What is NPS: Definition, Techniques, Tools and Tips

Rachael Royds of CallMiner gives the definition of Net Promoter score, and some key tips and techniques to make sure you can use it to the best extent.

A Net Promoter Score (NPS) is one of several scoring methods companies use to measure the customer experience and gauge customer satisfaction. Specifically, NPS is a value or metric used to gauge how happy and loyal customers are to a brand or organisation.

Customers and clients with a higher NPS are more likely to tell (and even recruit) others to use those products. Essentially, the goal of tracking NPS is to get more customers promoting products, services, and brands to their friends.

Promotion can be achieved both directly and indirectly. For instance, if an Apple user pulls out their Macbook in a coffee shop, that user is indirectly endorsing the popular tech brand.

An example of direct influence would be if a friend asks an Apple user for laptop recommendations and the user willingly attempts to convince their friend to get an Apple device.

How NPS Works

NPS is a simple customer surveying method, relying on just one question: How likely are you to recommend our brand to a colleague, family member, or friend?

The customer rates your brand on a scale of 1 to 10, 10 being the most likely to recommend your brand and 1 being the least likely to recommend your brand. Responses are grouped into one of three categories:

• Promoters: Scores of 9 and 10 are the most loyal customers who are energetic about spreading the word about your brand.
• Passive: Scores of 7 or 8 are generally passive customers who are mostly satisfied, but not necessarily loyal. These customers are likely to switch to competitors if they get a better deal.
• Detractors: Customers giving scores between 0 and 6 are dissatisfied with your brand.

The percentage of promoters minus the percentage of detractors represents your NPS.

Benefits of Improving and Tracking Customer NPS

There are multiple benefits which may entice you to improve and track net promoter scores. It should come as no surprise that a high NPS can improve revenue. But here are some benefits you may not have considered.

• Repeat Business: Sure, the promoter score is to track the likelihood of customers talking to others. That said, it’s also a great way to see if customers are likely to do repeat business with your company.
• Highlight Potential Improvements: When you implement an NPS program, you may see areas that could use some tweaking. After all, it is a metric and those numbers can always be improved.
• Naturally Raises Brand Awareness: If others are promoting your brand, it will create a greater awareness. Not only will recognition increase, it will be an organic means of potential customers coming to your brand.
• Naturally Connects Your Business: Everyone is involved in improving the NPS. Product managers implement changes that make customers happier, marketing and sales use language to better recruit the right customers and the support team takes great care of clients to see them become promoters.

Techniques and Tools for Improving NPS

Your NPS isn’t static; in fact, you should always be working towards improving your Net Promoter Score. The higher, the better. These tools will help you gain better insight into customer sentiment and make informed decisions to enhance customer satisfaction and loyalty.

• Survey Tools: Sending current and former customers surveys to find out things like what they enjoy (or don’t), why they bought or left, and other questions are great ways to find out why customers promote you.
• Automation Tools: Personalising and automating interactions plays an important role in both tracking and improving NPS. Automation tools allow the ability to send emails and other messages at the perfect moment.
• Listening: The technique of listening is a hard one. Getting on the phone with customers to hear, rather than sell, is important. Instead of talking, listen and ask follow-up questions to get to the real “why.”
• Mapping: Putting together a visual aid to see how people find out about you all the way to the point of purchase can have a huge impact on how people see your brand.

NPS shouldn’t be used as a solitary measure of customer loyalty, either. Tools such as speech analytics software make it possible to organise data from multiple channels, allowing you to analyse the results of customer interactions alongside survey scores such as NPS.

3 Net Promoter Score Tips from Experts

To use NPS to the fullest potential, follow these expert tips and best practices.

Be dedicated to customer success.

Your customers should know that you’re deeply invested in their success. NPS helps your company demonstrate this investment by proactively asking for customers’ feedback which shows that you really care about improving their future experience.

USAA embraces this concept as it’s one of the top performing companies ranked by NPS. Additionally, all three of their service offers (banking, insurance, credit cards) were ranked in the top ten for their distinctive product categories. This significantly benefits the company because USAA can show these rankings to their customers as a means to build credibility.

USAA also uses an internal NPS to develop their products and services. They created the Innovation Community for Enterprise which encourages their employees to submit new ideas. This allows them to overcome data silos and gain perspective from departments that aren’t typically involved in the process.

– Nichole Elizabeth DeMeré, HubSpot

Make sure everyone is onboard.

It’s important that everyone in your organisation understand what the Net Promoter Score is and why it’s important to improve it. Since improving your score means making unhappy customers happy, you need to make sure that your entire staff knows what you are trying to achieve, especially those who come into direct contact with customers.

You also want to get everyone on board because you never know where a good idea may come from. Converting unenthusiastic customers into loyal promoters will require a group effort and the best ideas often come from the unlikeliest of sources.

–  CloudCherry

Remember that NPS isn’t the only metric that matters.

Using the NPS scoring system as an analogy, I am neither a promoter nor a detractor of the methodology – although I would say the same thing for any customer feedback mechanism.

As I will tell any business that asks me – every organisation is different – different customers; employees; business structure; issues; environment etc. What each individual organisation needs to do to improve the customer experience will dependent on its situation. This includes the adoption of a customer feedback programme.

NPS is a very effective tool to help a business understand customer loyalty – but it does not apply to every business. I have very successfully encouraged organisations to adopt it.  These tend to be businesses looking to grow – the more likely one customer is to recommend the business to someone else, the greater the likelihood is that they will achieve the growth they are looking for.

NPS is obviously not the only customer feedback mechanism available. Customer Satisfaction is very commonly deployed, whilst ‘Customer Effort Score’ has become more prominent in the last couple of years.

None is right, none is wrong – what is important is that an organisation deploys what is right for them. More often than not, I will recommend using two methods – one to galvanise support in the organisation, and one to provide a granular understanding of the priorities for improvement.

– Ian Golding, Customer Experience Consultancy

Author: Guest Author