The Best Way to Use Net Promoter Score in 2022
Net Promoter Score is one of the most popular —and most contested —metrics in customer experience. While some businesses see NPS as the touchstone of customer satisfaction, some think the metric only tells a fraction of the story. Regardless of where your business stands on Net Promoter Score, one thing is true: it’s here to stay. It’s easy for people to use and, in many cases, the pros outweigh the cons.
The key to scaling NPS is to make sure your business’s leadership understands what the metric reveals (and doesn’t reveal) about how your customers are feeling. Additionally, pairing NPS with other metrics can paint a much fuller picture of how the business is meeting the demands of the “NOW Customer,”
What to expect from this article
In this article, we’ll cover:
- Background information on Net Promoter Score
- How to calculate Net Promoter Score
- The problem with Net Promoter Score
- How to improve Net Promoter Score for 2022
We hope you’ll learn something new about NPS and how it can help improve and scale your brand’s experience!
What is Net Promoter Score?
Net Promoter Score®, or NPS®, is a metric used in customer experience programs to measure loyalty. It can also be used to track employee experience. Since its inception in 2003 by Fred Reichheld at Bain and Company, Net Promoter Score has helped millions of companies measure customer satisfaction and the potential for improvement. This is done by asking current customers how likely they are to recommend their products or services to their personal networks.
How Do You Calculate Net Promoter Score?
In order to calculate Net Promoter Score, customers are asked one simple question. That question is, “How likely are you to recommend (product/service/company) to a friend or colleague?” They are given the option of choosing a number between 1 and 10. “1” being the least likely and “10” being the most likely. In order to find a company’s Net Promoter Score or NPS you can use a simple equation: Subtract the percentage of Detractors from the percentage of Promoters.
Depending on their response, respondents are grouped into the following three categories:
- Promoters: Those who respond with a 9 or 10. These are typically your most engaged, ethusiastic, and loyal people.
- Passives: Those who respond with a 7 or 8. These people tend to be satisfied, but lack the enthusiasm to share your product or service with others.
- Detractors: People who respond with a 6 or lower. These people are unsatisfied and are likely to not buy from or use your services again. They may even be the ones who voice their opinion publicly and discourage others from buying your product or using your service.
For example, if 5 percent of your respondents are Detractors and 80 percent are Promoters your NPS would be 75.
What is considered a good NPS score?
Net Promoter Scores can range from “-100” (where everyone is a detractor) to “100” (where everyone is a Promoter). Finding a company with a perfect NPS score of 100 is just not realistic. It’s simply not possible to satisfy every single person, but looking at averages, benchmarks, and rates of growth is a healthy way of comparing your company to others in your industry.
You may be looking at this chart and thinking, “yikes, these seem low”, but there are a few factors to consider:
- In a survey done by Colloquy, 75% of the general population said they would share a negative experience with loved ones, but only 42% would recommend a product or service with which they had a positive experience.
Potentially, those who have had a less-than-stellar experience are more likely to fill out surveys like the NPS and those with a positive experience aren’t sharing their experiences. That’s definitely possible. While that seems bleak, companies that use these scores and work on their experience will certainly be the ones benefiting. We’ll talk more about neglect later.
What is the problem with Net Promoter Score?
The biggest problem with NPS is that it doesn’t tell the full story of customer experience. For every one person who contacts support or leaves an NPS rating, there are 10 others that you never hear from! That’s 10 customers or employees who had an experience with your brand, and you have no idea who they are and the reason they didn’t leave feedback. This is particularly problematic in the crowded ecommerce space, where competition is fierce and visitors can easily bounce to another website to get what they want.
Luckily, there are ways to capture those 10 “silent ones” and make sure they’re heard —whether they’re enthusiastic about your company or had a terrible experience.
How can you improve NPS for 2022?
There are five ways to use and improve Net Promoter Scores within your business:
1. Find customers who may not fill out NPS survey
2. Pair NPS with other metrics
3. Encourage customers who are loyal
4. Nurture your detractors
5. Adopt a NOW CX, revenue-generating approach to NPS
According to Gartner, 80% of future revenue comes from 20% of existing customers. So, how can companies use this knowledge and combine that with their Net Promoter Score data?
- Find customers who may not fill out an NPS survey
As mentioned before, there’s a good chunk of visitors who do not reliably fill out the NPS survey. How is your business finding them? One way is to put live chat on your website. By proactively reaching out to site visitors (the same way a salesperson would check in with a browser in a retail store), you can get a better read on how they’re feeling. Perhaps they’re frustrated in that moment and you can help. Or, perhaps they are feel neutral about your company but are dazzled by your employees. The results of this tactic will mean more people will fill out the survey and if not, your team has a better idea of how the base is feeling overall.
- Pair NPS with other metrics
CX metrics are reliable way to measure economic growth. While NPS often stands out, it can tell a much fuller story when paired with other research like customer effort score, CSAT, and rate of repurchase. The result is clearer correlation between factors that determine growth and overall sentiment.
- Encourage those who are loyal
Enthusiasm should be celebrated! Using a tool like NPS, find the customers that score your company at a 9 or 10. These are likely the people who will vouch for you, participate in case studies, and are more likely to spread the love about their experience with your product or service. Focus on these folks, keep them happy and nurture their experience. Discounts and personalized notes of gratitude go a long way.
- Nuture your detractors. Talk to them! If they are willing, see what you can do to change their experience. Maybe they need more training, more individual attention or a different product that suits their needs.
- Adopt a NOW CX, revenue-generating approach to NPS.
The data collected from the Net Promoter Score is a powerful tool for all companies. Whether you are looking to maximize your on-site experience, create raving fans, or prevent churn, analyzing feedback from your customers is always a good idea. The methodology of NPS is more engaging (and fruitful) than asking customers an open-ended question. It’s the gold standard in metrics, but there’s always room for improvement!