Net promoter score (NPS)

Net Promoter Score (NPS) measures whether your customer will refer you to someone new. Since 83% of people state that they strongly trust the recommendations made by their friends and family, and consider those recommendations when following brands, referrals are key in the modern business landscape.

Although NPS is a type of customer satisfaction benchmark, it’s different than a customer effort score or customer satisfaction score because it measures the overall sentiment that a customer feels towards your brand, rather than focusing on a specific transaction.

How to measure Net Promoter Score

Net Promoter Score is a key way to monitor the feelings and thoughts customers have toward your brand. To discover your NPS:

• Begin by sending your customers a survey to ask them whether they would recommend you to a friend with a number between 0 to 10.
• Divide your customers according to scores. Anyone with a score of 0 to 6 is a “Detractor”, while scores of 7 to 8 are “Passives” and scores of 9 to 10 are “Promoters”.
• Ignore the Passives in your consumer base and subtract the percentage of Detractor responses from the percentage of Promoters to achieve your score.

To attain a high Net Promoter Score, you’ll need to have a significantly high number of promoters – much higher than the number of detractors in your network. By consistently communicating to your customers and learning what they think about your brand, you can pin point potential problem areas, opportunities to improve your reputation, and more.

The best way to generate useful information when finding out your NPS is to give your customers the opportunity to expand on the number they selected with qualitative feedback. For example, someone may give you an 8 instead of a 9 because you don’t offer customer support on Twitter, but you do on Facebook.

Why is Net Promoter Score important?

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Customer experience is set to overtake both product and price as the key brand differentiator in 2020. With that in mind, it’s crucial for companies to understand the sentiment that customers have towards the companies that they work with. Knowing how many people are likely to recommend your business to friends is essential. Other perks of knowing your Net Promoter Score include:

• The ability to measure customer loyalty: Customer NPS gives you insight into whether your customers are likely to stay with your company. Someone who recommends you to a friend is less likely to turn away.
• Identifying ways to improve: Customers who answer your NPS question with a low score may also expand on their answers. If you know why people wouldn’t recommend your brand to a friend, you can identify those problem areas and make important changes.
• Boost referral marketing: Net Promoter Score lets you see how effective your referral marketing strategies are. More than 80% of happy customers say that they’re generally willing to provide recommendations.