Net promoter score or the NPS as it is often called, was first introduced to the world by Fred Reichheld in 2003. It first appeared as an article in the Harvard Business Review. Since then, it has become a standardized metric of understanding if customers are satisfied with the product or service.  NPS measures customer satisfaction by means of seeking response based on their interaction with the brand.  

What is an NPS survey?

The NPS survey scale is denoted from the number of 0 to 10. The scale will ask users how likely they are to recommend that particular brand to friends and family. The numbers from 0 to 6 denote a detractor. The numbers of 7 and 8 denote a passive customer. The numbers of 9 and 10 denote a promoter.

A detractor can be someone who dislikes the entire experience. Their word of mouth or online review could spell a disaster for the brand. A detractor needs to be given immediate attention to close any feedback loop.

A passive is a customer who could be indifferent to the brand. They may not talk about the brand openly, but at the same time, they may not promote the brand among peers.

The promoter is seen as a happy customer who would come back to the brand for renewed purchase. They are often seen as brand champions, brand loyalists, and patrons. It is assumed that promoters are happy with the entire experience and could be potential customers for upselling or cross selling.

The main question: why are NPS surveys important?

Introducing NPS surveys into your business strategy can provide invaluable insights into customer loyalty and satisfaction. By measuring the likelihood of customers recommending your business, you gain an understanding of what drives brand advocacy and which areas require improvement.

Furthermore, NPS surveys allow you to track changes in customer loyalty over time, providing a means of benchmarking progress towards achieving your business objectives. With this data in hand, businesses can make data-driven decisions about where to focus their resources to maximize customer satisfaction and loyalty. Even though this can be a regular part of your business strategy, it can help you stay ahead of the competition by ensuring that you always have a finger on the pulse of your customers’ needs.

Benefits of Net Promoter Score Surveys for Customer Loyalty

The NPS is a valuable tool to understand loyal customers, attend to unhappy consumers and work towards business growth. Here are some key points where this metric can augment customer loyalty:

Identify promoter, passives and detractors:

The NPS survey categorizes respondents into three groups based on their likelihood to recommend any product or service: Promoters (score 9-10), Passives (score 7-8), and Detractors (score 0-6). This segmentation helps businesses understand their customer base and provides a starting point for analyzing loyalty. By identifying each group, companies can focus on turning detractors into promoters by closing feedback loop, catering to their preferances and offering solutions for a negative experience. On the other hand, this metric can help cater to passive respondents and solidify their brand loyalty.

Measuring customer loyalty:

The NPS survey is a standardized and a quantifiable metric for customer loyalty. NPS calculation is achieved by percentage of Promoters minus the percentage of Detractors. In this manner, organizations can track their loyalty trends over time. This numerical score enables businesses to set benchmarks, monitor improvements, and compare themselves to industry standards, fostering a culture of continuous improvement.

Predicting business growth:

Higher NPS scores are often indicative of a healthier customer base and can be used as a predictive indicator of future growth and revenue generation. There is a strong correlation between the NPS measurement metric and business growth. Promoters, who are highly likely to recommend a brand, can act as brand advocates. Happy customers (promoters) are the reason behind positive word-of-mouth, referrals, and new customers.

Actionable insights for marketers:

NPS surveys provide customers with an opportunity to provide feedback on their experience. Their feedback also includes valuable insights into areas of improvement. The open-ended question typically included at the end of the survey allows customers to express their thoughts, suggestions, and concerns. This feedback can be used to identify specific pain points, make necessary adjustments, and address customer concerns promptly. Closing the feedback loop at the earliest is often rewarded with customer satisfaction and loyalty.

Allocating resources effectively:

Due to the specific nature of the feedback collection, customers are vocal about their experience. The survey results can help organizations prioritize resources and initiatives. By getting deeper insights into certain areas of development, companies can allocate resources accordingly. For example, if detractors consistently highlight poor customer service experiences, the company can invest in training programs or process improvements to address those issues. This targeted approach ensures that efforts are aligned with customer expectations, leading to enhanced loyalty.

Retain customers via improved services:

The NPS survey is a standardized metric of measurement that provides an opportunity to engage with customers who may be at risk of churn. Detractors and passives present an opportunity for organizations to reach out and address their concerns proactively. By implementing effective retention strategies especially for detractors and passives, businesses can prevent customer attrition and convert potentially disloyal customers into satisfied and loyal ones. Organisations also get to offer consistent services for promoters, using the opportunities for up-selling and cross-selling.

Encouraging feedback and displaying customer-centricity:

The NPS survey is a customer centric tool across organisations. This denotes that brands take the effort to understand their customers and how their opinions can improve internal processes. By actively seeking feedback and acting upon it, companies continuously improve their products and services. This customer-centric approach fosters trust, strengthens the customer-company relationship, and encourages customer loyalty.

Best Practices for Conducting NPS Surveys

It is favourable when you follow the best practices to ensure accurate and meaningful results. Here are some pointers to note:

Be clear with your objectives:

Prior to making an actionable nps survey question,  map out what will be the end goal of the customer feedback. Understand the primary reason to deploy nps question and why, and how the results will be used to drive improvements in your business.

Simple scale is an important metric:

The NPS survey should be simple and comprehensible for your target audience. Keep it concise and easy to understand for respondents. Use simple and straightforward questions to gather feedback on overall satisfaction, likelihood to recommend, and reasons behind the rating.

Use standardized scales and templates:

The NPS scale typically ranges from 0 to 10. Classify respondents into three groups based on their scores: Promoters (9-10), Passives (7-8), and Detractors (0-6). This classification helps identify customer loyalty and provides a basis for further analysis.

Timing is crucial:

Consider sending the feedback form shortly after a customer makes a purchase, interacts with customer support, or experiences a significant milestone. This can give you more accurate and in-moment feedback at the right time. This will also determine a high response rate that can help you collect more nps data.

Personalize the feedback:

Address respondents by name whenever possible. This adds a personal touch. Tailor the survey questions based on the respondent’s relationship with your business, such as a first-time customer versus a long-term client. Personalization can also be done even with a follow-up question for a specific customer.

Opt for multiple response channels:

Giving options to deploy NPS scale on different channels can increase participation rates. Respondents could be on messenger based app, they could be using an email (write better NPS surveys and deploy nps survey template via interactive AMP emails) or browsing a website (use chatbot surveys). Being channel specific is also a part of personalization strategy.

Conduct follow-up with customers:

Closing the feedback loop  should be a primary focus on an enhanced customer experience. For respondents who provide contact information, consider reaching out to address their concerns or thank them for their positive feedback. This personalized follow-up demonstrates that you value their input and are committed to their satisfaction. For negative respondents, follow up and enquire if the resolutions meet their expectations.

Use a mix of close ended and open ended questions:

Balance closed-ended questions (e.g., scales/ rating question) with open-ended questions that encourage respondents to provide detailed feedback (example: Please tell us how we could improve this service for you). This combination allows for both qualitative feedback and quantitative data.

Analyze and act on the NPS result, real-time:

Regularly analyze the NPS results to identify trends and patterns. Pay attention to the feedback from unhappy customers, as they often offer valuable insights for improvement. Take prompt action based on the feedback received to address customer concerns, enhance customer loyalty and improve the overall NPS score.

Conclusion

In conclusion, the Net Promoter Score (NPS) scale is a highly effective and widely recognized method for measuring consumer loyalty. Its simplicity and ease of implementation make it an ideal tool for businesses seeking to assess customer satisfaction and gauge their likelihood to recommend the company or its products/services. This metric of measurement is a standardized framework that allows for easy comparison across industries and over time, enabling companies to benchmark their performance against competitors.  Moreover, the scale’s focus on the willingness to promote a brand or recommend it to others reflects the strong correlation between customer brand ambassadors and long-term business success.

By using the NPS scale, businesses can gain valuable insights into their customer base, and strategically prioritize initiatives that foster loyalty and drive growth. Overall, the NPS scale’s simplicity, universality, and emphasis on advocacy make it a valuable tool for understanding and measuring consumer loyalty.