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How Net Promoter Score (NPS) can Help Your Business

November 04, 2019

The Net Promoter Score (NPS) metric can help your business determine what it’s doing right and what it could improve upon. Learn the basics of NPS here.

Have you measured customer satisfaction recently? Client loyalty is the lifeblood of any business, and surveying clients using the Net Promoter Score (NPS) metric helps businesses determine how successfully they deliver on their promises. How does it work? Let’s explore.

How does it work?

The Net Promoter Score (NPS) measures customer experience and predicts business growth.

The basic premise behind the NPS is one question “How likely are you to recommend this service to a friend?”

NPS uses a 0-10 scale, with respondents being grouped as follows:

  • Promoters (score 9-10)- Respondents who give a 9 or 10 score love the products or services that your business offers. Generally, promoters are repeat customers who recommend your products or services to others.
  • Passives (score 7-8)- Those who give a score between 7-8 are somewhat satisfied with your products or services, but could be swayed to purchase products from a competitor who may have a better offer. Passives typically won’t spread anything negative about your company but are not supportive enough to promote your products/services.
  • Detractors (score 0-6)- Those who give a 0-6 score are not happy with your company’s products or services, and likely won’t purchase again. Detractors are also likely to tell others about their negative experience.

To calculate the NPS, you subtract the percentage of detractors from the percentage of promoters (the score can range from -100 to 100). Scores above 50 are considered a “best in class” client service level.

What are the benefits to NPS?

The main benefit of NPS is that it measures the likelihood of repeat business, which helps forecast business growth and cash-flow and analyze your overall brand and customer satisfaction. In addition to this…

  1. It allows quick follow up with customers. Through NPS, businesses can share customer feedback quickly. Especially when it comes to negative feedback, it’s important to quickly contact any detractors and identify their concerns and eventually resolve problems.
  2. It is easy to use. You can conduct an NPS survey through different channels, i.e. phone, chat or through email. The survey is quick and straightforward and the results are determined by a simple calculation (no advanced formulas or analytics involved).
  3. It’s not burdensome to fill out. The NPS survey usually has two questions- one open ended and the other a 0-10 rating. NPS surveys are designed to take no more than 5 minutes to complete.
  4. It is adaptable. NPS can be used in a wide range of business settings. You don’t need high-priced third party vendors to make it work, and it can measure customer loyalty after a company merger, after launching a new product and much more.
  5. It provides the big picture. NPS measures the customer’s overall relationship with your business, rather than simply their last interaction with your business.

Questions on net promoter score and if it’s right for your business? Contact us. KLR has conducted the NPS for the past several years and has found great value in it. Check out our Impact piece, Through Their Eyes.

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