Net Promoter Score (NPS®) is an effective method to measure, understand and act on the experiences of your customers. Due to its effectiveness, NPS has become a method that many successful organizations exercise to create better customer experiences and more loyal customers and as a result from that, increase their general sales.
Satisfied customers are happy and have received the experience that they expected. Loyal customers, however, experience that they have received more than what they expected, and as a result, are less sensitive to price and are willing to buy more. They are your ambassadors in the market and have the potential to attract new customers. On the contrary, unsatisfied customers overload customer service, are more expensive to maintain and will happily share their bad experiences. They are happy to switch to another brand or company and they are the most expensive customers to encourage to buy. With an NPS-based loyalty program you will achieve crucial knowledge, simple and effectively, about the experiences of your loyal, passive and unsatisfied customers so that you will know to handle them.
THE NPS METHOD – HOW DOES IT WORK?
The reason that Net Promoter Score has become an international standard is that it is a very simple way of measuring and that the linear connection between Net Promoter Score and growth is documented. Net Promoter Score is called “The Ultimate Question” as you will only ask your customers one question and index the based on their responses:
“How likely is it that you will recommend our company/product and why?”
The Response is valued on a scale from 0-10. You can then classify the customers in three groups, based on their responses.
- Promoters (scores 9-10) are loyal enthusiasts that will keep purchasing and who are often recommending your organization or product to others. These customers are strengthening the organizations brand through positive Word-of-mouth and are often creating profitable sustainable growth.
- Passives (scores 7-8)are satisfied but without specific preferences for your organization and “Passives” will therefore be susceptible to your competitors offers.
- Detractors (scores 0-6) are unsatisfied customers that could potentially damage the organizations brand and prevent growth in the organization through negative mention.
HOW DOES ONE CALCULATE THE NET PROMOTER SCORE?
To calculate the NPS of an organization or a product, one would detract the percentage of detractors from the percentage of promoters. This will result in a score of the total customer experience between -100 and 100.
WHAT COULD WE HAVE DONE BETTER?
WHAT DOES IT TAKE TO REACH A 10?
WHAT IS THE RESON FOR YOUR POSITIVE RATING?
By giving the respondents the opportunity to elaborate on their answers you are not affecting the response but will the receive the tool to understand the reasons for the respondent’s answer. This means that you do not have ask more questions, as the respondents will tell you what is most important to them.
This is the core of the NPS-method. Only asking questions on the premises of the receiver instead of a series of questions that the sender think is important. We give the respondent the opportunity to share exactly what is important for them.
CUSTOMER EXPERIENCE MANAGEMENT WITH THE NPS-METHOD
NPS does more than just measure customer loyalty. It is also an effective method to measure and act based on customer experiences. By rephrasing the question slightly, you can adapt it to all of your organization’s touchpoints. In doing so, you can use the same method throughout the entire organization, from customer service, sales, delivery or in your marketing.
Here, you will receive the primary inputs of the respondent for the specific experience. Instead of asking your customer a long list of questions about their experiences once a year, which they might not find relevant, you will ask your questions in the actual situation. That increases the questions relevance for the recipient, and you will receive the answer while you are still able to act on it.
With NPS.Today you can combine satisfactory and loyalty measurements in one total solution based on the NPS-method. Furthermore, you have the opportunity to ask the NPS-question, and the specific questions that you need to ask, in every transaction, touchpoint and channels throughout the customer experience.
Do you want to know more about how you can convert your annual customer investigations to operational NPS? Reach out for us now!