How to supercharge customer relationships with net promoter score

Discover the impact of knowing your Net Promoter Score (NPS) – the metric used to measure customer loyalty and satisfaction.

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Understanding and harnessing customer loyalty is paramount to the success of your small business – and knowing your Net Promoter Score is the perfect way to do this.

Loyal customers contribute significantly to your revenue, of course. But, they can also serve as enthusiastic advocates for your brand, attracting new business through positive word-of-mouth. 

This article explains the significance of NPS, shedding light on its relevance, and how it can propel the growth of your business and help you build customer relationships for the long run, boosting your customer lifetime value.

Net Promoter Score (NPS) is a metric used to measure the satisfaction level of your customers. The metric revolves around a single question: 

On a scale of 0 to 10, how likely are you to recommend our product or service to a friend or colleague?” 

The score categorises customers into promoters, passives, and detractors, providing insights into how likely they are to become vocal advocates. 

  • 🌟 Promoters (Score 9-10): loyal enthusiasts who are likely to recommend
  • 😐 Passives (Score 7-8): satisfied but not actively promoting
  • 👎 Detractors (Score 0-6): less satisfied customers who may not recommend

The power of NPS

Amazon strategically leverages its impressive Net Promoter Score (NPS), which is consistently above 70%, to forecast future interactions and customer behaviour on its platform. 

Using the NPS data of millions of users, Amazon identifies that those falling into the category of enthusiastic promoters (with a score of 9-10) exhibit a remarkable 15% higher likelihood of repeat business. This is a notable 5% increase in the probability of referring the platform to friends, as compared to detractors.

Why is NPS important for businesses?

NPS benefits businesses that crave simplicity when it comes to knowing their customers. That’s because just one direct question opens the door to a host of customer insights for even small businesses. 

Forget about getting overwhelmed with data or needing to hire a specialist to help you with the details – it’s a straightforward tool that almost anyone can calculate without much hassle.

What starts as a single positive interaction between your company and your audience can lead to a network of loyal customers actively promoting your business. 

Crafting an effective NPS survey

Although the traditional way to conduct an NPS survey simply consists of one question, additional customer feedback can unlock further invaluable insights into customer satisfaction. The key is to gather scores and unearth the reasons behind them to make targeted improvements.

Here are some tips to ensure your survey captures meaningful feedback:

Personalisation

Tailor your survey to reflect your brand's personality. When survey questions are framed in a way that resonates with the audience, respondents are more likely to understand and answer them accurately. This, in turn, can lead to higher response rates and more reliable data because participants feel more comfortable and connected to the survey content.

Open-ended questions

While NPS is numeric, supplement it with open-ended questions to capture qualitative insights. Ask customers to provide specific reasons for their score, offering you a deeper understanding of their choice.

Follow-up questions

Follow up with additional questions to highlight strengths or areas needing improvement.

For example:

  • “What is the primary reason for your score?”
  • “Is there anything we could do differently to enhance your experience?”
  • “How likely are you to recommend our [product/service] to a friend or colleague?”
  • “What features do you find most valuable in our [product/service]?”
  • “How would you rate the overall quality of our customer service?”
  • “Is there anything specific that impressed you about your recent interaction with us?”
  • “On a scale of 1 to 10, how satisfied are you with the [delivery speed] [quality] of our product(s)?”

When is the best time to calculate your NPS?

Choosing the right time frame to seek feedback is essential. Catch your customer at the right moment, and you’ll significantly improve the relevance of the insights. 

The best timing method is to align the assessment period with the customer journey milestones and touchpoints. To capture immediate feedback, consider conducting NPS surveys shortly after key interactions, such as product purchases or customer support interactions. 

Alternatively, opting for a regular cadence (quarterly or annually) can provide a broader perspective and keep your data up to date.

How to calculate NPS

Once you’ve collected your responses and categorised them, you’ll need to find the percentage of respondents in each category.

  • Promoter percentage (%)
  • Passive percentage (%)
  • Detractor percentage (%)

From there, it is possible to use the NPS formula:

📉 NPS = Promoter Percentage – Detractor Percentage

Interpreting NPS scores – a quick guide

With a total potential score of 100, your NPS can range from -100 to +100. A positive score indicates a healthy level of customer advocacy, while a negative score suggests the need for improvement.

▶️ Positive NPS (Above 50):

What it means: indicates a healthy customer base of loyal advocates

How to improve: focus on sustaining and enhancing the positive customer experience

▶️ Moderate NPS (0 to 50):

What it means: reflects satisfaction but there is room for improvement

How to improve: identify areas for enhancement, addressing feedback from passives and detractors.

▶️ Negative NPS (Below 0):

What it means: signals potential challenges in customer satisfaction

How to improve: urgently address concerns raised by detractors, turning them into satisfied customers

The benefits of NPS

 From cultivating customer loyalty to predicting growth trajectories, NPS emerges as a dynamic tool with multifaceted advantages.

An indicator for growth

Your NPS provides a glimpse into your business's trajectory and future. Happy customers are likely to return, of course. But, they’re also likely to encourage new business through positive recommendations, creating a self-propelling cycle of success.

Boosts customer loyalty and retention

Beyond measuring satisfaction, NPS also touches on customer loyalty. Satisfied customers aren't just one-time buyers; they become brand advocates, fostering loyalty that translates into long-term relationships. This loyalty, in turn, reduces customer churn and boosts retention rates.

Improves employee engagement and performance

The impact of NPS also has a profound effect on your team. Engaged employees contribute to positive customer experiences, creating a symbiotic relationship. 

By measuring NPS internally, you can gain insights into employee satisfaction. This helps you identify areas for improvement, fostering a workplace culture that mirrors your commitment to customer excellence.

Keeps issues from getting out of control

NPS lets you hear from the detractors, giving you insights into what may have been substandard experiences. Understanding their concerns and criticisms can provide you and your team with a roadmap for enhancement, uncovering specific areas where products or services may fall short of expectations. 

By harnessing the power of NPS to actively listen to and address detractor feedback, detractors may hold the key to elevating your offerings to new heights.

Efficiency and improvement

NPS is a dynamic metric that drives continuous improvement. Regular assessments highlight areas of strength and weakness, guiding strategic decisions. By identifying pain points and addressing them promptly, businesses can enhance operational efficiency, delivering an experience that resonates positively with customers.

Conclusion

Businesses can use NPS to cultivate satisfied customers and brand advocates. These people can quickly become your most valuable asset, contributing to the growth of your small business via positive recommendations on social media and through word-of-mouth. 

In turn, this can lay the foundation for enduring customer relationships and a successful brand reputation.

Frequently Asked Questions
  • Is a high NPS the only indicator of business success?
    While a high NPS is a positive sign, it's not the sole indicator of business success. NPS should be considered alongside other key performance indicators (KPIs) and metrics relevant to your business goals.
  • What actions should a business take based on its NPS results?
    Detractors require immediate attention: you’ll need to address their concerns and turn their experience into a positive one. For promoters, consider leveraging their advocacy in marketing efforts. For passives, seek ways to enhance their satisfaction and move them towards becoming promoters.
  • How do I interpret a negative Net Promoter Score?
    A negative NPS indicates a higher percentage of detractors than promoters, suggesting areas for improvement in customer satisfaction. Instead of viewing it solely as a setback, see it as an opportunity for positive change. A strategic approach to improvements can lead to an uplift in NPS over time.
  • How can businesses turn Detractors into Promoters based on NPS feedback?
    Turning detractors into promoters involves a proactive approach. First, reach out to detractors to understand their concerns. Address their issues promptly, demonstrating a commitment to customer satisfaction, then follow up with personalised solutions and consider implementing feedback to enhance the overall customer experience. Engaging with detractors can help resolve issues and has the potential to transform them into loyal advocates of your business.
Written by:
Stephanie Lennox is the resident funding & finance expert at Startups: A successful startup founder in her own right, 2x bestselling author and business strategist, she covers everything from business grants and loans to venture capital and angel investing. With over 14 years of hands-on experience in the startup industry, Stephanie is passionate about how business owners can not only survive but thrive in the face of turbulent financial times and economic crises. With a background in media, publishing, finance and sales psychology, and an education at Oxford University, Stephanie has been featured on all things 'entrepreneur' in such prominent media outlets as The Bookseller, The Guardian, TimeOut, The Southbank Centre and ITV News, as well as several other national publications.

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