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Net Promoter® Score, more commonly referred to as NPS, is a useful tool used by many businesses to evaluate customer satisfaction and loyalty. So, just why is Net Promoter Score important, and does it always matter?

Benefits of NPS

There are lots of positive reasons for businesses to use NPS. Essentially, it is a very quick and simple way to effectively obtain feedback from customers about what they think of your products, services or their experiences of your brand.

By using a simple metric to calculate NPS, businesses can identify the number of brand supporters they have, and how likely these are to recommend you to others. Crucially, the score can give you an understanding of the extent of how much people are dissatisfied with your business, and the reasons why. This means that you can use NPS to help improve your offering and customer experiences while opening up channels of communication with customers.

When customers are asked about what they think of your business through a very short survey, this also shows to them that you care about what they think, and having net promoter certification can have a positive impact on customer loyalty.

Another one of the benefits of Net Promoter Score is that by adopting this system company-wide, it can help employees align to the same goals, and encourage a team-working mentality.

How Do You Work Out NPS?

Working out NPS is easy, and it's for this reason that it's such a valuable tool for businesses. You simply provide a short survey for customers, which involves them ranking on a scale of 0 to 10 how likely they are to recommend you to others. From the answers, you can identify those who are promoters of your brand (9-10 scores), as well as the detractors (0-6 scores) and passives (7-8 scores).

A final Net Promoter Score is achieved by taking away the percentage of detractor responses from the promoter percentage, with scores ranging from -100 to 100.

When NPS Doesn't Matter

There are some occasions where using NPS may be pointless. For instance, in the financial services sector, some advisors are not inclined to recommend one company over another. Similarly, customers may not be willing to recommend services they've received.

Implementing NPS

It's also important to make sure that NPS is implemented correctly to achieve reliable and accurate results. Businesses need to be mindful of not introducing any bias into the procedures, and are consistent in how they measure metrics, taking both the opinions of supporters as well as detractors into account. NPS also needs to be measured on a regular basis to obtain meaningful results.

It's important to keep in mind that NPS is a system, not simply a score. Therefore, it’s not just about keeping track of the specific number, but about the business benefits of what you do with the information.

If you'd like to understand more about how NPS can help your business, speak to the experts at Investor in Customers.

Net Promoter, Net Promoter Score, and NPS are trademarks of Satmetrix Systems, Inc., Bain & Company, Inc., and Fred Reichheld.

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