What is NPS?
NPS stands for Net Promoter Score. It is a measure of customer satisfaction and loyalty.
The score is calculated by asking customers to rate how likely they are to recommend a product or service to others on a scale of 0-10, with 10 being most likely.
Customers who respond with a score of 9 or 10 are considered “promoters”, those who respond with a score of 7 or 8 are considered “passives“, and those who respond with a score of 0-6 are considered “detractors”.
The NPS is calculated by subtracting the percentage of detractors from the percentage of promoters.
What is a good NPS score?
A good NPS score can vary depending on the industry and the company, but in general, a score above 50 is considered excellent, a score between 50 and 0 is considered average, and a score below 0 is considered poor.
However, it’s also important to note that NPS is a relative measure and it’s best to compare the score against your own previous scores and industry averages.
Additionally, NPS alone does not provide a complete picture of customer satisfaction, it’s important to consider other metrics as well.
How can I increase my NPS score?
Improve the customer experience. Make sure that your products or services meet or exceed customer expectations
Act on customer complaints and suggestions. Address any issues or concerns raised by customers and implement changes based on their feedback. This will show customers that you value their opinions and are dedicated to improving their experience.
Use feedback to identify areas for improvement. Look for patterns in customer feedback to identify areas where your business can improve. This could include product or service deficiencies, issues with customer service, or areas where your competitors are outperforming you.
Use feedback to create a culture of improvement. Share customer feedback with employees and use it as a tool to create a culture of continuous improvement within your business. This can help motivate employees and foster a sense of ownership and accountability.
It’s important to note that increasing NPS score is not a one-time task, it requires continuous effort and consistent improvements.
Why should I monitor NPS?
One of the key benefits of using NPS is that it is a simple and easy-to-understand metric that can be used to track customer loyalty over time. It also provides a way to compare the performance of different products or services, as well as different locations within a company. Additionally, NPS can be used to identify areas where improvements are needed, such as in customer service or product development.
However, it is important to note that NPS should not be used as the sole indicator of a company’s success. It should be used in conjunction with other metrics, such as customer satisfaction, retention, and revenue growth. Additionally, NPS scores can vary depending on the industry and the type of product or service being offered. For example, a company that sells luxury goods may have a lower NPS than a company that sells everyday items, even though the luxury goods company may be more successful overall.
To get the most value out of NPS, companies should use it in combination with other metrics and take the time to understand the specific factors that are driving their scores. They should also use the feedback provided by customers to identify areas for improvement and make changes accordingly. By doing so, companies can not only improve their NPS scores, but also increase customer loyalty and ultimately drive business growth.
NPS is a powerful tool for measuring customer loyalty and identifying areas for improvement. Whilst it should not be used as the sole indicator of a company’s success, it can provide valuable insights when used in conjunction with other metrics. By taking the time to understand and act on the feedback provided by customers, companies can improve their NPS scores and drive business growth.
Contact us to see how we can help you launch NPS tracking in your business today.