Net Promoter Score – or NPS – is based on one simple question asking customers what the likelihood is (on a scale of 0 to 10) that they would recommend a company, product or service to a colleague or friend. Where 0 is “not at all likely” and 10 is “extremely likely” to recommend. A high NPS can be a good indicator of future business growth. This is why NPS is important to a company.
Why do we measure NPS?
Positive word-of-mouth has a big impact on a business. At its heart, a high net promoter score is about the customer experience (or CX). People are much more likely to recommend a company if an experience has been positive. A poor review can have a big effect on a company’s reputation and sales. While a positive recommendation is a good indication of loyalty and the potential for referrals.
Understanding the drivers of customer experience is crucial to know what levers to pull to drive advocacy, loyalty and conversion with customers. This enables organizations to create a positive experience and build loyalty.
How do you measure NPS?
The ratings are grouped into detractors, passive and promoters. To calculate the net promoter score you subtract the percentage of detractors from the percentage of promoters. The value of the range will be between -100 and 100. Can we recreate something like this graphic I snipped below?
What is a high NPS score an indication of?
- Customer satisfaction and loyalty
- Strong commercial foundations
- Advocacy that drives growth.
How do you improve customer experience?
NPS is a simple measure of customer experience. However, there is no one metric that will tell you everything, so it’s important to use more than one metric. There are other ways to measure the customer experience and improve the customer journey. This can involve interviews ‘on location’ or during usage to obtain the most accurate read. It can also include:
- Online research
- CATI (telephone interviewing)
- Web pop up
- App based research.
Measurement should always be against a competitor set, over time, or between different customer segments – it needs to be looked at in context.
A customer experience programme includes trackers built around customer touchpoints. Touchpoints include research, purchase point, product or service experience, problem resolution, repurchase and exit. There are opportunities to both delight – but also lose customers (or potential customers) – along the customer journey. If an organisation understands this journey, it makes it easier to optimise CX performance.
What are the principles of CX research?
Why is customer experience research so important to a company? Because it uncovers every opportunity to create positive experiences and build loyalty. And, when it comes to CX research, it’s important to start with external and internal research, and existing data sources. This will help organizations better understand the ‘what’ and the ‘why’.
No customer experience is the same and is affected by different needs, triggers, touchpoints and channels; each specific segment or profile may need a different approach when it comes to research.
Finally, the organisation must then use those insights to take specific action to improve the customer experience. This last part forms the basis of a customer experience programme that’s based on improvement – not just tracking or measurement.
Summary: the importance of NPS and a great customer experience
NPS is a quick and simple way to find out levels of customer satisfaction with a product or service based on the likelihood that a customer would recommend the company to a friend or colleague, using a 0 to 10 rating. It provides a snapshot in time and can flag up any warning signs.
NPS scores can go up or down based on factors that are out of the control of an organisation, therefore it’s important to consider the context. It is always good to use more than one metric when investigating the full customer experience as this provides a more complete picture on which to make changes that will improve the customer journey. It’s vital to measure what matters most to customers and that will be different for every company.
Get in contact
To learn more about how we could help you successfully measuring customer experience (CX) and help you remove pain points, optimize relationships, and ultimately – maximise revenue, please get in touch.