Everything you need to know about Net Promoter Score NPS
Net Promoter Score is a good measure to show the willingness of client to promote your company’s services or products to their connections.
It is an easy tool to know customer satisfaction and their loyalty towards brand.
How is Net Promoter Score calculated?
Customers are asked the following question?
“How likely are you to refer or recommend products or services of our company to your colleague or friend on a scale of 0 to 10?”
Customers are then divided into 3 slots which are promoters, passives and detractors.
Let’s go from bottom score.
Detractors
These people are a bad news to any company.
They are folks who gave score less than 6.
They are clearly not satisfied with any product or company’s service.
They may plan to destroy reputation of company.
Passives
They are like 50–50 kind of people, who neither promote or damage company reputation.
These people are on the edge of switching from one product to other.
If competitor gives an amazing offer, they will go for it.
In short, neither excited nor dissatisfied with your service or product.
Promoters
They are good news for every company.
They have fallen in love with your service or product and never think twice before giving you a call.
Promoters always recommend company’s service or product with other buyers.
Enough about categories, how is Net Promoter score (NPS) calculated?
It is simple.
Subtract percentage of detractor customers from promoter customers.
On a scale of “0” to “100”, if most of the customers gave a score of less than 6, then NPS is -100.
If most of customers gave a score 9 or 10, then the NPS is 100.
Why NPS is important to any business?
Success of any business depends on customer satisfaction.
Experience of customers can be known though NPS.
NPS defines the well-being and strength of any business.
It can be helpful to management to take proactive steps and serve customer better.
Is it helpful to employees?
Of course. It can be shared with employees to know that their future is in safe hands.
It also motivates them to work and provide an amazing customer experience.
What is the purpose of NPS?
It is more than a fancy number to management who are either happy or worried.
Purpose of NPS is to know the unhappy customers and make them happy by serving with top-notch service or product.
Who started NPS?
Fred Reichheld of Bain and company and Satmetrix started this metric way back in 2003. You can google about it later, if interested.
Let’s dig deeper and find solution to increase NPS score.
Well, detractors are already pissed off.
It is hard for a company to win their trust.
Some detractors might file a case or spread negative word-of-mouth to their connections.
On the other side, promoters are super happy.
They will need less effort from company in serving them.
Promoters give free publicity to company.
They can be considered as employees who promote your products without demanding any salary.
Let’s go point-wise solution.
1. Commitment from employees of company
No company can give best customer experience unless every employee is committed to give their best. Transparency and complete responsibility of employees towards company is needed.
2. Willing to take feedback with positive attitude
Real-time feedback is a perfect solution to decrease number of detractors. Be it sales, marketing or operations, every employee should take feedback and improve their service.
3. Data need to compiled in detail
Mere NPS score is not enough to solve the problem. Management need to dig deeper and find out what exactly is causing a bad customer experience.
More focus in converting detractors into promoters. It is an easy job but it is totally worth it for future growth.
I hope this information is helpful to you. Thanks!
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