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When we decide to buy a new product, for example, a washing machine, we enquire our friends and families about their experience with the brand. We base our decision on other people’s recommendations.
From an earphone to a car, for most of our purchases, we spend hours looking at reviews and talking to friends/families. As statistics show, 91% of customers regularly read online reviews, and 84% trust these reviews as personal recommendations.
This means that every good review gets you a new customer, while every bad one costs you your business. So, how can you prevent a bad experience and make your customers happy so they recommend your business?
This is where NPS, or Net Promoter Score, takes the stage.
NPS® or Net Promoter Score® is a type of customer satisfaction metric that measures consumer satisfaction and loyalty. Companies use this tool to ask their customer base how likely they are to recommend them or their products to others.
NPS® surveys usually have just one question, and it is often framed like so; “On a scale of 0 to 10, how likely are you to recommend us to family or friends?”. This question can be changed depending on how a company chooses to frame it, but it will always ask about the customers’ likeliness to recommend the company or its products.
These are a few different ways in which an NPS® question may be framed:
Following the question is a 10-point scale, 0 being least likely and 10 being most likely. Some NPS® surveys have more than one question; however, this may make the calculation of the NPS® score more difficult.
These are some common additional questions on NPS® surveys that have more than one question:
These questions are helpful in identifying where the company can improve in order to better the experience of their customers and potentially increase their NPS® score.
To learn what is NPS, it’s important to understand how to create the survey. Net Promoter Surveys are easy to create. You can leverage online survey tools and use their NPS survey template to get started.
However, here, we will show you the type of questions you should ask to utilize your NPS survey to its full potential.
It’s best to start your NPS survey with demographic questions that can help you segment respondents based on your research requirements. Demographic data can be useful when you want to see trends based on age, income, or gender.
Now, it’s time to ask the primary question. This is the core question that helps you evaluate your Net Promoter Score. Ask the ‘likelihood to recommend’ question based on the survey objective.
Take the opportunity to ask respondents their reason for giving that score. Use an open-box question and allow participants to share their unfiltered opinions. NPS follow-up question helps you look beyond the score and uncover what makes customers promoters, passives, and detractors.
You can ask an additional question urging respondents to suggest how you can improve their experience. Their responses can help you identify what they are expecting from your brand. It’s important to also ask this question along with the “reason for the score” to gather a unique perspective from the intended audience.
There are three steps in calculating your Net Promoter Score result. The first step is to survey the customer, which we have explained in detail above. So here we will look into two steps after data collection.
So, let’s explore these two steps in detail to understand how the score helps you identify where you stand and what impact you have made.
Depending on the score the respondent chooses on the survey, they will be categorized into the following groups:
Promoters are the customers who are most likely to recommend the company or its products/services to other people. These customers are very pleased with their experience with the company and want to spread a good word about it. Promoters help improve brand image and attract new customers for the company.
Passives are respondents who are rather indifferent toward the company. They aren’t likely to speak badly of the company, nor are they likely to speak well of it; corresponding to the name, these set of customers are passive in regard to spreading the word of their experience with the company. They may like the company but perhaps not enough to recommend it to others.
Detractors are the most damaging to a company’s reputation and brand image. These customers are not satisfied with the company or its products and likely have nothing positive to say about it. Detractors may also dissuade potential customers from purchasing from the company.
After all survey respondents are categorized into the three groups, the following formula is used to calculate the company’s NPS® score:
NPS® = % of promoters – % of detractors
For example, if you have 25% of Detractors, 30% of Passive and 45% of Promoters, your score is 45 – 25 = 20.
NPS® scores range between -100 and 100.
Also read: How to Calculate NPS?
There are two ways to interpret an NPS® score: the absolute method and the relative method.
In the absolute method, any positive score (scores above zero) is thought to be good as it means the company has more promoters than detractors. On the other hand, negative scores (scores below zero) are interpreted as bad results when the company has more detractors than promoters.
The relative method interprets the score relative to the industry standard/benchmarks. For example, if a tech company has an NPS® score of 45 while the industry standard is 50, then they have a bad NPS® score. However, if they have an NPS® score of 60 while the industry standard is 50, then the company has a good NPS® score.
There are two main types of NPS® surveys: Relationship surveys and transactional surveys.
On-site surveys can be put on a website’s exit page (pop up before they close the website) or on a conversion page (for example, right after a completed purchase on the website).
These are usually sent after a purchase or a key interaction with the company. Relative to on-site surveys, these surveys require more effort on the customer’s part to fill out as they will be redirected to a separate page to fill out the survey.
In-app surveys are also relatively more convenient for a customer to fill as apps tend to have a smooth user interface, and respondents can fill out the survey more effortlessly.
Different companies may choose different mediums through which they send their surveys depending on what is best suited for them. This could depend on a number of factors, such as which medium has the biggest reach or on the type of survey they are sending (NPS® relationship survey vs. NPS® transactional survey).
Segregating the customer base allows companies to identify which customer groups should be focused on to improve their experience. Detractors can be prioritized in order to make them promoters or even passives.
The cost of acquiring a new customer (CAC or customer acquisition cost) is significantly higher than the cost of maintaining an existing customer. This exaggerates the importance of keeping existing customers happy so as to not lose them to competitors.
By identifying the ways in which they can improve, companies can increase customer satisfaction and loyalty, which will positively affect their business.
how you can foster trust and nurture loyalty among target customers. Net Promoter Survey helps you flag customers’ pain points and brand advantage.
Make it a part of your CX strategy and open honest conversations with happy and dissatisfied customers to improve every aspect of the customer journey and drive success.
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