Tips & Hints

7 reasons to measure and use your Net Promoter Score

Published on 18 January, 2021

All it takes is one simple question to get the ball rolling: How likely are you to recommend our product or service to your friends and colleagues?

The Net Promoter Score (NPS) has become so popular across industries in the world today, that customers don’t even bat an eyelid when they come across this question anymore. It’s a small task for them but can make a huge difference to your business’s marketing strategy and customer experience efforts. Let’s look at why you need to calculate your NPS and what benefits it can bring your brand when used efficiently.

What is NPS?

The Net Promoter Score gives you the percentage of customers that are likely to recommend your product or service to their network. This one question can be used to measure customer satisfaction, loyalty and brand advocacy.

How to gather and measure NPS

Start by providing your customer with a scale on which they can rate their satisfaction levels in answer to your question. Using a scale of 0-10, with 0 being ‘Least likely’ and 10 being ‘Most likely’, you can then classify your customers into these 3 categories:

  • Customers who rated 6 and below are Detractors
  • Those who gave you scores of 7-8 are Passives
  • And customers who gave you scores of 9-10 are Promoters

To calculate your NPS, subtract the percentage of Detractors from the percentage of Promoters. If 40% of your survey respondents were Promoters and 10% of them were Detractors, your Net Promoter Score is 30. Research what your industry NPS average is, so you can benchmark accordingly and start looking for ways you can improve or maintain your score.

You can also incorporate the NPS scale into customer reviews and feedback forms. Our NPS tool provides you with insights and tracking so you are always on top of your customer’s feedback. For real-time updates, you can even set up alerts based on scores received. As customers are already in the frame of mind of providing you feedback when writing a review, the NPS will blend in to your customer feedback questionnaires and surveys seamlessly

Now that you know how to measure NPS, let’s find out how it can benefit your business.

7 reasons for collecting and measuring NPS

1.    It’s very simple to use and is user-friendly

You don’t need to be a web developer or a trained statistician to effectively administer and measure an NPS survey for your business. Use a simple spreadsheet to interpret your results after you’ve collected all your data to calculate your score. If you need more clarity or further customer insights on the specifics, think of follow-up questions you can ask to determine the reasoning for their score.

The NPS question is easy to understand, making it user-friendly and convenient. Customers don’t have to dedicate too much of their time to give you an honest opinion and it is quick and cost-effective for both sides. Incorporate the NPS easily into web pages, pop-ups and emails along the customer journey.

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2.    Helps you gain customer loyalty insights

The NPS provides you with a bigger picture of customer loyalty, as each customer segmentation will tell you what percentage is likely to come back, and what percentage of customers you need to focus on to gain their trust. Your aim should be to convert Detractors to Promoters, or at least to Passives, so they’re less likely to leave negative reviews and discourage others from trying your product before it’s too late.

Personal recommendations have been a huge driving force for customer decisions this year, and the trend is only increasing. 51% of UK customers now trust recommendations from their friends and partners over brand advertising, so building loyalty into your marketing efforts is going to pay off. Loyal customers will choose you over your competitors and influence their family and friends to do the same.

3.    Learn how your company and product is perceived

Use the Net Promoter score to check if your business is on the right track and in line with your goals. Numerous studies, including one by the London School of Economics, has shown that an increase in your NPS score can be directly correlated with a company’s revenue growth. A business today is so dependent on customer loyalty and satisfaction, that happy customers are willing to pay higher prices and be strong advocates for a brand if they’re satisfied and delighted with a seamless service.

The NPS shows you exactly how many customers will actively spread a negative image of your brand (the Detractors), providing you with valuable insight on who you need to focus your energies on. Bad customer experiences will eventually cost you more than the good ones. Maintaining the right balance between retaining your Promoters and converting your Detractors is key, and it’s important not to ignore either group.

4.    Brings your employees and teams together

Incorporating NPS into your company culture in an organisation-wide ability will align all your teams from top to bottom, and horizontally too. Set clear goals for employees across every team, so all members of your organisation are aligned on a common mission and strategy that leads to your overall success. Customer-facing teams should have one focus, and that is to increase their NPS score. Other teams should set aside their own goals to meet, by tailoring NPS questions accordingly.

Finance teams can ask NPS questions during key transactions and payment gateway points, sales teams need to find out how their performance was and marketing teams can get feedback on their advertising efforts. Embracing the NPS system across your company will open the door for transparent communication, increased trust within the organisation and more willingness to work on any issues that were identified.

Many companies are also integrating similar feedback models for measuring employee satisfaction and assessment. Employees are asked if they would recommend their company to others as a place to work, and companies can use their feedback to find areas to improve on to promote a positive work culture. HR teams use NPS surveys during the exit interview process when employees who are leaving the company are more likely to provide more honest feedback.

NPS surveys for employees will give you a more holistic view of your working environment, alongside valuable customer perspectives. Both customer and employee satisfaction will determine your effectiveness and success as a brand.

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5.    Provides a quantifiable benchmark

Because the NPS is so widely used across industries at a global scale, it is a helpful way to quantify and compare your customer satisfaction level with your competitors. Most industries have a single NPS figure that is used for universal benchmarking, and this is often updated on a yearly basis.

Many companies include their NPS score alongside their ad spend, customer churn, revenue figures, expenditure, conversion rate and cost per acquisition in their weekly reports to all stakeholders, both internal and external. Monitor your NPS scores regularly to notice patterns and see how you stand amongst your competitors. Keep constant tabs on others in your industry and region so you can effectively track progress areas and those that need immediate attention.

6.    Helps identify areas of improvement

The Net Promoter Score can help businesses identify obstacles in their business model by highlighting areas that hindering progress or that are not showing any signs of improvement. Customer feedback is crucial for you to know what is working and what isn’t. Tracking your NPS will help you troubleshoot your product and services in real-time, quickly and efficiently.

Under your main NPS question, provide the customer with the opportunity to explain their score. This is especially useful if you are constantly receiving negative lower scores from Detractors. This adds value to your Detractors and gives you the chance to accept their criticism and find ways to improve their experience. Communicate with the customer empathically, listen to their grievances and offer solutions that entice them to give you another chance.

7.    Strengthens the bond with your customer

The NPS starts off with a simple question. It asks for your customer’s opinion. The customer immediately knows that you value what they think and if they will pass on the same to their family and friends. This builds your reputation as a brand that cares and values customer feedback. Customers like to feel like they are heard and will look forward to maintaining a relationship with a brand they can trust.

Start measuring your NPS today

These are just some of the reasons the NPS is so widely used by businesses across the world today. It is a trusted metric that can be tailored to your needs and those of your industry. As a company that is looking to be successful for the long-run, it is crucial that you put customer satisfaction at the forefront. The NPS provides you with actual measurements to back-up any claims and equips you with the vision you need to ramp up your marketing strategy.


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