Fred Reichheld from Bain & Company designed a universal way to measure customer loyalty. He developed the Net Promoter System that underwent multiple development. It soon became a standardized method of tracking promoters and detractors to build a customer-centric relationship. Soon NPS scores defined the business growth and customer loyalty.

Net Promoter Score is a widely used and often touted as the gold standard metric for customer experience. NPS scores are measured with a single and a simple question:

“On a scale of 0-10, how willing are you to recommend <BRAND NAME> to your friends/ colleagues?”

The Net Promoter score is a difference between percent of promoters (those scoring 9 or 10) and detractors (those scoring 6 or lower) from overall responses. The score can range from -100 to +100. A good Net Promoter score is the one with higher numbers.

You can calculate your score with our NPS calculator here

What is the Net Promoter Score?

The Net Promoter Score (NPS) is a metric to measure brand advocacy of customers. The NPS scale is the world’s leading metric that is commonly used to measure customer loyalty and satisfaction. The score is measured over a 0-10 scale.
It is calculated by subtracting the percentage of detractors from the percentage of promoters. The resulting score ranges from -100 to +100.

A good NPS score indicates that more customers are promoters than detractors, while a negative score indicates that people might leave with a negative word of mouth. When the score is either 7 or 8, that could denote passives or people who are indifferent to your brand. The NPS scale is a valuable tool for businesses to measure customer satisfaction and identify areas where they can improve their products or services. Industries can understand their competitive stance as they compare their scores with the average scores within their industry. 

Unfortunately, as the adoption of Net Promoter Score has increased, so has its misuse. In this blog , we will explore the 5 reasons why companies can get their Net Promoter Score wrong:

1. Net Promoter Score does not measure absolute customer loyalty

The NPS surveys is a measure of how the buyer is readily willing to recommend the brand. That is not the same as loyalty. You can get loyal customers for your product, but they are not willing to recommend publicly for several reasons.
For example, they might think that while the product is great for them, it would not have similar value for their friends, family, or colleagues. Does that make them a disloyal consumer? This is especially important when products on intimate wellness or medical products are involved.

2. NPS does not determine customer retention

Lindy Law suggests that the longer a person has been with a company, they are expected to have an even longer customer journey with the brand. If NPS was indeed a measure of customer retention, then for such a consumer the NPS would remain the same or increase over time. However, for stable products, NPS is naturally downward trending. What was a delight in the beginning, would become a consistent expectation for customer service over time.

3. NPS is not a competitive benchmarking tool

Unless you benchmark with extreme precision. Companies often benchmark this metric against their category competitors to evaluate the performance of their customer facing teams. However, the NPS gets impacted by several variables other than the category. It can be noted that the time spent with a company would impact the score. Hence, an older company with a larger mix of older brand advocates would have lower NPS than a young startup with a brand new customer base.

4. NPS gets colored by marketing buzz

Companies often see an uptick in the NPS results coinciding with their successful marketing campaigns. This can occur even though nothing inherent has changed with the product or with the customer satisfaction segment. Good marketing campaigns make a brand look like a winner and people want to pick a winning side. However, attributing the spurt in NPS scale due to the success of marketing to improved customer success can be misleading.

5. Responses on sensitive categories will not give accurate data

Some categories are not “recommendation” friendly in the NPS survey. So the customer feedback on these items will not give accurate data. Especially, in sensitive categories like sexual wellness or contraceptives, pharmaceutical products, intimate wellness . The idea of recommendation in these categories might be a barrier irrespective of a good customer experience.

What industries that benefit most from NPS?

Industries that benefit most from NPS include hospitality, e-commerce, telecommunications, financial services, and healthcare. These industries heavily rely on customer satisfaction and loyalty, making the Net Promoter Score an effective tool to improve customer experience.

Professionals across industries can use Merren’s AI-driven tools to measure customer experiences at touchpoints. Use Merren’s interactive survey channels of WhatsApp, Facebook messenger and AI-driven chatbot.

The Best Practices of Customer Feedback Using NPS System

The main purpose of the NPS survey is to measures customer experience and predict business growth. The average NPS score denotes how likely your customers are to recommend your business. Here are some best practices to follow: 

Detect detractors with real-time feedback

Post-purchase transactions offer authentic responses from people. This method can yield a high response rate on your NPS survey in real-time. Every feedback gets collected over the Merren’s dashboard. The NPS data can be segregated into the number of promoters and overall NPS results. This way, marketers can develop strategies that can boost business, have fewer detractors in their ecosystem and increase word-of-mouth referrals.

Use interactive survey distribution channels

Launch survey via different platforms of interactive email surveys, WhatsApp business surveys, AI-driven chatbots where users can answer surveys without going into an external browser.  This can immediately help identify passive customers which is an opportunity for businesses to convert them to promoters.

Focus on simple rating scales 

Keep the survey questions very simple and easy for respondents. You can also use the 3-point scale and 5-point scale in the surveys. It is simple and easy for everyone due to familiarity. However, just deploying surveys is never enough. The customer support can focus on a follow-up question after resolving issues and conflicts. This way, they can ensure a better CX. 

Conclusion

Using Merren, you can effectively manage customer feedback with our robust tools. Sign up for a 14 day free trial and supercharge the way you collect feedback. Build single survey questions with our conversational format of questionnaires. Create a customer journey mapping tool and change the way you collect real time feedback.