Net Promoter Score is a loyalty metric used to measure the rate at which customers would refer the companies products or services to their friends and family. In simple words, the question is, "How likely are you to recommend the brand to a friend, relative or colleague?". It is often called as ‘The Ultimate Question
’ to measure a customer’s loyalty. Net Promoter Score was created by Fred Reichheld and his team at Bain & Co. in 2003. It is now widely used by businesses and industries the world over.
Net Promoter Score is a proxy for gauging the customer’s overall satisfaction and is different from customer satisfaction. Customer satisfaction score checks how satisfied a customer is, he/ she may like your brand, but might like some other brand more and might buy from other brands when their deals are better. A Promoter on the other hand, not only sticks to your brand but advocates for it as well.
Net Promoter Score Questions
‘How likely are you to recommend this brand to family and friends or colleagues?’ is the only question asked to capture the Net Promoter Score. Its singularity makes it more precious because after knowing the answer to this question, the concerned company can run programmes specifically to improve this score.
Net Promoter Score Calculation
The respondents are asked to answer the question on an 11 point scale. On the basis of where their answers lie on this scale, the respondent customers are kept under 3 basic sub categories:
1. DETRACTORS: Scores between 0 - 6
These are the customers who are unhappy with your brand. They are also the ones who are most likely to give a negative review to your company and hurt its image.
2. PASSIVES: Scores between 7 - 8
These customers are satisfied and might even like your company, but they might like some other company better. They will easily switch to another company if they find a better deal.
3. PROMOTERS: Scores between 9 - 10
These customers love your company; they stick to your products and services and even recommend it to other people.
Net Promoter Score Formula:
After analyzing the scores of the respondents, segregate them into the 3 categories mentioned before: Detractors, Passives and Promoters. Count the total number of Promoters and the total number of Detractors. Now apply this simple arithmetic formula:
(Promoters — Detractors)/(Respondents) x 100
The Net Promoter Score is a number obtained from this formula, that will be expressed as a percentage.
Net Promoter Score Calculator
If you are having trouble calculating your Net Promoter Score, many Net Promoter Score Calculators are available online
. You can use any of them to calculate Net Promoter Score instantly.
Net Promoter Score - The Score!
There might be disparities between the Net Promoter Score and the consumer satisfaction survey owing to the nature of the questions asked. There is no reason to be disheartened if the Net Promoter Score is low because studies reveal that even the most satisfied customers may not score well in a Net Promoter Score survey. Thank free trade and competition.
Why is your Net Promoter Score important
One might wonder why a company would spend money on any survey. It is simply because Net Promoter Score is not just any survey, it tells you how likely a customer is to promote your company, stick to it even after more lucrative deals from your competitors and buy more products. Knowing who these customers are and how many of them exist makes it very important for any company.
Your Net Promoter Score lets you know how well you are doing against your competitors. It lets you compare yourself to your counterparts in different markets. Bain and Co found that there is a correlation between the Net Promoter Score and the growth of a company. On an average, the scores of a leader in an industry were twice that of his competitors.
Net Promoter Score to improve your business
After knowing about the Net Promoter Score, it is hard to not use it to improve your business. Here is how you can use it for the same purpose.
1. Act on the score obtained.
Net Promoter Score gives a result in metric form. This does not mean you have to flaunt your score if you have a high score already. No matter what the score is, act on it. Formulate strategies to maintain it if it is already high and to improve it if your customers are detractors or passives.
2. Participation of the employees
If your Net Promoter Score is a reflection of the overall performance of your company, it automatically becomes a reflection of how efficient your employees are. Employees of every department should be made a part of the Net Promoter Score survey to incentivize them to work better.
3. Accountability of the Executive
The accountability of the top notch executives is extremely important. Making them accountable for the Net Promoter Score will enhance their commitment to improving overall customer experience.
4. See the Big Picture
Do not look at you Net Promoter Score in isolation, supplement it with other scores like that of customer satisfaction survey to see the complete picture of your standing as a company. You will see how your employees act and how your customers react to it. You can also use it see where you are lagging and make strategies and key decisions to make amends to it.
5. Periodic Surveys
Periodic Net Promoter Surveys are important because the customer’s opinion towards your brand is subject to change. On top of it, new businesses keep on mushrooming every now and then. If you don’t retain your promoters, someone else will take them away. Owing to the dynamics of the market, it is important to have real time data. Conduct Net Promoter Score Surveys on a quarterly basis to keep your organization on the edge.
Posted in Analytics, Customer Feedback, Customer Satisfaction, Surveys
Tagged Net Promoter Score, net promoter score calculation, net promoter score calculator, net promoter score formula, net promoter score question