Net Promoter Score (NPS) measures customer loyalty and satisfaction of how customers would recommend a company’s products or services to others. It is a valuable indicator of overall customer experience and potential business growth. It also indicates the room for improvement.
Ask only one question to the customer - On a point of 0 to 10, how likely are you to recommend our product/service/brand to a friend or colleague?
Categorizing the respondents : Categorize the people who responded to the above question in three groups:
Promoters (With points 9-10): Loyal customers who will continue buying from your brand while referring others.
Passives (Within 7-8 points): Satisfied customers but are also really interested in what your competitors have to offer.
Detractors (0-6): Unsatisfied customers who can damage your brand through negative word of mouth marketing.
Remove the percentage of detractors from the percentage of promoters.
NPS = % of promoters - % of detractors
The score will range within the window of -100 to +100
Demonstrates that there are more promoters than detractors which is a great sign of customer loyalty.
Involves securing external financial assistance, such as loans or investments, to fuel business growth and expansion.
Signifies sufficient dissatisfaction amongst your customers regarding your brand.
Offers a straightforward insight that can be communicated within the organization.
Provides you an understanding of customer’s perception of your brand and the areas for improvement.
You can compare your brand and growth with the existing industry standards and customer retention that serves as a benchmark for your future business performance.
NPS helps you analyze the feedback to understand the reason behind the dissatisfaction behind and address the areas of improvement.
The NPS score lets you measure and monitor changes over the time period and impact of any changes.
Sharing NPS score with the employees can help build customer-centric culture to motivate the employees to improve and enhance the customer service.