NPS (Net Promoter Score) – Implementation and Calculation

Do you know what is NPS?

When you use/ consume any product or service from any company, if you feel good and fulfill your needs, you may recommend it to your friends and family.

The product maker or the company uses a measurement system to evaluate the customer experience, customer loyalty, and customer satisfaction.

 This measurement is based on scores & it is called Net Promoter Score (NPS).

What’s in this article?

What is the Net Promoter Score?

FRED Reichheld developed Net Promoter Score at Payne & co. in 2003.

Net Promoter Score (NPS) is a natural, reliable, and customer-centric tool for the company’s management to measure customer loyalty and satisfaction with their products or services.

NPS used by a small medium and large company to assess their customers 

It is an essential metric for growth-driven technology businesses.

You can measure it by asking one simple question to your customers

“How likely are you suggest our company’s products or services to your friends/colleagues/family?”

How to Calculate NPS?

1. For NPS calculation you need to ask your customer through a survey on how likely you would recommend our products or services to your friends and family on a scale of 0 to 10,
2. Categorize all responses according to their scores :

• Detractor, if customers gave you scores between 0 to 6.
• Passives, if customers gave you ratings between 7 to 8.
• Promoters, if customers gave you scores between 9 to10.

Now subtract the percentage of detectors responses from the percentage of promoter responses to determine your NPS that maybe range from – 100 to 100.

Promoters are loyal and well-wisher customers.

Leveraging Promoters (9-10)

• Referral program
• Ask them to leave reviews
• Testimonials
• Social sharing
• Send them swag

Nature of a Promoter (9-10)

• Defenders/advocates of your brand
• Loyal and Enthusiastic
• Always refer you to others.
• Renew, Expand, and promote your product.

Passives are Satisfied with your Products but not like Promoters

Nature of a Passives (7-8)

• Satisfied with your product but not enough like a promoter.
• Unenthusiastic
• Not loyal too much.
• If your competitor gives them a better deal, they may switch.
• They are Price sensitive.

Detractors are unsatisfied with your services, centers who won’t buy from you again, and may even intimidate others from buying from you

Nature of a Detractor (0-6)

• They Speak louder than your promoters.
• They might share negative experiences.
• Hicustomer’sof customer’s switch
• You could not build loyalty or a long-lasting relationship with them till yet
• They are dissatisfied with your product.

Why NPS Matters?

1. It helps to Identify the market position and ideal customers
2. It helps to increase sales and revenue dramatically
3. Helps to gain key messages
4. Helps to prepare for objections
5. Consistent referrals and references
6. NPS helps to create Customer stories and personal Interactions
7. Trends and themes to inform product development
8. It gives motivation for prospects tell lead scoring
9. NPS reduces the volume of future support needed

How to Take NPS Data?

To collect data for Net Promoter Score you need to make a feedback form and you have to request your customer to fill that form in order to enhance customer experience.

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When to Survey?

• Establish a regular Don’t cycle

• Don’t survey too frequently

• Align your transactional survey with essential points in the customer journey

• Avoid batch of customers

• Coordinate with other teams to have a comprehensive survey plan

Who to Survey?

• All contacts, including customers, policymakers, and key shareholders.
• Don’t avoid surveying unhappy customers.
• Don’t survey too early
• Don’t incentivize

Where to Survey?

In-App

Pros

Higher response rate

More relevant feedback

E-mail

Pros

Less likely to be based on a particular transaction or workflow

Cons

Lower response rates, resulting in less accurate results.

Examples of Some NPS survey Question

You may ask some questions in the NPS survey form like

• On a scale of 0-10, how likely are you to recommend our products/services to your friends?
• What is the primary reason for your score?
• How can we improve your experience?
• Which product/ service features do you like?
• What was disappointing in your experience with us?

Why is NPS Important?

1. It helps to measure the loyalty of your customer

2. It helps to improve your services

3. It improves customer’s experience 

4. It can find detractors so that we can reach them and improve the loopholes.

How to Increase your Response Rate?

1. Send your survey from a human
2. Set expectations in the subject line
3. Make your call to action clear
4. Ask no more than 2-3 questions
5. Send a survey reminder
6. Follow up with everyone who responds
7. Send more than one survey per year and be consistent.

Conclusion

Measurement of NPS is essential for every business so that they can improve and give better customer experience to their customer.

The product maker or the company uses a measurement system to evaluate the customer experience, customer loyalty, and customer satisfaction. This measurement is based on scores. Hence it is called Net Promoter Score.

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