Net promoter score (NPS)
Net Promoter Score (NPS) measures whether your customer will refer you to someone new. Since 83% of people say that they trust the recommendations made by their friends and family more than they trust advertising, referrals are crucial 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 purchase.
How to measure Net Promoter Score
Net Promoter Score is a crucial way to track the feelings and thoughts customers have about your brand. To find your NPS:
- Start by sending your customers a survey and asking them whether they would recommend you to a friend with a number between 0 to 10.
- Segment 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 achieve 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 speaking to your customers and learning what they think about your brand, you can identify 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 explain the number they chose with qualitative feedback. For instance, 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?
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 willing to recommend your business to friends is essential. Other benefits of knowing your Net Promoter Score include:
- The ability to measure customer loyalty: Customer NPS allows you to see whether your customers are likely to stay with your company. Someone who recommends you to a friend is less likely to churn.
- Identifying ways to improve: Customers who answer your NPS question with a low score may also provide you with insights into their answers. If you know why people wouldn’t recommend your brand to a friend, you can make crucial 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.