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Customer satisfaction metrics are used to quantify and measure customer satisfaction and loyalty. Net promoter score, or NPS, is a type of customer satisfaction metric that uses surveys to investigate how likely customers are to recommend a product or service to others.
Variations of the question “On a scale of 0-10, how likely are you to recommend us to your friends, family, or colleagues?”, is what is asked on an NPS survey. Most NPS surveys only have this one question, however, some companies may choose to include more.
These are the following steps an organization may take in order to conduct an NPS survey:
1.Create a survey
2. Choose a mode of survey distribution
Turn detractors to promoters. Increase Customer Loyalty. Get more customer referrals.
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The way a company chooses to send out their survey may also depend on the type of NPS survey they are sending. There are two main types of NPS surveys; transactional surveys and relationship surveys.
Relationship surveys, as the name suggests, are more focused on getting an insight into the company’s relationship with their customers and are usually used to identify a degree of customer loyalty. For this reason, NPS relationship surveys are sent on an interval basis, hence a lot of company’s choose to send this kind of survey through email.
Transactional surveys, on the other hand, are trying to understand the degree of customer satisfaction more than loyalty. These surveys are sent after a customer’s interaction with the company and are usually sent in regard to a customer’s experience with a product or service. This could be after the purchase of a product, or after a call with a customer service employee, for example. These surveys may be better suited on-site or in-app, where a customer’s interactions with the company take place.
NPS surveys can prove to be invaluable to a company for a number of reasons.
Companies benefit from having an idea of customer satisfaction and loyalty because the cost of acquiring a new customer (CAC, or customer acquisition cost) is significantly higher than the cost of retaining an existing one.
Additionally, the business environment can be highly competitive with the introduction of hundreds of start ups everyday. It is important that a business holds on to its existing customer base and doesn’t lose it to competitors. NPS surveys allow businesses to categorize their customer base into the three categories; promoters, passives, and detractors. This aids companies in diagnosing problem areas and customer expectations. This information could then allow companies to improve the experience for detractors, and turn passives into promoters.