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What is a Net Promoter Score (NPS) and why is it important?

what-is-a-net-promoter-score

What is NPS?

NPS is a one question survey designed to gauge insight on customer satisfaction, customer loyalty and whether or not that customer likes your company enough to tell their friends about it.

The one question is this:
“How likely is it that you would recommend this company to a friend or colleague?”

The customer is then offered a 0 – 10 scale where 0 means they are Not at all Likely and a score of 10 means they are Extremely Likely to recommend the company to others.

This idea of making it just one question is that you will get many more people to fill out a one question survey as opposed to a longer survey. This gives you more data and thus a better picture of how your overall customer base is feeling. On the other hand, while one question is a good starting point, it is not designed to tell the whole story so adding a few curated follow up questions is highly recommended.

There are many ways to collect survey data: You can email surveys, text message surveys, have survey’s pop up in your software application etc…

Once you start getting responses, you will categorize your customers into 3 categories: Detractors, Passives, and Promoters based on how they answered the NPS question.

You Have Some Data – Now What?

The first thing you want to do is to get your NPS score. The score calculation goes like this:
% of Promoters (9’s and 10’s) – % of Detractors (0 – 6’s)

To make things even easier, Survey Monkey has a quick and simple NPS calculator that can be found here: https://www.surveymonkey.com/mp/nps-calculator/

What is a good NPS score?

The possible scores on the NPS Scale range from -100 to +100, with 0 being the midpoint.

Generally speaking anything over 0 is considered “good”, while any score less than 0 would indicate the company has some work to do in improving customer satisfaction.

If you find yourself below 0, this is your companies wake-up call. You need to stop what you are doing and reevaluate your product, service and what it’s like to be one of your customers.

On the positive side, let’s look at the levels:

0 – 30: This is in the good range. However you shouldn’t go bragging that you have an NPS score of 20. While you may be on the right track, there is a lot of room for improvement here.

30 – 50: Now you are starting to shine. You have many more happy customers than unhappy customers. You are doing the right things, but if you really want to take your company to the next level, try to get over that coveted 50 mark.

50 – 70: If you are in this range, you are an absolute rock star. Your company has figured out how to take care of customers with the best of them. This is a score you can be very proud of. Go ahead and brag.

70 – 100: There are very few companies who fit into this category. I would re-check my math to make sure I am calculating things correctly. If your company is lucky enough to fall into this range, you are sitting on a goldmine. Don’t change a thing! Keep doing exactly what you are doing.

Information is great, but how can this help your company?

Once you have your NPS score and you are tracking it on an ongoing basis, there are several things it can help you with:

  1. It can predict your company’s health and the likelihood of future growth.
  2. It will carry warning if things are trending in the wrong direction.
  3. You will discover who your Promoters are and you can make sure they are seen, heard and appreciated.
  4. You know who the Passives are and you can put effort into moving them towards the Promoter category.
  5. It will give you insight and create opportunities to improve your customer’s experience and help you gain more loyal customers.

Double Your Sales!

Create a proactive word-of-mouth strategy to increase referrals and grow your business without breaking a sweat!

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