What is Net Promoter Score (NPS) all about? Why is NPS important for your company, and how can you improve your NPS? The loyalty of your customer can be measured in this metric through one specific question: “How likely is it that you would recommend us to a colleague or friend?” The question is answered by the customer on a scale from 0 to 10. Depending on the score, the input of the customer is translated into one of three categories. A score of 9 to 10 means that your customer is a promoter. Promoters are viewed as loyal customers who will provide you with repeat business and talk about your company in a positive manner. In NPS terms, promoters are the ones who fuel your company with increased revenue and increased growth. As long as they are happy, they will promote your company free of charge. Scoring 7 to 8 means that your customer is a passive. Passives are viewed as content and satisfied customers, but will most likely not go out of their way to promote your company. The passives, in NPS theory, are prone to convert if your competitors provide a better offer. A score of 0 to 6 means your customer is a detractor. Detractors are most often unhappy customers who will not recommend your company, and probably talk about your company in a negative manner. The detractors are dangerous and harmful for your company if left unattended.
Think of NPS as a temperature gauge for your company, similarly to when you check your own temperature when you’re sick. The temperature shows you that something is wrong, but it does not specify the exact issue. When you get sick and the temperature shows that you’re having a fever, you go to the hospital. The doctor does not conduct every single test available to them in the hospital, as it would only provide them with massive amounts of data that would confuse them, the tests are expensive, and sometimes different tests will give you different diagnosis. When you go to the doctor, they systematically gather data from where the issue most likely exists. After identifying the issue, they prescribe you the correct medicine and you’re temperature goes down. They don’t spend resources unnecessarily. The same idea applies to your company’s NPS. The equation for the NPS value is very straightforward: % Promoters - % Detractors = Net Promoter Score
Now that you know the theory, how do you increase your NPS? Firstly, focus on your detractors. They contain the highest improvement potential, and they are the most urgent group to address as they actively harm your revenues, profits and growth. Actively seek feedback and identify exactly why they are not satisfied customers. Once you identify your weak points, address them immediately with the intention of permanently fixing them, and avoid temporary fixes. A detractor usually has had a bad experience dealing with your company. Perhaps your product needs to improve in quality, you ship your items late, they experience payment issues or they had a bad conversation with one of your customer service agents. Identify where you have to improve, and take the necessary steps to provide a better service to your customer. They don’t dislike you without reason.
Secondly, focus on your passives. Passives are your “meh” customers who didn’t have a bad experience, but they didn’t really have a good experience either. They got what they wanted, but it wasn’t anything special. Passives are prone to do their business at your competitor given a better offer. But if you manage to gather relevant feedback from this group, the steps you need to take to convert them into loyal promoters are very few. Identify which of your departments have the greatest improvement potential and focus on one department at a time, starting with where your feedback is pointing. Continuously gather feedback to track your NPS score. Focus on providing the best possible experience for your customer.
In order to gauge the temperature of your company, feedback is essential. Treating any illness without a proper diagnosis is expensive and time-consuming. Treat your customer feedback as gold and keep it organized. Continuously track your NPS and deal with any issues you uncover. Customer retention comes through providing excellent customer service and quality products. When issues arise, or you find yourself in a situation where you need to apologise, deal with it immediately and properly.