What is the Net Promoter Score and why is it important?

Net promoter score

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Think! Think beyond delivering just a service; address incoming queries with tangible solutions, minimize dissatisfaction and maximize efficiency. 

That’s how you stay competitive in the battleground called Customer Experience (CX). However, many companies have still not woken up to the reality that poor CX is eating their revenue. 

For sure, there’s a disparity between customers’ expectations and the business’s strategy. 

 In 2021, approx 49% of consumers abandoned the brands due to poor customer experience. 

That happens when businesses collect data but don’t put it to actionable use to make landmark decisions. 

Most services, especially those in a direct customer-facing vertical such as the contact centers, lack the needed education about the importance of measuring customer loyalty & outlook. 

In this discussion, we explain the Net Promoter Score/System (NPS), related strategies & their prolonged impact on the customer-business association. 

Net Promoter’s score

To put it simply, the Net Promoter Score is an index that measures customer satisfaction and furthers their loyalty in return for the service. It’s like a 5-star rating system but with a broader scope to evaluate your customer’s opinion and intent.

This means, it evaluates a customer’s likelihood to re-subscribe and refer to more users.  

While 0 to 10 is the most popular scale, brands have been customizing it for -100 to 100+ as per strategy. 

How to Calculate NPS? Understand with Example 

You conduct a survey of ‘x’ number of questions with 150 customers. The survey, most likely, is an objective questionnaire of rating the service on different parameters. 

Now, out of them, 100 customers participated in the exercise with their ratings. You get the following results:

  • 10 customers rated the service between 0-5.
    These respondents, known as detractors, are dissatisfied with the service and may not continue with the service. 
  • 50 customers rated the service between 6-8.
    These respondents, known as the passives, are somewhat satisfied with the service but have multiple complaints. 
  • 40 customers rated the service between 9-10.
    These respondents, known as the promoters are your happiest customers. They follow you diligently, are loyal and recommend your service to more users. 

The Formula to calculate:

NPS = (Number of Promoters) – (Number of Detractors)  X 100
            Number of Respondents

In the above case,

NPS = 40 – 10 X 100
        =   30


Bain & Company once conducted a landmark survey on customers of 362 services and exposed a shocking disparity. 

As per the findings, 8% of customers complained about the poor experience while 80% of the service providers were confident about superlative CX. 

The consulting firm, under the leadership of Fred Reichheld, introduced the NPS; a benchmark for business performance and a myriad of organizations are using it to better understand their customers. 

Fred Reichheld, the original author, put forward the following standards 

  •  Net – Difference between good and bad reviews. 
  • Promoter – to give a view about something whether good or bad
  • Score – the value of something in numbers.

A very basic query results in answering this major potential question and that is:

 “How would the consumer endorse the product or services of an organization to other people?”

The simplest fact is that if a customer contends with the product then only s/he would recommend it to others. This fundamental thing elucidates whether the response of the customer is positive or negative. 

Likewise, poor feedback indicates that the consumer is least likely to recommend an organization, product, or service. 

A Key Metric to Measure Customer Experience Management (CEM)

 Talking about the vitality of NPS, we need to comprehend that knowing the exact status of NPS is important. 

NPS adds to the system, still, NPS alone cannot bring everything, so we need these supporting elements to accomplish the right result. These elements will highlight the need of possessing essential monitors for the performance of NPS.

  • Add follow-up questions to know the causes of the positive or negative ratings.
  • Track feedback type – whether passive or active.
  • Try to fuel your call center executives by giving them a target of searching for more participating and energetic customers rather than those who are passive.

What is a good NPS score?

 An NPS,

  • < 0 – Brand has serious issues. Raises many red flags about the quality of product or service. 
  • Between 0 to 40 – the service is satisfactory. The customer may or may not recommend it. Indicates lots of scope for improvement. 
  • > 40 – the business is doing well with keeping customers happy.
  • > 70 – the customers love the brand, engage in upselling, react to social posts and are highly likely to recommend it. 

A good NPS can accelerate your growth by simply boosting the word of mouth referrals while cutting on costs of traditional marketing. 

In fact, as per PWC, 65% of customers find a positive experience with a service to be more impactful than their advertising campaigns. How huge is that? 

How to Improve NPS? 

There are 7 certain ways to accomplish this goal.

1. Recognizing your current status

The initial step is to comprehend the existing state of your NPS program for this self-introspection. 

Next, know how far you are getting the benefit of the feedback given by the consumers, sometimes this feedback is not even noticed thus the efforts made in calling and asking for their feedback prove unworthy. 

Cover all vital points in the survey form and feedback formats and they are not confusing at all.

2. Bridging the gaps

From top to bottom, include everyone in the exercise. Ensure that the NPS earns participation from all levels, from top management to employees at the bottom of the hierarchy. 

Set the training for agents as per the findings from the NPS. To ensure optimal returns from the effort, circulate the findings to everyone including sales.

The customer care executives should also be a vital part of NPS and they must be encouraged by revealing that they are performing well and contributing constructively to the growth. 

A chain of events occurring like receiving the feedback back, connecting with the sales team, and even involvement of top management and front desk executives in the process is important.

3. Not ignoring the detractors

If you intend to have an NPS analysis then a major factor knows the reasons for low marking given by the consumers. 

Promoters are the customers with rating 9 or 10; a 7 to 8 rating goes for the Passives while a 0 to 6 rating essentially reveals that they are the Detractors. 

Comprehending the problems of detractors and improving them can help businesses grow tremendously. So ignoring the detractors is injurious to the health of a business.

4. Smarter Root-Cause Analysis 

 As discussed in the beginning, most companies collect big data but don’t have the expertise to put it to actionable use. 

An NPS campaign may attract a diverse range of feedback on different questions from different types of customers. 

 Usually, this makes it difficult for businesses to consume the right data simply because they have too much of it. 

 AI can help here by instantly filtering the most important issues. 

 Enthu.AI for example consumes machine learning expertise to crawl through big data generated from the campaign and ultimately group the most important concerns. 

 This is a great hack to forward valuable feed to the trainers and their agents.

5. Kill the Waiting period to avoid negative NPS ratings

Most often in call centres, there is a long queue of consumers, who are waiting to get their problems sorted out, this might annoy them and can negatively affect the feedback system. 

So the most avoidable thing is to keep them waiting and transferring calls un-necessarily to multiple departments.

Businesses are required to perform introspection and find ways to repair the flaws.

6. Designate the task well to strengthen NPS

Designation of the tasks effectively to varied departments makes the whole method more interesting but integrating the main outcome is also an essential task. 

Integrate various departments with one goal and they must be effectively given and trained for their tasks. 

This will no doubt boost up the NPS scoring and obtain the dividend.

7. Valuing the Client

Consistency in providing solutions and achieving CSAT which is the contentment of the client is the main aim to set up the NPS system, thus the practical targeting is done as an initial step then setting benchmarks and reducing the response time. 

 Moreover, the intervals between sending surveys must not be too long or shorter and they must reach the persons who are using the products or services and the channels should be apt. 

How to Build an Effective Strategy to Improve Your NPS score? 12-Point Checklist to Follow

 Making an efficacious strategy is a daunting task and it can be done effectively in the manner defined below:

  1. Structure a personalized NPS survey and white label the form.
  2.  Be punctual and set the time intervals and accountability for each task. NPS should not contain long conversations and interactions, till they are critically required.
  3. Do it the right way and use the proper mediums like SMS, text, or email according to the individual needs.
  4.  Never ignore any details like follow-up & queries, you must find out the real reasons why it is happening and should solve the problem there and then
  5.  Review the VOC dashboard & monitor performance metrics. Find the detractors, passives, and promoters.
  6.  Satisfying detractors by positively interacting with them. Always probe into the details of loyal clients and admirers. Look into their feedback.
  7.  Notice high CLV customers and prompt them to respond, and address them individually.
  8. Combine CSAT and CES with NPS to make it more effective. Integrate CSAT and CES (consumer electronics show) with NPS and even bridge the gaps which can delay the solution providing process.
  9.  Converting slow responding customers to high responding customers, changing detractors into loyal customers, and remembering polite words can do a lot.
  10. Remind everyone that unresponsive customers should not be ignored at all.
  11. Monitor, review and check all the parameters that are strictly adhered to or not.
  12. The levels from top to bottom are to be indulged and should be aligned with the organizational goal, sometimes call centers are treated as completely separate units which is not a robust way to deal with them. 

Global NPS for Different Sectors in 2020

In these insightful findings from Statista, NPS varied drastically from sector to sector in the COVID ridden 2020. 

While the training & education sector recorded an NPSD of 71, others such as healthcare were as low as 24. 

Remember, the healthcare infrastructure had almost choked resulting in major dissatisfaction among consumers. 

What does this signify? External factors directly impact a brand’s NPS. It is also not incorrect to say that NPS evaluates your service’s performance in high-pressure circumstances.  

Convert Your NPS to Leads 

So far we explained NPS, its importance and best practices for optimal application. It is clear that a successful NPS campaign provides constructive feedback to non-performing teams or individuals. Make sure to conduct NPS surveys on a recurring basis. Feed your teams with the latest and accurate data. Embrace automation solutions to calculate NPS insights, identify gaps quickly and take effective decisions.

Intrigued? We’d like to prove how Enthu.AI produces smart insights from your NPS campaign and pin-points the exact areas. Ask for a demo Now !

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