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NPS in Marketing: What is it and Why it Matters

Discover how to measure customer satisfaction and increase loyalty; increase your Net Promoter Score (NPS) to unlock growth!
Business woman working on NPS

The Net Promoter Score, or NPS for short, is a metric system used to measure customer involvement, satisfaction, and experience. It assesses feelings to determine whether a buyer will recommend a specific brand or not. In essence, it’s our trusty mood ring for customers!

How Does NPS Work in Action?

The business encourages its customers to rate how likely they are to suggest the brand to others on a scale of 1 to 10, with 10 being “very likely” and 1 being “unlikely,” using a simple Question and Answer method.

After this process takes place, three categories are established for the customers based on the ratings. Customers who rate between:

  • 0-6 are considered Detractors
  • 7-8 are considered Passives
  • 9–10 are considered Promoters. 

According to Fred Reichheld’s research with Satmetrix at Bain & Co., the clients of each category or segment have particular characteristics. For instance, detractors are essentially disgruntled clients who are dissatisfied with your brand in general and are unlikely to use your services again.

Doing the NPS Math: From Zero to Hero

The NPS is calculated by subtracting the Detractors from the percentage of Promoters. Generally, NPS of 40 and above is considered as a benchmark for high-performing brands with strong customer loyalty.

nps score chart and nps services from growthgirls marketing agenct

Subtracting the percentage of Detractors from the percentage of Promoters yields the Net Promoter Score. It ranges from -100 in the worst-case scenario (ouch, zero love), to a +100 in the best case (ultimate adoration).

And, If you’re not a math pro, no worries—you can always use Growthgirls NPS Calculator. Just add your data and receive your results.

What is Affecting NPS?

To get a high NPS score, it’s important to strike a balance between customer satisfaction and return on happy customers (ROHC) in order. 

How can we make our customers satisfied and encourage them to return?

  1. Service Quality: A key factor in client happiness is the caliber of the goods or services you offer. Providing a consistent, effective, and high-quality service can have a favorable impact on NPS.
  1. Customer Support: Your customer support team’s efficiency and responsiveness have a big impact on NPS. Customer happiness is influenced by prompt and helpful assistance, whether provided by live agents or by automated tools like chatbots.
  1. Price and Value: NPS can be impacted by how customers feel they are getting value for their money. 
  1. Convenience and Efficiency: Customers value a company’s ability to interact with them quickly and efficiently. Process simplification, waiting time reduction, and self-service choices all improve customer satisfaction, which raises NPS.
  1. Personalization: Adapting offers and experiences to each customer’s requirements and preferences can have a beneficial effect on NPS. When businesses make an effort to comprehend and accommodate their unique requirements, customers feel appreciated.
  1. Communication and Transparency: Honest, direct, and open communication with clients fosters loyalty and has a favorable impact on NPS. Customers’ expectations can be managed, and satisfaction levels can be kept high by keeping them updated on any changes, updates, or problems.
  1. Continuous Improvement: It is essential to regularly evaluate client input and apply it to drive improvements. An organization’s dedication to customer satisfaction is shown by actively addressing customer concerns and improving the customer experience.

Finding the ideal balance between automation and human connection is crucial. Utilizing automated tools like chatbots can boost productivity, but it’s important to make sure they adequately meet consumer needs and deliver satisfying results.

How does NPS Fuel Growth?

1. It evaluates client loyalty.

Customer NPS aids businesses in assessing client loyalty and the possibility that they will refer business to a friend. It also aids in determining the possibility that customers may “churn,” discontinue their subscription or refrain from making a subsequent purchase in favor of buying goods or services from a different business.

Even if you want to draw in and convert new clients, there is a larger return on investment in keeping and empowering your current ones. It goes without saying that a crucial part of making this happen is recognizing customers who are at risk of leaving, and tracking customer NPS over time aids businesses in doing just that.

Companies can determine how probable it is that the typical customer will refer you to a friend by monitoring changes in the general NPS. Customer success teams may also tell what way the entire NPS is heading by observing changes in the ratio of promoters, passives, and detractors.

For instance, it may indicate a good trend in consumer opinion if the proportion of detractors falls and the proportion of passives rises. On the other hand, a decline in promoters and a rise in passives can point to a risk of customer turnover and unfavorable evaluations.

Changes in the customer NPS may be a helpful indicator of the current level of customer satisfaction and the likelihood of churn.

2. It points out areas for improvement.

Customers may provide a low score, or even a 0, in response to the NPS question. When that occurs, especially when it does it repeatedly, it can be difficult, but it also offers a chance to focus on consumer input and make product or service improvements as a result.

We advise an NPS survey that includes additional opportunity for customers to provide detailed feedback on why they gave the score they did. By doing so, you may assess the quality of consumer feedback from people, who might be able to point out particular modifications you could make to enhance their experience with your good or service.

Sure, not all comments will be beneficial — there will always be trolls on the internet. But, specific notes about bugs, poor user experience (UX), or a bad contact with a customer success manager may be promptly forwarded to the right team to address.

3. It strengthens affiliate marketing.

Customer NPS helps businesses determine how probable it is that they will receive positive customer recommendations, which are known to be quite influential. Asking for client case studies, testimonials, and online reviews can help businesses leverage the power of referral marketing to attract new consumers. Additionally, brand ambassador and incentive programs may offer gift cards, gear, or special deals as a way to acknowledge and appreciate a customer’s devotion.

NPS data can help you find those satisfied customers. Referral marketing can be a mutually beneficial relationship between brands and their customers, but you need to make sure your current customers are happy first.

4. It helps you prioritize reaching out to detractors.

Detractors are those NPS survey participants who gave your product or service a score between 0 and 6, which suggests that they are unlikely to promote it to others. And just as putting money into your supporters can pay off for the expansion of your business, so too is concentrating on your detractors crucial.

When you obtain the NPS findings, categorize the replies into three groups and examine the rationale behind the respondents’ choices. It’s crucial to stay in touch with your esteemed clients, but it’s especially crucial if they mention a problem or issue they’re having with your goods or services.

If you follow up with critics, you can help them feel heard and valued and may even reduce their likelihood of leaving you or, worse yet, recommend that others not buy from you. It might be a case of misunderstanding or user error, or it might be a larger-scale complaint that you alone can’t resolve.

Decoding NPS: What’s Your Score for Success?

Depending on the sector and environment, a positive Net Promoter Score (NPS) can vary. However, any positive NPS score can be regarded as favorable as a general rule of thumb. Scores above 0 show that there are more supporters (customers who are eager to suggest) than opponents (dissatisfied consumers).

Here are some NPS score standards for various industries:

Here are some NPS score standards for various industries:

Authentic Retail Locations: NPS scores for businesses similar to Nordstrom are frequently very high, with an average of about 75. This suggests a substantial consumer base with a high propensity to recommend the brand.

E-commerce Giants: Companies with NPS scores of approximately 70 typically include Apple and Amazon. Their outstanding ratings are a result of their emphasis on providing exceptional customer service.

A respectable NPS score in these sectors, such as mobile operators or cable television, is normally around 0. This indicates that there is potential for improvement in customer satisfaction because the proportion of supporters and detractors is fairly balanced.

Political Context: NPS ratings in the political sphere are frequently low. A “good” NPS score in this situation would still be a negative score, but ideally as high as feasible within the negative range, even though it might not reflect favorably.

How Varied NPS Scores Drive Customer Loyalty

It is accurate to say that varying customer touchpoints or customer segments can provide varying NPS scores. To acquire a thorough insight of customer satisfaction and loyalty, it is advantageous to measure NPS at many points throughout the customer experience.

You can determine areas of strength and areas that require work by gathering NPS scores based on specific experiences like speaking to an agent, utilizing a chatbot, or upgrading a service. This makes it possible for you to take precise actions to improve customer satisfaction and raise total NPS.

There are in reality many additional metrics and feedback channels in addition to NPS that can offer insightful data on consumer satisfaction and engagement.A more sophisticated understanding of consumer emotion and loyalty may be provided by metrics like star ratings, thumbs-ups, claps, upvotes, and customer retention rates.

Finding patterns, trends, and correlations between various touchpoints and customer satisfaction scores can be accomplished by analyzing customer input and using statistical algorithms. When carried out by qualified consultants or specialists, this study can offer deeper insights into the variables affecting NPS scores and aid in forecasting the anticipated NPS for upcoming surveys.

Companies can proactively handle customer complaints, raise customer satisfaction levels, and make sure that the NPS ratings meet their objectives by comprehending the paths that lead to consumer input and anticipating NPS results.

What does an NPS Project Include?

Typically, an NPS project covers the following crucial phases:

Auditing the Present Situation: During this phase, the NPS score’s state is evaluated, and its historical trends are recognized. Consultants collaborate closely with stakeholders to collect pertinent data, including the current NPS score, changes in the score over time, participation rates, and the existence of distinct NPS ratings for various channels or touchpoints. It’s crucial to comprehend the “happy path” of the consumer journey as well as how critics and supporters are handled.

Measurement and Statistics: This phase focuses on measuring and examining the gathered individual metrics. Prior to collecting input from a larger audience, specialized consultants employ statistical analysis to forecast the NPS score. They can find trends, correlations, and insights that affect the total NPS score by examining the data that has been gathered.

Improvement Suggestions: Based on the results of the investigation, advisors offer suggestions for raising the NPS score. All avenues and points of contact that affect client loyalty and satisfaction must be addressed in this. To better serve customers’ requirements and raise the total NPS score, consultants may suggest adding extra metrics-related touchpoints, altering follow-up procedures, modifying the voice used when speaking with them, or even coming up with ground-breaking new ideas.

Implementation and Monitoring: The business can put the suggested changes into effect after receiving the improvement ideas. It’s critical to keep an eye on how these adjustments affect the NPS score and observe the development over time. Iterative modifications and enhancements are possible thanks to continuous monitoring and evaluation and consumer input.

Collaboration between the organization and specialist consultants is essential during the entire NPS process. They can contribute to significant improvements in customer happiness, loyalty, and ultimately the NPS score thanks to their skill in evaluating and interpreting NPS data as well as their knowledge of consumer behavior and industry best practices.

NPS for Satisfied Customers: Your Gateway to Growth

If you want to grow and keep your customers satisfied, you need to understand and use Net Promoter Score (NPS). You can find valuable insights into customer satisfaction and loyalty by measuring NPS at various touchpoints and analyzing customer feedback. Keep in mind that NPS is a continuous process that calls for continuing evaluation, improvement, and a dedication to providing excellent customer experiences.

Explore GrowthGirls’ NPS Services and learn how to offer an excellent customer experience!

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