Are you an entrepreneur or a business owner who likes to keep all aspects of their business in check? Do you weigh all factors before strategizing a growth plan for your business? If you put in the effort to know your customers, your employees, their happiness, their satisfaction, and how it directly relates to your sales, you might want to slide in another consideration - your company’s Net Promoter Score.
What is the Net Promoter Score?
The Net Promoter Score (NPS) is a technique used to measure a company’s customer engagement and loyalty. The NPS survey measures your company’s “promoters”, those who recommend you to others; and “detractors”, those who do not recommend you to others.
Every company wants to increase its customer base. For a company to be more attractive to potential customers, it is important to have a good Net Promoter Score.
The Net Promoter Score survey enables the customer’s loyalty to be calculated. This loyalty enables the company to understand which part of its customer base is most loyal. It also helps the company plan and designs its customer acquisition and retention strategies.
Organizations have been using NPS over the years to differentiate the promoters from the detractors amongst their user base. This helps them to personalize their communication and strengthen the feedback loop. The companies that have high NPS are referred to as high promoters and low NPS companies are low promoters.
How to analyze NPS score?
You should have seen a similar survey ruler in many applications. Sometimes it has numbers, sometimes emojis. The goal of this scale is to understand a customer’s experience and their likelihood to recommend your company or product. According to the NPS concept, customers can be grouped into three groups based on where they rate your company on this scale:
- Those who give you high scores, good reviews, and recommendations.
- Those who give you a medium score, not-so-good reviews, and don’t bother to recommend you.
- And those who give you a low score and have had a bad experience with your business.
The high-scorers are referred to as the ‘promoters’. Promoters are the customer base that thinks highly of your company and recommends your products and services. They feel that they benefit when they use your products. Promoters are not only satisfied with the products or services they receive but also with the company, they deal with. They show high levels of satisfaction and give their companies positive recommendations.
It is possible to generate more promoters by providing good customer service. Your company will look trustworthy if it is doing the right things to create positive emotions in customers. This can be done by giving your customers high-quality products and services. You should also do things to show customers that your company cares about them. It is important to know your customers’ needs and solve their problems in order to get high scorers.
High-scorers can be your ambassadors. They can help your company to have a strong reputation. Thus, it is important to make the most of the high scorers. You can do this by asking the high scorers about their expectations. And then use the information to improve your products or services. You should also thank the high scorers by giving them special offers and discounts.
The medium-scorers are referred to as the “passives”. They are a substantial group of customers that are relatively disinterested in your company. In other words, they are not your best brand ambassadors.
Medium-scorers can make the most impact on the company’s performance by forming the majority of the market. These customers are more prone to rejecting market changes and there are fewer customers that can be persuaded into becoming brand ambassadors.
They can affect your brand loyalty, lowering your NPS score, and thereby also reducing your company’s profit. Medium-scorers should be managed carefully as they can reduce the profitability of your company. You may not be able to change their minds, but converting a medium-scorer to a promoter shouldn’t take you anything more than improving product and service quality.
The last group is the low-scoring customers, also known as the “detractors”. These are the customers that give your company the lowest scores. These customers are not your best brand ambassadors either. They are the least engaged with your brand and their brand loyalty is usually low.
These customers can influence other customers to change their perception of your brand. There are several ways that these customers can arise. Low-scorers are dissatisfied with your products or services or have had negative experiences with your company. These experiences can include poor customer service or a lack of responsiveness.
Although low-scorers are the least engaged, they are also the most likely to improve. You can redeem these customers by giving them the attention and service they need. One should do this by listening to their issues and fixing them. You should also allow the low-scorers to have an impact on your company.
For example, if you listened to the low-scorers, you could look for ways to improve your company. You could also improve your customer service. By doing this, you will earn the low scorers’ trust and loyalty.
Why should you conduct an NPS survey?
A large number of SaaS providers sell products or services which can be consumed either in a single instance or multiple instances (e.g. Dropbox, OpenTable, Google Apps, etc.). It is observed that very few SaaS businesses in this category have an NPS survey. NPS is a very important metric to understand customer satisfaction in this category.
Businesses try to get a customer satisfaction metric by asking a single question at the end of the usage (e.g. “How would you rate our product on a scale of 1 to 5?”). But those numbers are not a good representation of customer satisfaction.
The solution to this problem is to have a survey to calculate the NPS for SaaS businesses. There are several advantages of having this survey. For example, it can help these businesses to understand their customers better and can help them to understand which of their marketing and sales activities are contributing to customer acquisition and which are not. It can also help them understand which of their product features are most important to their customers.
How is NPS measured?
The percentage of people in the ‘promoter’ group mentioned earlier is referred to as NPS. It is the most important number that represents your company’s performance. This group is the most valuable because they are your best brand ambassadors and your strongest advocates.
The percentage of promoters can be found out by conducting a strong NPS survey, where the right set of questions are asked to your customers, which in turn helps in classifying your customer base into the three discussed categories - Promoters, Passives, and Detractors.
Once the survey is complete and the customers are mapped, all that needs to be done is use this small formula to calculate your company’s NPS value:
NPS = (number of promoters - number of detractors) * 100 / (total number of customers)
NPS survey tools
There are many ways that a company can survey its customers. The most popular surveys are the ones asked in-app while a customer is browsing a company’s app or website. These surveys are usually short and conducted in bits and pieces. If your company, however, is keener on conducting a full-fledged survey, you must consider NPS surveys that can be conducted online.
The NPS survey can be conducted over a variety of mediums including mail, phone, in-store, via a website, or even online. The medium chosen depends on the target market and the resources available to you.
There are many online tools that can help you conduct an NPS survey for your business like SurveyMonkey, TypeForm, Survey Planet, etc. Another tool available for conducting surveys is Orbitrics, which allows you to create your own survey. They also provide you with an option to choose from one of their survey templates.
How to prepare an NPS survey questionnaire for businesses?
Here are a few things to keep in mind while preparing a questionnaire for an NPS survey:
- The survey should take no more than 5-10 minutes to complete. This is to ensure that a customer’s valuable time isn’t wasted.
- The questions should be a mix of yes/no and open-ended styles.
- The questions that the survey asks must be strongly related to your company, product, or service. It also needs to include disappointments faced by customers and suggestions regarding improvements.
- The survey must be designed in such a manner that it gives customers an option to give an absolutely neutral rating, in case they have not experienced any difficulty.
- It must also give them an option to provide feedback even if the experience has not been satisfactory.
- The survey must also provide them with a chance to give suggestions and comments.
- The questions must be clear and unambiguous.
NPS survey example questions
Here are 15 example questions that you can ask the customers of your business:
- On a scale of 0 to 10, how likely are you to recommend our business to a friend or colleague?
- How likely are you to recommend (product name) to a friend or colleague?
- What was missing or disappointing in your experience with us?
- How can we improve your experience?
- Which features/services do you love the most?
- What do you like the most about our company?
- What do you like the least about our company?
- How does using our product/service benefit you?
- What do you like the least about our product/service?
- What do you like the most about our product/service?
- Do you like our customer service?
- Would you like to suggest any improvements to our product?
- Would you like to suggest any improvements to our customer service?
- How can we improve your experience?
- What is an overall rating that you would like to give your experience with us?
One should target the promoters because they can increase your company’s performance. Their feedback allows you to improve the quality of your products and services. To maintain the growth of your business, you need to keep your promoters happy and find ways to get more promoters.
A good NPS value ensures that your company has a balanced customer base. That means that a high proportion of customers are likely to give you positive feedback and that there is a high number of low-scoring customers.
This means that your customers are your most loyal advocates and that your customers’ perception of your company’s brand loyalty is higher than your actual brand loyalty. This is essential to your company’s success and that’s all there is to it.
Posted in NPS