For businesses to succeed in the long-term, they need to make customer care a priority. Happy customers are more likely to be loyal customers. There’s an increased chance they’ll buy from you again or refer other customers your way.
The problem for online businesses is measuring customer happiness and loyalty. Without a proper process in place, it’s easy to look exclusively at short-term results—such as immediate revenue—rather than customer satisfaction.
Fortunately, there’s a solution: Net Promoter Score (NPS).
What does Net Promoter Score mean?
So what is NPS? NPS stands for Net Promoter Score, a metric for customer experience. The Net Promoter System was originally developed by Bain back in 2003 and was created to deliver feedback far quicker than possible with traditional customer satisfaction surveys. Today, millions of businesses use net promoter systems to measure and track how their customers rate them.
- NPS is closely associated with business growth; according to Bain, companies with leading NPS scores had double the growth rates of their competitors with average NPS results.
Where can you use NPS? The score can be used throughout your business to measure how customers feel about your company as a whole to specific products, web pages, or even reps. Depending on where and when you talk to your customers, you can rate their experience.
Bear in mind that, by itself, NPS gives you a numerical score that represents your customer loyalty. It does not tell you why the customer gave that score and why they feel that way. Still, it does provide a valuable metric. You can then use that metric to test out different approaches and measure the response, using the quick feedback to optimize your customer experience.
Using NPS to measure customer loyalty
Your NPS is based on your customers’ answer to one question:
“How likely is it that you would recommend [company] to a friend or colleague?”
The customer is asked to rate that likelihood based on a score of 0-10, from least likely to most likely.
Depending on the answer they give, respondents are classified in one of three ways using the Net Promoter Score scale:
- Promoters (score 9-10)
- Passives (score 7-8)
- Detractors (score 0-6)
At the high end of the scale, Promoters are loyal, enthusiastic. They’ll buy again, renew their subscription, and recommend you to anyone in earshot. These are the ones who’ll power your growth. These customers account for the majority of referrals you’ll get.
Passives are satisfied. They’re happy enough with their experience, and they’re not about to complain or leave scathing reviews. But they’re not particularly loyal either, and could easily go to a competitor.
Your low scorers are classed as Detractors. These customers are unhappy and are unlikely to stick around. Worse than that, they can hurt your growth by bad-mouthing you, leaving negative reviews and complaining to their friends.
One of the benefits of a NPS survey is that it takes into account how people actually act, based on their rating. For example, someone could give a score of six, which technically means they’re more likely to recommend you than not. In reality, someone who gives that score is more likely to be unsatisfied and leave a bad review. Likewise, a customer has to be absolutely positive they’ll recommend you to be rated as a promoter. Even with a score of eight, they’re unlikely to bring more customers your way.
How to calculate your NPS
Once you’ve collected your customer ratings, you can calculate your NPS.
The NPS scale itself is an absolute number (not a percentage) ranging from a minimum score of -100 to a maximum score of +100. To find your score, simply subtract the percentage of Detractors from the percentage of Promoters. So, if 45% of respondents were Promoters and 15% were Detractors, your NPS is 30.
When calculating your NPS survey results, remember that you’re only concerned with whether a respondent was a Promoter or Detractor.
It doesn’t matter if all the Detractors scored you as a zero, or if all your Promoters scored you as a ten; there’s no difference to the weighting. Similarly, Passives don’t come into your NPS scale. All that matters are your Promoters and Detractors.
Note: When and how you ask the question will have a significant effect on your results. Asking your customers by pop-up or thank-you page immediately after purchase will get a different response from emailing customers one month after the date of purchase. Make sure you’re asking at a time that makes sense for your product or service.
How to read your NPS results
Once you have your NPS score, the next question is whether it’s a good score or not. If your score is negative, that means you have more Detractors than Promoters and will struggle to grow. Conversely, any positive result means more people will be promoting you to their friends and colleagues. Obviously, the higher the score the better.
Bear in mind that each industry has different results. According to Retently, the average NPS for e-commerce is 62, while SaaS averages at just 30. That means a score of 50 would be great for a SaaS business, but concerning for an e-commerce platform.
The best way to use your NPS meaning is as a personal benchmark. See how customers are currently rating your service, then see how you can improve that score over time.
Improving your NPS score
The most straightforward way of improving your NPS score is by improving your customer experience. This means delivering an outstanding service, including support, that is focused on your customer’s satisfaction.
For example, how easy is it for your customers to get hold of support staff? Do they have to jump through hoops to find your phone number, then end up waiting on hold for hours, just to get a simple question answered?
To keep your customers happy, a click-to-call solution makes it easy for them to reach out and start a voice conversation with a real person. In turn, you can resolve their issues quickly and to their full satisfaction, making it more likely that they’ll be happy and recommend you to their friends and colleagues. For example, Devialet (a consumer electronics company) reduced wait times and provided quicker and more productive support calls. As a result, customers were happier and their NPS improved.
When talking with your customers, ensure you have all the relevant information you need to provide superior customer service. A solution like SnapCall makes it possible to see customer information (including which web page they’re calling from, their name, location, email address, etc.) for incoming calls. This cuts down on time taken identifying the customer and their potential issue, allowing reps to provide the best service possible.
Sandra Baliozian, Head of Client Services at Prismea, finds this invaluable: “It’s important for us to know who’s calling, so agents can distinguish who’s customer it is and take the call... It’s so useful to know where the customer is calling from and to see tickets from their past communication.”
By measuring your NPS, you can track your customer loyalty and predict future growth, or identify issues that need to be addressed. Once you know your NPS, you can then work on improving your score by providing the best customer service possible and improving their experience.
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