NPS

  • Timing is crucial when sending NPS surveys. For product-based companies, wait until some time has passed since the customer's last purchase. Service-based companies should consider the different satisfaction levels throughout the service encounter.
  • Personalize your survey invite to improve response rates. Address customers by their names in emails and use engaging language.
  • Beyond the standard question, give customers an opportunity to provide detailed feedback on their ratings. Avoid asking too many questions to maintain a high response rate.
  • Ensure user-friendly surveys by avoiding long loading times and confusing formats to get accurate NPS results.  
  • Engage with detractors and address their complaints promptly to increase customer retention and profitability.
  • Respond quickly to customer inquiries, exceeding their expectations to potentially turn detractors into promoters.  
  • Don't forget to nurture your promoters. Reward their loyalty with incentives like discounts or exclusive products to encourage them to share more about your brand.  
  • Convert passives into promoters by identifying key themes in promoter responses and incorporating them into marketing strategies.  
  • Foster a customer-oriented organizational culture where every employee recognizes their role in delivering value.  
  • Share NPS insights regularly across all departments to ensure a team effort in improving customer satisfaction.  
  • Empower your customer service team by allowing autonomy and flexibility in finding solutions for service problems.  
  • Continuously track your NPS over time to analyze and improve your business's overall health.

Are you ready to create your NPS survey today?

Integrating NPS surveys into organizations is a strategic decision that shapes future success. By harnessing the power of NPS surveys, decision-makers unlock invaluable insights, drive customer satisfaction, differentiate from competitors, and cultivate a customer-centric culture.  However, unlocking the full potential of NPS surveys may seem like a daunting task, but fear not! Survey2Connect is here to make it easy and effective. With Survey2Connect’s user-friendly platform, you can create NPS surveys in a breeze – just a few clicks, and you're all set! No more hassle or complicated processes. Stay on top of your NPS score with real-time calculations, ensuring you always know where you stand in terms of customer loyalty. And that's not all! Automated follow-ups help you win back at-risk customers, turning potential churn into lasting loyalty.  Survey2Connect, offers omnichannel collection of NPS surveys so that you can run your surveys through emails, texts, native apps, social media, websites, offline survey campaigns etc. To effectively capture how your customers feel about your brand, reach them on devices and through channels that they like to use with S2C.  Don't let the challenges hold you back, Schedule a Demo with Survey2Connect and supercharge your customer feedback strategy today!

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