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4 Things a Net Promoter Score℠ (NPS®) Can Do for Your Business

Think about a brand you absolutely love. They’ve got a five-star product in your opinion, or you’ve fallen for their fantastic performance, or you’re super happy with how they manage their business. On a scale of 0-10, how likely would you be to recommend that brand’s products or services to a friend? If you answered 9 or 10, you can consider yourself a promoter.

This idea serves as the foundation of the Net Promoter Score℠ (NPS®).

A Net Promoter Score is a way to measure the loyalty between a company and its customers. The measurement comes from a score calculated based on the answer to this question:

On a scale of 0-10, how likely are you to recommend this product/service/company to a friend or colleague?

clipboard showing customer satisfaction scores similar to NPSBased on their answers, customers are categorized into one of the following three groups:

  • Score of 0-6: Detractors. Not likely to recommend. These customers are overall unhappy with your brand and can cause damage through negative word-of-mouth talk.
  • Score of 7-8: Passives. Somewhat likely to recommend. These people don’t hate your brand, but they’re not thrilled with it either. They might easily switch to a competitor; they lack brand loyalty.
  • Score of 9-10. Promoters. Extremely likely to recommend. These respondents love you. They are your repeat customers, and they’ll happily tell others how satisfied they are with you.

To calculate your NPS®, you take the percentage of customers who are promoters minus the percentage who are detractors. You end up with a score between -100 and 100. The higher the score, the more promoters you have, and the better you can infer your business is performing.

According to Bain & Company, which first introduced NPS®, “High scores on this question correlated strongly with repurchases, referrals and other actions that contribute to a company’s growth.” And their case studies show that the NPS® question is tops when it comes to predicting behavior. Therefore, the score is often seen as a good indicator of future growth.

When looking at your NPS®, here are four things your score can tell you:
  1. It can show what your company is doing well. Higher scores often reflect a healthy business. Results can reveal areas of strength that should be maintained or built up even further.
  2. It can uncover what needs to be fixed or improved. A lower score can indicate the need for probing into customer satisfaction or loyalty issues.
  3. It can initiate relationship building. The Net Promoter SystemSM encourages reaching out to customers to address their concerns, leading to one-on-one interactions that can be powerful.
  4. It can help motivate employees. Feedback related to your score can give your team members incentive for making improvements and providing a great customer experience.

Companies in all types of industries are using Net Promoter Score® – from financial to healthcare, tech to retail, and more. CSP is licensed to use the NPS®, as well as other metrics, to help businesses grow loyalty and customer satisfaction. To know more about how we incorporate these powerful analytics into a customer experience strategy, contact CSP with your questions.

 

Net Promoter, NPS, and the NPS-related emoticons are registered trademarks, and Net Promoter Score and Net Promoter System are service marks, of Bain & Company, Inc., Satmetrix Systems, Inc. and Fred Reichheld.

Sources:

http://www.medallia.com/
http://www.netpromotersystem.com/
https://www.netpromoter.com/




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