Regardless of your business and industry, word of mouth from customers will inevitably be one of the most critical factors in your company’s growth…or lack thereof. You can have a constant eye on your marketing and advertising and still not know what customers are saying about your business. The only way to find out is to ask.
Your Net Promoter Score is one of the most effective tools for measuring word of mouth. To help you understand what this metric is and how to use it for the betterment of your company, we’re breaking it all down in this Net Promoter Score guide.
“Net Promoter Score,” or NPS, is a branded term that refers to a very specifically calculated metric. Essentially, your NPS is a numerical marker of how positive or negative your word of mouth is from your customers. Net Promoter Scores can range from -100 to +100; -100 would mean that 100% of your customers actively deter others from buying from you, while +100 would mean that 100% of your customers actively recommend your business to others.
An NPS starts with one simple question that you ask consumers: “On a scale of 0-10, how likely are you to recommend our brand/store/business?”
Based on extensive research into consumer behavior, the Net Promoter Score categorizes responses into three levels:
Customers who answer 9 or 10 are promoters. This means that they are enthusiastically happy with your products or services and will actively recommend you to others.
Customers who answer with 7 or 8 are passives. They are satisfied enough with your products to remain a customer, but they spread little if any word of mouth about your business.
Customers who answer anything from 0 to 6 are detractors. They are unhappy with your services and will actively spread negative word of mouth about your business.
When you conduct a customer survey and ask that golden question, the next step is to separate customers into the categories of promoters, passives, and detractors, and find out what percentage of your customers fall into each category. From there, you can put it all together: your percentage of promoters comes in as a positive number, passives have no impact on your score, and your percentage of detractors comes in as a negative number. When you do the math, you’ll get your NPS score.
For example, let’s say you discover that 30% of your customers are promoters, 50% are passives, and 20% are detractors. You’ll put together the +30 and the -20 to find that your NPS is +10.
Your Net Promoter Score is a major metric to project your business’s future growth. Not only does it tell you how many of your customers are satisfied enough to remain loyal but it tells you how many of them will be bringing in new customers or deterring them. If your NPS isn’t where you want it to be, it’s not only hurting your revenue today but will continue to hurt you down the line.
Merely understanding the concept of Net Promoter Scores also helps your team better understand consumer behavior. The common misconception is that anyone who would rate you above a 5 is overall satisfied and will help your business, but the fact is that it takes a lot of enthusiasm for customers to recommend you to others. No one wants to refer their friends to a mediocre business.
Finally, your NPS serves as a concrete, practical, measurable way to track your customer satisfaction. It’s a singular number you can compare year after year, quarter after quarter to track your progress.
The only way to find your NPS is to survey customers directly. Most often, your NPS will be one part of a multi-question customer satisfaction survey.
There are two ways to go about finding your NPS once you have run your survey: with manual calculations or using the survey tool itself. Using a survey tool that does this calculation for you will save you the time of totaling up your promoters, passives, and detractors, along with calculating the percentages and sum score.
If your NPS is not as high as you’d like it to be, taking steps to improve it today will impact your revenue for years or decades down the line. Use these tips to improve your customer service.
Just Ask!
As helpful as an NPS is, it misses one critical detail: the “why.” Why aren’t more people enthusiastic enough to be promoters? The best way to know how to improve your service is to just ask customers what you can do better.
To do this, use a survey tool like GroupSolver that can ask appropriate, open-ended follow-up questions. For example, when customers respond with a 9 or 10, ask them what they love about your brand or why they would recommend you. If they respond with anything lower, ask what you could do better. After that, you need to find a way to put this feedback into action and make impactful changes.
Incentivize Improvements
Everyone in your business will impact your NPS, but especially those who have the most contact with your customers. Give them all a reason to put smiles on more customers’ faces by offering incentives company-wide if your NPS improves.
Look for Patterns
In your customer experience survey, incorporate basic demographic questions about the customer, like their age, gender identity, location, and so on. Use that data to look for patterns within customer segments.
Maybe you’ll find that a disproportionately high number of your customers in a certain age range are detractors, which tells you that you’re missing the mark in serving that age group’s needs. Or, you might find that customers in a particular geographic location are especially likely to be promoters, which tells you that your team servicing that area is doing an outstanding job and may be able to train their colleagues in other locations.
When you make changes to your business to reflect customers’ wants from their feedback, sing it from the rooftops! Run ad campaigns to let customers know that you heard them and you’ve made your business better for them. This makes customers feel more positively about you because you did something rare – listened to them – and it encourages passives who are on the fence about you to give you another try.
Getting Your NPS
Ready to find out where you stand with your customers? Schedule a GroupSolver demo to learn more about our survey tool and how we can help you find your NPS and track your progress.
