What is NPS? Understanding Net Promoter Score

Net Promoter Score evaluates how loyal customers are to your brand. Learn how to get your NPS score so you can make your CRM more effective.

How likely do you think it is that a customer is going to recommend your product or service to another person? That is the general net promoter score definition.

So, what exactly is a net promoter score?

NPS stands for net promoter score, and there are lots of companies that use a net promoter survey to see how well their products or services are doing as well as overall customer satisfaction.

Even though you probably collect a lot of customer feedback, you might be interested in how a specific product or service is doing with your customer base. That is one of the biggest reasons why companies use a net promoter score.

A net promoter score survey is a simple, straightforward way to figure out whether your customers are likely to recommend your product to someone else and gauge customer loyalty.

What is a good NPS score, and how can you maximize this customer research tool? There are a few important points that you should keep in mind.

What is a net promoter score?

When taking a look at a net promoter score definition, you will see that this is an index that usually ranges from -100 to +100.

The goal of the survey is to measure the likelihood of customers recommending your product or services to someone else. It also gives the company insight into how many unhappy customers there are and how to improve their experience.

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alt text: visual representation of net promoter scores

There are a lot of companies that use this score as a proxy. You might be interested in how satisfied your customers are with your products or services, and seeing how likely they are to recommend your products or services to someone else is a great way to learn more about this topic.

It is also important for gauging customer loyalty regarding your brand. If your customers are likely to recommend your products or services to someone else, they are also likely to explore other products and services you have to offer as well.

Hence why, it is important for companies to conduct a net promoter score survey from time to time.

How is the net promoter score calculated?

Calculating your net promoter score is relatively straightforward. The steps you need to follow include:

  • Pass out or send your surveys to as many people as possible and collect all the responses. Of course, they should have some experience with the product or service you are interested in.
  • Calculate the percentage of people who like your product or service, the percentage of people who do not like your product or service, and the percentage of people who did not respond.
  • Finally, take the percentage of people who did not like your product or service and subtract that percentage from the percentage of people who liked your product or service. That will give you your net promoter score and give you a better understanding of overall customer satisfaction.

As an example, if 65 percent of people indicated that they liked your product or service, 15 percent of people indicated that they did not like your product or service, and 20 percent of people did not respond, your score would be 65 - 15 = 50.

What is a good net promoter score?

So, as you take a look at customer retention strategies, you will see that collecting feedback from both happy and unhappy customers in the form of an NPS score is very important.

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alt text: Adobe confirms that customer-centric companies grew faster with revenue of 1.4 faster and also increased customer loyalty 1.6x than others.

At the same time, you might be wondering, what is a good NPS score? Technically, a score that is greater than zero is going to indicate that more people like your product than did not like it; however, do you really want to shoot for a score that is simply positive?

In general, if you have a score of 20 or higher, that is great. Then, if you have a score of 50 or above, that would be amazing. At the same time, there are a lot of factors that will determine whether you have a good score in front of you.

For example, different industries could be more likely to have higher or lower net promoter scores. The brand behind the company could also influence people to vote one way or another. That is why it is important to always place your NPS score in context. You need to use this type of feedback to build customer relationships.

Types of net promoter score surveys

As you look for ways to improve your customer care, it is important to be familiar with the types of net promoter score surveys you have available. They fall into two categories. The first is called a relational survey and the second is called a transactional survey.

Relational Net Promoter Score (rNPS)

If you are looking for a high-level overview of your customer loyalty and satisfaction rates, you might be interested in a relational net promoter score. This is a survey that is designed to provide you with information regarding the health of your brand identity as a whole.

It is also designed to help you take a closer look at the strength of your relationships with your customers. Then, you can run this survey from time to time, getting a better look at how your company is doing with its brand identity. Ideally, you would watch this score go up over time.

If you want to get the most out of the survey, you need to think carefully about how often you send this survey. For instance, you might want to send them once per quarter. Or, you might want to send them out once per year.

Either way, you need to monitor your progress with your customer base. If you send out these surveys too often, your customers could get tired of hearing from you, which could have a negative impact on your brand.

Transactional Net Promoter Score (tNPS)

The other type of net promoter score survey is called a transactional net promoter score. This is a survey that you send out to collect more information on a specific aspect of the customer's journey.

For example, you might be interested in sending this survey out after you roll out a new service. Or, if you reach a critical mass regarding the number of people who have tried a new product, you may want to send out this survey.

This could be a great way for you to learn more about the experience your customers have when they interact with your business.

Ideally, you want your customers to be satisfied and loyal, but it might be helpful to use net promoter score surveys for different products and services you have to offer. That way, you can figure out what is working well, what is not, and what you might need to change.

There are also several types of transactional surveys to keep in mind. They include:

Post-Purchase Surveys

As you are conducting user research, you might want to send out a post-purchase survey. This is a service that you will send out shortly after someone has purchased a product or service.

After they have had enough time to interact with that product or service, you might want to send out this survey to see how they feel about the product or service they have purchased.

Customer Service Call

As a part of community building, you might want to send out a net promoter score survey after someone has had a customer service call with your business. You might want to see what their experience was like interacting with your customer service department.

If you can improve your customer service department, you might have an easier time retaining your customers.

New Customer Onboarding

If your customer has to go through training to learn how to use your product or service, you might want to send out a net promoter score survey on the onboarding experience.

This will make it easier for you to figure out what aspects of your training are helpful and what aspects should be cut.

In-Store Experience

You can even send out a net promoter score survey about your in-store experience.

For example, if you realize that someone is coming to the store regularly, you might want to ask them for feedback about what they like or do not like in the store. The NPS score can go a long way toward telling you more.

How to create a net promoter score survey

Clearly, there are different ways you can use this type of survey, but you might be wondering how you can get the most out of it.

That means that you have to structure it properly. Even though you might think you can type up a question really quickly, you need to make sure that you do not lead the respondent in one direction or another. By using the right tools, you can create an unbiased survey that will give you the information you need.

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alt text: The actual value of NPS is in the follow up.

For example, you might want to take a closer look at some of the tools from companies such as Mailchimp. Advanced tools can help you expedite the survey creation process while still presenting you with information that is trustworthy.

Don't let the data you collect go to waste

You probably collect a lot of information regarding your customers and clients, and you want to do everything you can to convince them to stick around. For example, you might be looking for tools that can help you win customers without social media, or you might be looking for help with something as simple as learning how to write a welcome email.

If you want to build strong relationships with your customers and clients, you need to take advantage of the tools available from Mailchimp. There are tools that can help you save a significant amount of time and money, putting you in a position to grow your business. Take a closer look at the tools available today, and get the most out of your customer feedback.

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